Estate income under representative assessment until partition, with undivided heirs not separately taxed on definite shares.

Income of a deceased person's estate is assessable under section 168 in the hands of the person administering the estate until the estate is fully distributed or partitioned. Where more than one heir succeeds to undivided property, their definite shares in title do not justify separate assessments so long as they retain unity of possession. The scheme of the Act, including section 171, supports assessment of the estate as a whole in representative capacity rather than splitting it into individual assessments merely because succession is intestate or the heirs are tenants-in-common.

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Issues: Whether, on the death of the owner, the income of the estate is chargeable under section 168 of the Income-tax Act, 1961 in the hands of the person administering the estate, and whether the heirs can be assessed separately on definite shares by invoking section 26 of the Act.

Analysis: Section 168 is a special charging provision for the income of the estate of a deceased person and the Explanation gives the term "executor" an extended meaning so as to include an administrator or any other person administering the estate. The provision contemplates assessment of the estate income in the hands of a representative person until complete distribution. Where more than one heir succeeds to the estate and the property remains undivided, the heirs may have definite shares in title, but they continue to have unity of possession until partition or distribution. In such a situation, the estate is not to be broken up into separate assessments merely because the heirs are tenants-in-common or because succession is intestate. Section 171 and the scheme of the Act support assessment of the estate as a whole until disruption by partition or complete distribution.

Conclusion: Section 168 applied and the estate income was assessable in the hands of the person administering the estate; separate assessment of the heirs on 1/6th shares was not warranted. The answer to the referred questions was in favour of the assessee.

Final Conclusion: The Tribunal's view was upheld and the Revenue's challenge failed, as the undistributed estate income remained assessable only in representative capacity until partition or complete distribution.

Ratio Decidendi: Where the estate of a deceased person remains undivided and is being administered by a person in possession of it, the income is assessable under section 168 in representative capacity, and heirs with undivided interests cannot be separately assessed on the basis of their definite shares until partition or complete distribution.

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