Penalty cannot be imposed on legal representatives for a deceased assessee's default where liability is only estate-linked.

Penalty for a default committed by a deceased assessee cannot be fastened on legal representatives where their liability is only representative and limited to assessment and payment of tax out of the estate under the Karnataka Agricultural Income-tax Act, 1957. In the absence of any provision treating legal representatives as assessees for penalty purposes, section 18(2A)(b) could not be invoked against them for the deceased's default. Penalty proceedings were therefore without jurisdiction and the penalty orders could not be sustained.

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Issues: Whether penalty proceedings under section 18(2A)(b) of the Karnataka Agricultural Income-tax Act, 1957 could validly be initiated and sustained against the legal representatives of a deceased assessee for a default attributable to the deceased.

Analysis: The liability of a legal representative under section 24(2) of the Karnataka Agricultural Income-tax Act, 1957 is limited to assessment and payment of agricultural income-tax out of the estate of the deceased to the extent of the estate available. Section 18(2A)(b) is modelled on the corresponding provision in the Wealth-tax Act, and the absence of a provision akin to section 159(3) of the Income-tax Act, 1961, which expressly treats legal representatives as assessees for such purposes, is material. The reasoning accepted from the comparative case law is that a penalty for a default committed by the deceased assessee cannot be fastened on the legal representatives, because they are not the defaulters and their liability is only representative and estate-linked.

Conclusion: Penalty proceedings against the legal representatives were without jurisdiction and the penalty orders could not be sustained.

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