Legal representative liability under income tax law does not extend to penalty where the fiction is limited to assessment.

Section 24B(2) of the Income-tax Act, 1922 creates a limited legal fiction only to permit assessment of a deceased person's income through the legal representative. That fiction does not extend to collection proceedings or to the imposition of penalty. Although section 29 treats the legal representative as a person liable to pay the tax, that status does not make the representative an assessee in default under sections 45 and 46(1). Penalty under section 46(1) can be imposed only on an assessee in default, so a legal representative cannot be penalised merely because the assessed tax was not paid within time.

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Issues: Whether a legal representative assessed under section 24B(2) of the Income-tax Act, 1922 on the income of a deceased person can be treated as an assessee in default under sections 45 and 46(1) and consequently penalised for non-payment of the assessed tax.

Analysis: Section 24B(2) creates a legal fiction only to enable assessment of the deceased's income after death. The fiction does not, by express words or necessary intendment, extend to collection proceedings or to the imposition of penalty. For collection, section 29 distinguishes between an assessee and any other person liable to pay tax. The legal representative, therefore, is a person liable to pay the tax, but not an assessee in default within section 45. Since section 46(1) authorises penalty only against an assessee in default, the legal representative cannot be penalised under that provision merely because the tax was not paid within time.

Conclusion: The legal representative assessed under section 24B(2) is not an assessee in default under sections 45 and 46(1); the penalties were without jurisdiction and were liable to be cancelled.

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