K.S. Hegde, J.
1. This is a reference under section 55(2) of the Mysore Agricultural Income-tax Act, 1957 (which shall be hereinafter referred to as the 'Act'.)
2. The questions referred for the opinion of this court are as follows :
'(1) Whether section 24 of the Mysore Agricultural Income-tax Act, 1957, is applicable to the facts of the case and the residuary income derived by the executors and trustees is to be charged to agricultural income-tax at the hands of an association of persons representing the deceased
(2) Whether the beneficiaries cannot be assessed separately and the income received by the executors and trustees is one indivisible
(3) Whether the residuary income from the estates was divisible into six or in the alternative two equal shares each of which was receivable by six beneficiaries or the two sets of beneficiaries referred to in the will separately
(4) Whether section 10 of the Mysore Agricultural Income-tax Act, 1957 is the section applicable to the case to the whether the tax is to be levied upon and recovered from the executors and trustees in like manner and to the same extent as it would be levied by and recoverable from the beneficiaries and
(5) Whether the assessments should be made separately on the executors and trustees on behalf of each of the two sets of beneficiaries referred to in the will ?'
3. The material facts are as follows : One Mr George P White, who was a planter at Coorg, died on January 31, 1955. Before his death, he had executed a registered will dated March 4, 1954. Under that will several bequests were made to some of which detailed reference will be made in the course of the judgment. There is dispute between the petitioners and the respondent as regards the extent of tax liability under the 'Act' for the assessment year 1958-59, the account year being the financial year 1957-58. According to the department, the executors are liable to be assessed under section 24 of the 'Act', whereas it is contended on behalf of the executors that the assessment should be levied on them under section 10 of the 'Act'. Curiously enough, the department has proceeded to assess the estate of the deceased in the hands of the executors. We have earlier noticed that Mr. White died on January 31, 1955, and therefore the estate long ceased to be his estate. Hence, for the assessment year 1958-59 the department could not have assessed the estate of late Mr. White.
4. Though the Commissioner of Agricultural Income-tax has referred as many as five questions for the opinion of this court, after hearing both the sides we are of the opinion that only two questions arise for consideration. They are :
'(1) Whether, on the facts and in the circumstances of the case, the petitioner should have been assessed under section 24 or under section 10 of the Act and
(2) If section 10 is the relevant section, on whose behalf the executors should be assessed to tax ?'
5. Before proceeding to answer the questions formulated above, it is necessary to refer to the relevant portion of the will left by late Mr. White, under the will, the testator appointed (1) Captain J. A. A. Breithaupt of Attur Estate, (2) Mr. J. N. A. Hobbs, Manager, peirce Leslie & Co. Ltd., Mangalore and (3) Mr. Lionel Adred of Messrs. Peirce Lislie & Co. Ltd., to be the executors and trustees of the will. The executors were directed to pay off, as soon as possible after his death, all his funeral expenses, testamentary expenses, death duties and other debuts if any and all bequests in money of a non-recurring nature mentioned in the will. To enable the executors to discharge that duty, they were empowered to take possession of all the movable properties of the testator and sell the same. The executors were also authorised to collect all bank balances and cash due to the testator and convey to money the shares that he held in various limited companies. It was the hope of the testator that all monetary bequests of a non-recurring nature and all charges consequent of his movable and by realising the monies due to him and from the prices fetched for the shares. But, in case all the money bequests of non-recurring nature could not be met from the sources indicated above, the executors were authorised to make good the deficit from out of the income of the coffee estates left by the testator
6. It is unnecessary of refer to the non-recurring bequests made under the will. We are told that those bequests have been more less fully met. Under clause 4(d) of the will, the testator directed the executors, to pay Mrs. Gertrude Hillman, Retired matron of Civil Hospital, Mercara, a sum of Rs. 100 per month for life commencing from the month of his demise. Under clause (e) of paragraph 4, the executors were directed to pay Kottayi Ruby Ammal, a sum of Rs. 50 per month for life commencing from the month of the demise of the deceased. Under clause (i) of paragraph 4, the executors were directed to pay Bernadett Hunes, a sum of Rs. 50 per month so long as he is undergoing training. Under the will, Mrs. Mabel Francis Amos alias Mrs. Maurice alias Mrs. White is entitled to get a sum of Rs. 250 per month for her life. One Michael alias Thambi is entitled to get a sum of Rs. 100 per month during his lifetime. The executors were directed to pay for the education of the testator's children till they complete their education. A bequest of Rs. 400 per month was made in favour of Mrs. Dorothy White during her lifetime. One bungalow was bequeathed to Mrs. Dorothy White and two other bungalows bequeathed to Mrs. Mabel Francis Amos alias Mrs. Maurice alias Mrs. White. Then comes the provisions in respect of the residuary estate and they are set out in paragraphs 7 and 8 of the will. They read thus :
'7. I direct that the residue of income from estates after provision is made for all the aforesaid legacies be divided into two equal shares out of which each of the following set of persons shall be given a share :
(a) My son, Arthur St. Jhon White; my daughter Miss Carmel White, and may daughter, Dorothy Daphna White, together one share.
(b) Three youngest children of Mrs. Mabel Francis Amos alias Mrs. Maurice alias Mrs. White, namely Edward White, Oswald White and Blossom White, together one share.
In respect of the share of the income payable to my three children, Arthur St. Jhon, Daphna White and Carmel White, if any of them die the survivor or survivors of them will be entitled to the share. In respect of the share of income payable to my three children, Edward, Oswald and Blossom, I direct that it may be paid to their mother, Mrs. Maurice alias Mrs. White, during the minority that child may be paid its proportionate share leaving the balance to be received by Mrs. Maurice alias Mrs. White on behalf of the remaining minor children. On the attainment of majority by all the children the said Mrs. Maurice alias Mrs. White is not entitled to receive any share of her children but the children will receive their share in their own right.
