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K. Iswara Wariyar Vs. Commissioner of Agricultural Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberIncome-tax Referred case No. 86 of 1967
Judge
Reported in[1969]72ITR722(Ker)
ActsHindu Succession Act, 1956 - Sections 7(3); Agricultural Income Tax Act, 1950 - Sections 2 and 41(3)
AppellantK. Iswara Wariyar
RespondentCommissioner of Agricultural Income-tax
Appellant Advocate K.S. Paripornam and; V. Karunakara Menon, Advs.
Respondent AdvocateGovernment Pleader
Excerpt:
- .....the receiver appointed in a partition suit. the parties to this suit are the heirs of mannarghat moopil nayar. mannar-ghat moopil nayar died on january 3, 1960. the year of assessment is 1959-60. it is said that the mannarghat moopil nayar has filed no returns though notices were issued to him under sections 17(2) and 35 of the agricultural income-tax act, 1950. an assessment was, therefore, made for the year on the legal heirs of mannarghat moopil nayar on february 26, 1962. for the realisation of the tax and super-tax amounting to rs. 7,246.69 and surcharge thereon of rs. 362.33 demand notices were alsoissued to the heirs. after shri k. k. unni nayar was appointed as a receiver in the suit mentioned earlier of the sthanam properties, several communications were addressed to him for.....
Judgment:

1. The questions referred are:

'(1) Whether the imposition of the penalty on the appellant is valid and sustainable ?

(2) Having forwarded the certificate under Section 41 of the Act in respect of the arrears in question, whether it was within the competency and jurisdiction of the Agricultural Income-tax Officer to impose the penalty in question

2. The applicant is the receiver appointed in a partition suit. The parties to this suit are the heirs of Mannarghat Moopil Nayar. Mannar-ghat Moopil Nayar died on January 3, 1960. The year of assessment is 1959-60. It is said that the Mannarghat Moopil Nayar has filed no returns though notices were issued to him under Sections 17(2) and 35 of the Agricultural Income-tax Act, 1950. An assessment was, therefore, made for the year on the legal heirs of Mannarghat Moopil Nayar on February 26, 1962. For the realisation of the tax and super-tax amounting to Rs. 7,246.69 and surcharge thereon of Rs. 362.33 demand notices were alsoissued to the heirs. After Shri K. K. Unni Nayar was appointed as a receiver in the suit mentioned earlier of the sthanam properties, several communications were addressed to him for the payment of the tax, the super-tax and surcharge. It is unnecessary to refer to the various communications. Attempts were also made for recovery of the tax, etc., by resort to revenue recovery proceedings pursuant to Section 41(3) of the Agricultural Income-tax Act. Finally, an order imposing penalty, which is appendix B to the statement of the case dated November 23, 1963, was passed against the receiver, the said K. K. Unni Nayar. The first question that we have read poses the query as to whether the imposition of the penalty on the receiver is valid and sustainable.

3. The imposition is sought to be supported on the basis of the definition of the term ' assessee ' in Section 2(d) of the Agricultural Income-tax Act, 1950, which reads thus :

'2. (d) ' assessee ' means a person by whom agricultural income-tax is payable.'

4. It must be repeated here that no assessment has been made on the receiver as envisaged by Section 8 of the Agricultural Income-tax Act, 1950, or on the basis of Section 24 of the Act treating the receiver as a ' legal representative ' of the deceased, Mannarghat Moopil Nayar. And it is not seriously urged before us that the receiver appointed in the circumstances mentioned above will be the legal representative of Moopil Nayar. Section 7(3) of the Hindu Succession Act, 1956, runs thus :

'Notwithstanding anything contained in Sub-section (1), when a sthanamdar dies after the commencement of this Act, the sthanam property held by him or her shall devolve upon the members of the family to which the sthanamdar belonged and the heirs of the sthanamdar as if the sthanam property had been divided per capita immediately before the death of the sthanamdar among himself or herself and all the members of his or her family then living, and the shares falling to the members of his or her family and the heirs of the sthanamdar shall be held by them as their separate property. '

5. It is clear from the above that the persons who should have been assessed became the owners of the properties of the sthanam as those properties devolved on them. The death of Mannarghat Moopil Nayar had taken place after the coming into force of the Hindu Succession Act, 1956. They form the entire group of legal representatives of those properties and it is idle to contend that the receiver in the suit for partition of the estate, who can be said to be an officer of court in which court's custody the properties in the suit had come, can be termed as the legal representative liable to pay the tax as envisaged by the definition of the term ' assessee ' in Section 2(d) of the Act. It follows that Section 41 which enables the imposition of apenalty on an assessee cannot be pressed into service for the purpose of the imposition of a penalty on the receiver.

6. In the light of the above, question No. 1 has to be answered in the negative, that is, in favour of the receiver at whose instance this reference has been made and against the department. In the light of the answer to the first question, the second question does not arise for consideration.


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