Annuity refund under section 280D remains taxable income when received by an executor or other representative.

Refund of annuity under the annuity deposit scheme governed by Chapter XXII-A and section 280D of the Income-tax Act, 1961 was held taxable as income in the hands of the recipient, including where received by an executor, nominee, legal representative, or other representative. The High Court followed its earlier binding authority that section 280D payments retain their character as income regardless of the recipient's representative capacity, and answered the referred question in favour of the Revenue.

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Issues: Whether the refund of annuity received by the executor of the estate of a deceased depositor under the annuity deposit scheme was taxable as income in the hands of the recipient.

Analysis: The refund arose under the annuity deposit scheme governed by Chapter XXII-A and section 280D of the Income-tax Act, 1961. The Court noted that the same issue had already been decided by this Court in earlier binding authority holding that payments under section 280D, whether made to the depositor, nominee, legal representative, or other representative, were taxable as income. It declined to depart from that view and followed its prior decision as binding.

Conclusion: The refund of annuity was income and was assessable in the hands of the executor of the estate. The answer to the referred question was in the affirmative and in favour of the Revenue.

Ratio Decidendi: A refund received under section 280D of the Income-tax Act, 1961 is taxable as income not only when received by the depositor but also when received by the depositor's nominee, legal representative, or other representative in whom the payment is received in that capacity.

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