TaxTMI 
TaxTMI 
1978 (2) TMI 12
X X X X Extracts X X X X
X X X X Extracts X X X X
....y wife after my death she shall act as the guardian of the persons and properties of my such sons, who will then remain minors till such of them attains 24 (twenty-four) years or married provided always that till the death of my said wife all of my sons irrespective of their age or marriage shall live jointly with my major sons. (4) That in the event of my sons predeceasing me or my wife after my death or in the event of any of them renouncing the world having no male heirs, his share subject to the life interest of his wife and marriage of daughters, if any, shall be taken by all other brothers or their respective heirs equally. (5) That in the event of my sons not attaining the age of inheritance at the time of death of my wife my eldest son, Ajit, with other major sons shall act as such guardian with no power of alienation." No executor was appointed under the said will. The wife and the major sons applied to this court for the grant of letters of administration in respect of the properties left by late Tulsi Charan Law. It is not clear from the statement of the case as to when that application was made. It is stated that probate proceedings were pending in this court a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e definite and so the property income should be allocated amongst the seven beneficiaries under the will and the assessment should be made under s. 161 but not under s. 168 of the I.T. Act, 1961. The ITO rejected the claim of the assessee. He held that since the dispute about the will was pending in this court the number of legatees and the share of each legatee remained indeterminate and so the question of allocation of income amongst the seven beneficiaries did not arise at all and the income from the estate should be assessed in the hands of the administratrix under s. 168 of the I.T. Act, 1961. He was also of the view that the allocation of property income claimed by the assessee's representative under s. 26 of the I.T. Act, 1961, did not arise at all and s. 168 of the I.T. Act did not contemplate any such allocation. He therefore, included the whole income of the estate in the assessments of the administratrix. The assessee preferred appeals for both the years before the AAC. It was urged before him that Sm. Mahamaya Dassi was a representative assessee under cl. (iii) of sub-s. (1) of s. 160 of the I.T. Act, 1961, and the assessment had to be made under s. 161 but not under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income." Section 160 of the I.T. Act, 1961, deals with representative assessee. It may be noted that under cl. (iii) of sub-s. (1) of s. 160 of the I.T.Act, 1961, " representative assessee " means : "in respect of income which the court of wards, the administrator general, the official trustee or any receiver or manager (including any person, whatever his designation, who in fact manages property on behalf of another) appointed by or under any order of a court, receives or is entitled to receive, on behalf or for the benefit of any person, such court of wards, administrator-general, official trustee, receiver or manager." Section 161 of the I.T. Act, 1961, which deals with the liability of representative assessee, is as follows: " (1) Every representative assessee, as regards the income in respect of which he is a representative assessee, shall be subject to the same duties, responsibilities and liabilities as if the income were income received by or accruing to or in favour of him beneficially, and shall be liable to assessment in his own nam....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (3) Separate assessments shall be made under this section on the total income of each completed previous year or part thereof, as is included in the period from the date of the death to the date of complete distribution to the beneficiaries of the estate according to their several interests. (4) In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied to the benefit of, any specific legatee of the estate during that previous year shall be excluded ; but the income so excluded shall be included in the total income of the previous year of such specific legatee. Explanation.-In this section, 'executor', includes an administrator or other person administering the estate of a deceased person." All these sections are in Chap. XV of the I.T. Act, 1961, which deals generally with liability in special cases. Before we embark to determine the question referred to this court, it will be necessary to examine whether s. 168 of the I.T. Act, 1961, would be applicable and, if so, in that case, whether there is any scope for allocation of income as contemplated by s. 26 of the I.T. Act, 1961, becaus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the reference. But if the determination of the question referred to the court involves examination of another legal aspect upon which depends the relevancy of the question posed to the court, in our opinion, in such a situation, it cannot be said that such another aspect could not be examined by the court. It is apparent in this case that if s. 168 of the I.T. Act, 1961, applies then there is no scope for any allocation of shares of income to the different parties. Then the question referred to this court would be wholly irrelevant and academic. In order to determine the relevancy of the question referred to this court, it is necessary for us to determine whether s. 168 of the I.T. Act, 1961, at all applies. From