Estate administration under tax law does not extend to a receiver holding inherited property for creditors.

Section 168 applies only where a deceased person's estate is administered by an executor, administrator or other estate manager. A court-appointed receiver who merely takes possession of property, realises assets and deposits net proceeds for creditors does not administer the estate within that provision. The heirs inherited the property on intestate devolution, subject only to liability to discharge the deceased's debts to the extent of the assets inherited. On that basis, assessment of capital gains in the receiver's hands was not valid and the assessment framed against the receiver was held invalid.

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Issues: Whether the assessment of capital gains in the hands of the court-appointed receiver was valid under section 168 of the Income-tax Act, 1961.

Analysis: The deceased died intestate, and on his death his daughters inherited the property subject to the liability to discharge the father's debts only to the extent of the assets inherited. Section 168 contemplates assessment of the income of a deceased person's estate in the hands of an executor, and by Explanation includes an administrator or other person administering the estate. On the facts, the receiver appointed by the civil court was only to take possession of the properties, realise the assets and deposit the net proceeds for the benefit of creditors in the pending suit. That appointment did not amount to administration of the deceased's estate within the meaning of section 168. The court also noted that the creditors had no pre-existing right in the properties before the death and that devolution on the heirs was not suspended merely because suits and decrees were obtained later. The reference to section 52 of the Code of Civil Procedure, 1908 supported the limited extent of heirs' liability.

Conclusion: Section 168 was inapplicable, and the assessment framed against the receiver was invalid.

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