TaxTMI 
TaxTMI 
2006 (5) TMI 140
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....appeals arise out of different assessment years and lastly, common question of law is involved in all these appeals. 4. The Hon'ble High Court further noted that the appeal filed by the revenue under section 27A of the Wealth-tax Act against an order, dated 27-10-1998, passed by ITAT in W.T.A. No. 42/Ind./94. By impugned appellate order, the Tribunal was pleased to dispose of other connected appeals arising out of different assessment years relating to same assessee (respondent herein) because in all appeals, common question of law based on same fact was involved. This appeal was admitted for final hearing on following substantial question of law: "Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in holding that the wealth of late Shri Anandrao Puar is not assessable in the hands of the assessee even though the assessee was the sale legal heir of the deceased who died intestate?" The Hon'ble High Court has passed the following order: "4. Having heard learned counsel for the parties and having perused record of the case, we are constrained to allow these appeals and while setting-aside of the impugned order remand the case t....
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.... submissions urged then record its finding with reasons duly supported with recent judicial verdicts of the Supreme Court and/or High Court on the issue involved and then reach to its conclusion one way or other. In case, if the Tribunal wish to rely upon its earlier decision which is undoubtedly one of the relevant fact then brief facts and reasoning contained in relation to that decision should be mentioned in the order so that it becomes a part of their order. It must then be also mentioned as to whether the said order has become final or is subjudice in reference proceedings or appeal at the instance of aggrieved partly and if so what is its status. A further effort must be made by mentioning in the order as to whether view so taken therein by the Tribunal is upheld or not by Supreme Court or High Court in some cases decided subsequent to the decision or whether it is subjudice in any higher court? Mere reference of any order without anything more indicates casual approach in the disposal of cases. 8. This Court as an appellate court cannot record its own finding on facts. This Court has to examine the finding recorded by the Tribunal keeping in view the parameters specified....
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....ing in view the aforementioned observations. Let the appeals be decided within 6 months as an outer limit. Parties to appear before the Tribunal on 6-2-2000. In view of the nature of order, which we have passed, remanding the appeal for hearing, we do not wish to answer the original question framed. 5. That is why these appeals have come up for hearing before this Bench and the assessee filed written submissions as well as following three orders of the Tribunal: 1. Copy of order of ITAT for the above mentioned four assessment years. 2. Copy of order of ITAT, Ahmedabad Bench for Income-tax assessment years 1981-82 & 1982-83 being ITA Nos. 1865/Ahd./88 & 1583/ Ahd./86. 3. Copy of order of ITAT. Indore Bench in the Wealth Tax appeals in the assessment year 1982-83 being WTA. Nos. 34/Ind./90 & 53/Ind./90. 6. The department has submitted in writing vide communication dated 6-3-2006 that there is no order of Tribunal of Ahmedabad Bench or the order of High Court in the case record for assessment year 1981-82. 7. Learned D.R. while relying upon the order of the Assessing Officer has pleaded that since late husband of the assessee died without executing any will, therefor....
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....N. Shroff [1963] 48 ITR 59 (SC) and CIT v. James Anderson [1964] 51 ITR 345 (SC). To overcome this lacuna, certain sections in Chapter XV were introduced in the Income-tax Act, 1961. Particular reference in respect of taxation of the income of the deceased can be made to sections 159 to 168. In the present case, section 168 which is a complete code in itself will apply. That as per section 168 till the estate of the deceased is distributed or determined a separate assessment of the estate will have to be done in the hands of the executor administering the estate. Section 168(2) also provides that the assessment of an executor shall be made separately from any assessment that may be made on him in respect of his own income. Section 168(3) further provides that separate assessments will be made for each year of the estate and that of the beneficiaries according to their several interest till complete distribution of the estate is done. That Explanation to section 168(4) defines executor to include an administrator or other person administering the estate of the deceased person. Thus section 168 is very clear that till the divisible estate of the deceased is determined, separate asses....
