Deemed assessment fiction under section 24B: amounts realized after the previous year are not taxable as the deceased's income.

Whether sums received by heirs or legal representatives in years after the deceased's previous year are assessable as the deceased's income under section 24B was resolved by reading section 24B as a limited statutory fiction confined to the previous year. The court applied statutory construction to hold that subsections confine the deeming to income of the previous year or assessments relating to that year, and that the fiction does not extend the deceased's legal personality into subsequent years. Outcome: amounts realized after the previous year are not taxable as the deceased's income in the hands of representatives.

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Issues: Whether sums received by the heirs and legal representatives of a deceased person in years subsequent to the previous year in which he died are assessable to income-tax in the hands of the deceased (as deemed assessee) under section 24B of the Income-tax Act.

Analysis: Section 24B must be read as a whole; its subsections create a limited fiction making the legal representatives the assessee only for income of the deceased received in the previous year (the account year) or for income received by representatives in that same previous year where assessment had not been completed. Sub-sections (2) and (3) confine the section to cases where assessment proceedings relate to the previous year of the deceased or to income earned or receivable in that previous year. The fiction does not extend the deceased person's legal personality beyond the previous year to cover sums realised in subsequent years. Authorities cited in the judgment establish that, absent express statutory provision, income-tax relates to the previous year and a dead person cannot be assessed beyond the previous year in which he died. The Court held that amounts realized after the previous year cannot be deemed income of the deceased under section 24B and thus are not taxable as his income in the hands of his legal representatives.

Conclusion: The sums received by the heirs and legal representatives in years subsequent to the previous year of the deceased are not assessable under section 24B as income of the deceased; the High Court's negative answer to the reference is upheld and the appeals by the revenue are dismissed.

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