8. The corpus of my residuary estate shall devolve in two equal shares, one share being taken by my children, Arthur St. John White, Miss Dorothy Daphna White and Miss Carmel White jointly. The other share shall devolve on my children, Edward, Oswald and Blossom, jointly. If either set of persons, taking a share of my residuary estate, predeceased me the residuary corpus of the deceased set of persons shall go to the surviving set or surviving sets.'
7. Now we may proceed to consider whether section 24 of the Act is applicable to the facts of the case. Section 24 says :
'(1) Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person, to the extent to which the estate is capable of meeting the charge of the agricultural income-tax assessed as payable by such parson or any agricultural income-tax which would have been payable by him under this Act if he had not died.
(2) Where a person dies before the 1st June in any year or before he is served with a notice under sub-section (2) of section 18 or under section 36, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub-section (2) of section 18 or under section 36, as the case may be, comply therewith, and the Agricultural Income-tax officer may proceed to assess the total agricultural income of the deceased person as if such executor, administrator or other legal representative were the assessee.
(3) Where a person dies without having furnished a return which he has been required to furnish under section 18 or having furnished a return which the Agricultural Income-tax Officer has reason to believe to be incorrect or incomplete such officer may make an assessment of the total agricultural income of such person and determine the agricultural income-tax payable by him on the basis of such assessment and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person had he survived, require from the executor, administrator or other legal representative of the deceased person any accounts, documents, or other evidence which he might under suction 18 or section 19 have required from the deceased person.'
8. This section corresponds to section 24B of the Indian Income-tax Act, 1922. Under section 24 of the Act, as in the case of section 24B of Indian Income-tax Act, 1922, the executor is merely discharging the liability if the deceased. He is liable to pay out of the estate of the deceased the tax payable by the deceased. None of the sub-section of section 24 applies to the facts of the present case. The learned counsel for the department very properly conceded that section 24 is inapplicable to the present case. As observed by a bench of the Bombay High Court in Commissioner of Income-tax v. Amarchand N. Shroff, section 24B of the Indian Income-tax Act, 1922, only deals with income which had not been accrued to or had been received by a person who died, but who had not been assessed and tax had not been recovered in respect of that income. The same would be the position under section 24 of the Act.
9. This leaves us with section 10. The portion that is material for our purpose is section 10(1)(a) which reads :
'In the case of agricultural income taxable under this Act, which the Court of wards, Administrator-General or Official Trustee or any receiver, administrator, executor, trustee, guardian or manager appointed by or under any law or by an order of court or by written agreement, is entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from such receiver, administrator, executor trustee, guardian or manager, as the case may be in the like manner and to the same amount as it would be livable upon and recoverable from the person on whose behalf such agricultural income is receivable and all the provisions of this Act shall apply accordingly.'
10. This section is based on section 41(1) of the Indian Income-tax Act, 1922. The only material difference between these two provisions is that whereas the executor as such is not included in section 41(1) of the Indian income-tax Act, he is included in section 10 of the Act. Section 10 provides that tax should be levied on the executor 'in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such agricultural income is receivable and all the provisions of this Act shall apply accordingly.' It must be remembered that an executor appointed under a will is receiving income on behalf of the beneficiaries mentioned in the will. He has no interest of his own in the income in question. Agricultural income of the estate bequeathed under the will is taxed in the hands of the executor only as a representative of the beneficiaries under the will. Therefore the measure of the liability of the executor should be co-extensive with that of the several beneficiaries. Section 10 is mandatory in its language. The basic idea underlying that provision is that the liability of the executor should be co-extensive with that of the beneficiaries and in no sense a wider or a larger liability : see Commissioner of Income-tax v. Balwantrai Jethalal Vaidya.
11. In this connection we may usefully refer to the decision of the Calcutta High Court in Birendra Kumar Datta v. Commissioner of Income-tax and the decision of the Patna High Court in Commissioner of Income-tax v. M. Habibur Rahman. I am clearly of the opinion that the present case clearly falls within the ambit of section 10.
12. The only question that remains to be considered is on whose behalf the executors could be assessed to tax It is contended on behalf of the petitioners that they should be assessed separately on behalf of the six children of late Mr. White mentioned in paragraphs 7(a) & 7(b) of the will, whereas according to the learned counsel for the department, they should be taxed on behalf of two sets of persons mentioned therein. From the language of the will, it is clear that no separate bequests were made in favour each of the six children. The testator constituted his children into two sets. Evidently the first set of children mentioned in paragraph 7(b) are the children of another mother. In the will it is clearly stated that these two sets will take separately. Arthur St. John, Daphna White and Carmel White together take one share and Edward, Oswald and Blossom together take another share. It is further mentioned in the will 'the corpus of my residuary estate shall devolve in two equal shares, one share being taken by my children, Arthur St. Jhon White, Miss Dorothy Daphna White and Miss Carmel White jointly. The other share shall devolve on my children, Edward, Oswald and Blossom, jointly. If either set of persons taking a share of my residuary estate predeceased me the residuary corpus taking a share of my residuary estate predeceased me the residuary corpus of the deceased set of persons shall go to the surviving set or the surviving sets.' From this it is clear that the testator intended to bequeath the residuary estate to two different sets of persons and not to the six children separately. Hence it must be held that the executors represent the two sets of persons mentioned in the will. From this it follows that the executors should be assessed accordingly.
13. Our answers to the questions formulated above are as mentioned above. The parties to bear their own costs in this court.
14. Order accordingly.