that point of view the question of applicability of s. 168 of the I.T. Act, 1961, is another aspect of the question to determine the relevancy of the question posed to this court. In such circumstances, in our opinion, it is not inappropriate for this court to examine the contention whether s. 168 is at all applicable or not. Reliance was also placed on the observations of this court in the case of CIT v. A. K. Das [1970] 77 ITR 31. There the court held that s. 256 of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fact as well as of law and such separate and independent controversy could not be entertained within the framework of the question referred and the court had no power to go into the new question not referred. The said observations, in our opinion, were made in an entirely different context. As we have mentioned before, the point whether s. 169 of the I.T. Act, 1961. applied in the facts and circumstances of the case and as such, there was no scope for the controversy whether the shares of the parties to the estate of Tulsi Charan Law were definite and ascertainable, in our opinion, is another aspect of the question referred to us. The examination on this aspect is necessary, before we could examine the question referred to us, as being relevant, otherwise the question referred to us would merely become an academic one. In those circumstances, therefore, we are unable to entertain the objection of the assessee as to the examination of the question whether s. 168 of the I.T. Act, 1961, at all applied to the facts of this case. Then we have to examine whether s. 168 does apply to the facts of this case. We have set out the relevant provisions of s. 168 of the I.T. Act, 1961. In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....under s. 211 of the Act the right of enjoyment belongs to the beneficiary. Section 213 stipulates that no right as executor or legatee can be established in any court of justice, unless a court of competent jurisdiction has granted probate of the will under which the right is claimed, or has granted letters of administration to the will or with authenticated copy of the will annexed. Section 214 deals with the proof of right of title as a condition precedent to the recovery through the courts of debts from debtors of the deceased person. Section 227 of the Indian Succession Act provides that probate of a will when granted establishes the will from the death of the testator and renders valid all intermediate acts of the executor as such. Section 232 of the said Act provides for grant of administration to universal or residuary legatees when the deceased has made a will but has not appointed an executor or when the deceased has appointed an executor who is legally incapable or refuses to act and or who has died before the testator or before he has proved the will, or where the executor died after having proved the will but before he has administered all the estate of the deceased. Wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an administrator of his estate is constituted, the district judge, within whose jurisdiction any part of the property of the deceased person is situate, is authorised and required to interfere for the protection of such property at the instance of any person claiming to be interested therein, and in an other cases where the judge considers that the property incurs any risk of loss or damage; and for that purpose, if he thinks fit, appoint an officer, to take and keep possession of the property." In England the position of the administrator pendente lite has been thus stated in Williams and Mortimer on Executors, Administrators and Probate, 1970, 15th edn., Chap. 30, Limited Grants; Sec. " O ", dealing with the " Administration pendente lite " at page 296, and page 298 under the heading " Powers and duties of an administrator pendente lite ". It is stated therein as follows : " The administrator has all the rights and powers of a general administrator, other than the right to distribute ; he is subject to the control of the court and must act under its direction. He is an officer of the court, under the direction of which he represents the deceased. The powers and duties of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... an administrator, who has all the rights and powers of a general administrator other than the right of distributing the residue; he is subject to the immediate control of the court, and acts under its directions. The court is not bound in this case to appoint two such administrators where a life or minority interest arises. In Tristram and Coote's Probate Practice, 23rd Edn., at p. 583, the duties and powers of an administrator pendent lite have been noted as follows : "Duties of administrator: The duties and liabilities of an administrator pendente lite are governed by s. 163 of the judicature (Consolidation) Act, 1925. He is an officer of the court, under whose direction he represents, the deceased. His duties begin from the date of the order and terminate with the decree, whether there is an executor named in the will or not. His powers begin from the date of the grant made to him, which becomes inoperative with the decree. It is not formally revoked, but ceases. An appeal operates as an extension of the suit, and the administrator Pendente lite continues to act until the suit is finally disposed of. The grant revives for this period. Powers: He is not allowed to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hing the existence or the validity of the will. If there is such