Probate ends executorship and shifts assessment to trusteeship for estate income under the Income-tax Act.

Probate ended the official trustee's role as executor and marked the commencement of trusteeship where a will appointed the same person as sole executor and sole trustee. For income-tax purposes, estate income for the relevant years had therefore to be assessed in the character of trustee under section 161(1), not as executor under section 168. The court rejected the view that trustee capacity existed from the outset, but held that once probate was obtained, executorial capacity ceased and assessment as executor was not warranted.

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Issues: Whether the official trustee, appointed under the will as sole executor and sole trustee, was liable to be assessed as an executor under section 168 of the Income-tax Act, 1961, or as a trustee under section 161(1) of the Income-tax Act, 1961, during the relevant assessment years.

Analysis: Under sections 7(6) and 9 of the Official Trustees Act, 1913, the official trustee could act as executor only until probate was obtained and, on obtaining probate, the trust came into existence and the properties vested in him as trustee. The obtaining of probate was treated as an act of acceptance of the trusteeship, and the executorial capacity came to an end from that point. The Court declined to accept the Tribunal's view that vesting as trustee occurred from the very inception, but held that assessment as executor was nevertheless not warranted for the years in question because probate had already been obtained. The income had therefore to be dealt with in the character of trustee and not executor.

Conclusion: The assessee was rightly assessable only as a trustee and not under section 168 as an executor, and the reference was answered in favour of the revenue on the questions as framed but in substance in favour of the assessee on the assessment issue.

Final Conclusion: Probate marked the transition from executorship to trusteeship, and the estate income for the relevant years was not taxable in the hands of the assessee as executor.

Ratio Decidendi: Where a will appoints the official trustee as sole executor and sole trustee, executorship ends on grant of probate and the trustee thereafter holds the estate in the capacity of trustee for assessment purposes.

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