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....f the assessee could not be included in the assessment of the assessee under section 168. It was immaterial if the executrix herself was the residuary legatee and as such was entitled to the remaining income of the estate after the same was fully administered, since before the end of the relevant previous years estate duty assessments had not been completed and since the estate duty was a first charge on the estate and that had remained unpaid. Further, the Bombay High Court in the case of CIT v. Usha D. Shah [1981] 127 ITR 850 has explained the scope of the term 'executor', which is not to be understood in the restricted sense since as the Explanation to section 168 given an extended meaning to the word "executor" so as to include an administrator or other person administering the estate of the deceased person, i.e., one who is in de facto management of the property of the deceased person. In this case, the deceased had left no will yet his estate was assessed separately in the hands of the executor under section 16B. Looked from another angle, it is settled law that the same income/wealth cannot be taxed substantively in two hands for which reference is made to the earlier decisi....
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....ment that may be made on him in respect of his own net wealth or on the net wealth of the deceased under section 19. (5) Separate assessments shall be made under this section in respect of the net wealth as on each valuation date as is included in the period from the date of the death of the deceased to the date of complete distribution to the beneficiaries of the estate according to their several interests. (6) In computing the net wealth on any valuation date under this section, any assets of the estate distributed to, or applied to the benefit of, any specific legatee of the estate prior to that valuation date shall be excluded, but the assets so excluded shall, to the extent such assets are held by the legatee on any valuation date, be included in the net wealth of such specific legatee on that valuation date. Explanation.-In this section, "executor" includes an administrator or other person administering the estate of a deceased person." As per above noted Explanation, an 'administrator' is an 'executor' but none of these terms is defined in the Act so in order to find out its true meaning, aid is necessarily to be taken from Indian Succession Act, 1925 in which "e....
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.... our considered view the extended definition of "executor" given in the Explanation to section 168 or 19A is only intended to apply to the de facto administrator of an estate of a deceased, who had died testate, beside the person to whom letters of administration with a copy of will annexed is granted by the court and such provisions are totally inapplicable to the wealth from the estate of the person who has died intestate. 10. Similar situation came up for consideration before the Hon'ble Madras High Court in the case of A & F Harvey Ltd. v. CWT [1977] 107 ITR 326 while considering the scope of section 19A of the Wealth- tax Act, the Explanation to which is in identical terms to the Explanation to section 168 of the Income-tax Act, observed that: "It is clear from the express language of this section that it provides for assessment of the assets of a deceased in the hands of the executor or executors. From the very nature of the case, the section will apply only to a case where an assessee dies having executed a will and appointed an executor or executors. If he had died intestate, the estate would have gone to his heirs and, therefore, it is in the hands of the heirs that ....
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....estate would be assessable under section 168 during the period when there were disputes between her and the assessee whose status as daughter-in-law was under dispute. That decision was explained by a later Division Bench of the same court speaking through the same learned Judge in the case of Keshub Mahindra. The court at page, 46 of the report noted that the entire estate left behind by the husband of the assessee, Usha, was being managed by her mother-in-law, who had disputed the very status of the assessee as the wife of her son, and that there was ultimately a settlement as a result of which certain sum was paid to the assessee as the widow. For the assessment years which preceded the date of the settlement, the daughter-in-law whose status during those years was very much in dispute could not be assessed to tax by treating her as one of the sharers in the income of the estate of her husband. 13. Yet another case, similar point came up for consideration before the Full Bench of Hon'ble Madras High Court in the case of CIT/Wealth-tax v. P. Manonmani [2000] 245 ITR 48 and after discussion various aspects of these provisions and different case law, Hon'ble High Court has opine....
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.... administrator - whether de jure or de facto. The intention to apply this provision only to income from estates of those who died testate, is evident from the caption, viz., "executor", of the part in which this section occurs, which caption is applicable only to cases where the deceased had left a will, the reference in sub-section (4) to specific legatees who can exist only in cases where a will is in existence, the scheme of the provision which contemplates the existence of an estate which must needs be administered which would be the case where the deceased has left a will, the reference in sub-section (3) to the distribution of the estate to the beneficiaries who can only exist where there is a will, such beneficiaries tracing their right to the will which confers such benefit on them; the notable omission to use the term "heirs" in any part of the section which term would have been used had it been the intention to apply the provision to cases of intestate succession, as such heirs are not beneficiaries depending for their legacy on a testamentary instrument but who solely by reason of their relationship with the testator, are by law entitled to succeed to the estate vesting ....