a dispute then there cannot be any question of administering the estate of the deceased because whether there will be anything to administer according to the terms of the will would depend upon the validity of the will which is in dispute. Section 247 only contemplates the preservation of the property until the question as to the existence or the validity of the will is determined. In those circumstances, in our opinion the administrator or administratrix pendent life is different from the administrator as such, contemplated under s. 168 of the I.T. Act, 1961. It may also be mentioned that s. 104 of the Succession Act is important because in the case of legacy in general terms the legatee has vested interest in it from the day of the death of the testator. So, from that point of view the property vests in the legatee. There is another aspect of the matter. If it is ultimately held that there is no will then the administrator or administratrix pendente life cannot be said to be holding the property of the deceased because if there is no will then the property of the deceased would devolve on the heirs at law or on inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assets or to give discharges and, therefore, it was necessary to appoint an administrator pendente lite. Therefore, when a suit was pending touching the validity of the will there was nobody to give a legal discharge and in that context it was observed that the administrator pendente lite had the estate vested in him and it did not mean that the property became vested in the administrator pendente lite beneficially and for all purposes and the income of the beneficiary became the income of the administrator pendente lite. Reliance was also placed on certain observations of the Division Bench of this court in the case of Bajranglal Khemka v. Smt. Sheila Devi [1970] 74 CWN 444, where the court observed that the administrator pendente lite had all the powers of a general administrator that the estate of the deceased vested in him. The attention of the court was not drawn to the fact that the administrator pendente lite did not have the power to distribute the assets that the general administrator had as we have noted from the section itself. But the said observations, in our opinion, do not in any way affect the position as to whether the administrator spoken of in the Explanatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e said decision, in our opinion, does not in any way affect the question with which we are concerned in the instant reference. In the case of Hem Nalini Judah v. Isolyne Sarojbashini Bose, AIR 1962 SC 1471, the Supreme Court observed that s. 213 of the Succession Act created a bar to the establishment of any right under the will by an executor or legatee unless a probate or letter of administration of the will had been obtained, whether the right was claimed by a person as a plaintiff or as defendant. The words of s. 213 were not restricted only to those cases where the claim was made by a person directly claiming as a legatee. The section did not say that no person could claim as a legatee or as an executor unless he obtained probate or letter of administration of the will under which he claimed. What the section said was that no right as an executor or legatee could be established in any court of justice unless the probate or letter of administration had been obtained of the will under which the right was claimed and, therefore, it was immaterial who wished to establish the right as a legatee or an executor. The said observations in our opinion, do not help the instant question w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Administrator-General's Act, 1913, read with s. 269 of the Succession Act, 1925, to take over and manage the property of the deceased. The question was how the income of the property in the hands of the receiver should be assessed. It was held that the receiver was a person appointed by an order of the court for managing the property of the deceased on behalf of the executors, within the meaning of s. 41(1) of the I.T. Act, and assessment had to be made on the receiver with regard to the income of the estate in like manner and to the same amount as would be made on the executors under s. 24B as an association of persons, i.e., at the rate applicable to the total income on the aggregate income of the estate. It was further held that under s. 211 of the Indian Succession Act, 1925, the executor of a deceased is his legal representative for all purposes and all the property of the deceased person vested in him as such. The property vests in the executor by virtue of the will and not because of the probate. It is the will which gives the property to the executor. The grant of probate is only the method by which the will is established and the estate vests even before the grant o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e context of the facts which were entirely different from the facts of the present case and, therefore, in our opinion, it is not necessary for us to discuss the aforesaid decision in any detail. Counsel for the revenue also drew our attention to the observations of this court in the case of CIT v. Ganga Properties Ltd. [1970] 77 ITR 637. The said observations relating to beneficial ownership and legal ownership were also made in a different context and we do not think that the said observations will have any relevancy in deciding the controversy in the present case. Our attention was also drawn to the decision in the case of James