Representative assessee status cannot be extended retrospectively to a later-appointed receiver for earlier assessment years.
A later-appointed receiver cannot be treated as a representative assessee for income that accrued to an earlier receiver in prior assessment years, because representative liability under section 160 applies only to income received or receivable in that capacity at the relevant time. The text also states that a receiver is merely an officer of the court and no estate devolves on a successor by death, so liability as a legal representative under section 159 does not arise. On that basis, the notices under section 148 were said to be without jurisdiction and the consequential proceedings were quashed.
Issues: (i) Whether receivers appointed after the death of the previous receiver could be treated as representative assessees for income relating to assessment years preceding their appointment. (ii) Whether the petitioners could be regarded as legal representatives of the deceased receiver so as to be liable under the Act for those years.
Issue (i): Whether receivers appointed after the death of the previous receiver could be treated as representative assessees for income relating to assessment years preceding their appointment.
Analysis: The definition of representative assessee in section 160(1)(iii) applies to income which the receiver receives or is entitled to receive in that capacity. Income-tax liability attaches to the year in which the income accrues or is received, and income can accrue or be received only once. A later receiver cannot be assessed in respect of income that had already accrued to an earlier receiver before the later appointment, because representative liability exists only for income taxable in the hands of the person occupying that status at the relevant time.
Conclusion: The petitioners were not representative assessees for the assessment years prior to their appointment.
Issue (ii): Whether the petitioners could be regarded as legal representatives of the deceased receiver so as to be liable under the Act for those years.
Analysis: Section 159 fastens liability on the legal representative of a deceased person, and the expression derives its meaning from section 2(11) of the Code of Civil Procedure, 1908. A receiver is only an officer of the court and does not own or vest in the property as an estate that can devolve on another. The petitioners were appointed only after the death of the previous receiver, and their appointment operated from the date of the order, not retrospectively. No estate of the deceased receiver devolved upon them by death.
Conclusion: The petitioners were not legal representatives of the deceased receiver.
Final Conclusion: The notices issued under section 148 were without jurisdiction, and the writ petition succeeded, resulting in quashing of the impugned notices and consequent proceedings.
Ratio Decidendi: A later-appointed receiver cannot be assessed for income of earlier assessment years unless the income accrued or was received in that representative capacity, and liability under legal representation arises only where an estate devolves by death within the meaning of the Code of Civil Procedure.
TaxTMI 
AI Drafter ✕
TaxTMI 