Anderson, Administrator of the Estate its India of Henry Gannon v. CIT [1963] 47 ITR 229 (Bom). There, the Bombay High Court was dealing with the nature of the liability of the executor. But the court was dealing with the position under the Indian I.T. Act, 1922, which did not have a provision similar to s, 168 of the I.T. Act, 1961. Furthermore, the context in which the observations of the Division Bench of the Bombay High Court were made in that case were different. We may incidentally mention that the said decision of the Bombay High Court has b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vings from the income of the estate. They were not competent to sell any portion of the corpus of the estate for this purpose. On 24th August, 1938, the sons obtained probate of the will but on 10th May, 1948, the Administrator General of West Bengal was appointed administrator and letters of administration de bonis non of the estate were granted to him. In the relevant accounting periods, the administration of the estate were not complete and the question was whether the income from the estate was specifically receivable on behalf of the sons, who were the residuary beneficiaries. It was held that as the administration of the estate was not complete, the administrator-general received the income of the estate on his behalf and not on behalf of the sons who were residuary beneficiaries and as such s. 41 of the Act of 1922 did not apply. The position here is entirely different. Here, there is no administrator de bonis non. The administratrix pendente lite, as we have mentioned hereinbefore, performs entirely different functions. She holds the estate until the question is decided whether there has to be an administrator with a copy of the will annexed or an executor is to be appointe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....whether Suit. Mahamaya Dassi can be said to be managing the affairs on behalf of the other heirs because there was no order of appointment so far as the first year is concerned. But in the instant reference this controversy has not been urged and both the revenue as well as the assessee have proceeded on the basis that she was so managing. And, therefore, she is to be treated as a representative assessee. The question is, whether the shares of the beneficiaries can be said to be either definite or ascertainable. The case of the revenue is that in view of the pendency of the proceedings regarding the validity of the will, the shares have become indefinite and cannot be ascertained. It was urged that if the will is proved as valid then the parties would have 1/7th share and on the other hand if it was held that the will was not valid then the parties would have 1/11th share. It was therefore, urged that the parties would have either 1/7th or 1/11th share because of the pendency of the litigation. This question, so far as this court is concerned, in our opinion, is concluded by the judgment of the Division Bench of this court in the case of In re Keshardeo Chamria [1937] 5 ITR 246. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... make the share indefinite or unascertainable. Reliance was placed, however, on certain observations in the case of the decision of the Lahore High Court in Sh. Abdul Rahman v. CIT [1944], 12 ITR 302.There, a Muhammedan died leaving two sons and daughters and they were assessed for some years as an association of individuals. The daughters instituted a suit for partition claiming their shares according to Muhammedan law. The brothers contended that the family was governed by Christian law under which the daughters were altogether excluded from inheritance. There, the court held on an application under s. 9(3) of the Indian I.T. Act for separate assessment of the shares of each individual in respect of income from property, that so long as the litigation between the parties was pending it was impossible to hold that the shares of the parties were definite and ascertainable within the meaning of s. 9(3) of the Indian I.T. Act and that the parties were not entitled to have their shares of the income separately assessed. The court noted that the term " definite " in ordinary parlance means " fixed, exact and clear " and in a case where even if it could not be decided as to how many hei....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e order of the AAC. On a reference, it was contended for the revenue that so long as the communion lasted the husband and wife had no definite and ascertainable share in the communion property. The Bombay High Court held that under the provisions of the Portuguese Civil Code as well as art. 10 of the Commercial Code, in the corpus as well as in the income of the communion property of the husband and wife, immovable as well as movable, the husband and the wife, each had during the subsistence of a marriage celebrated as per the custom of Goa, a fixed and certain half share which could be ascertained on the termination of the communion by divorce, separation or death. On the death of one of the spouses, communion property did not devolve by survivorship, but the half share of the deceased spouse went by succession to his or her own heirs or legatees. It was further held that the respective half shares of the husband and wife in the income from the house property which was the Property of the communion of the husband and wife married according to the custom of Goa, should be assessed separately in equal shares in the hands of each of them and not in the hands of the body of individual....