Civil Appeal No 282 of 1960
Appeal from the judgment and order dated February 15 1956 of the Madras High Court in Writ Petition No 404 of 1952
K N Rajagopala Sastri and P D Menon for the appellant
R Gopalakrishnan for the respondent
October 20
The Judgment of the Court was delivered by HIDAYATULLAH J
Whether the legal representative of a deceased person who is assessed in respect of the total income of the latter person as if he were the assessee can be ordered to pay a penalty under section 461 of the India Income tax Act is the short question that arises in this appeal
One Ebenezer died intestate on November 22 1945 during his year of account which ended on March 31 1946
He left behind him the respondent E Alfred his son and eight daughters
For the assessment year 1946 47 the respondent was assessed under section 24B2 of the Income tax Act after a notice was issued to him under s222 ibid
The assessment was completed on March 26 1951 and a notice of demand was issued under section 29 of the Act
The respondent appealed against the order of assessment to the Appellate Assistant Commissioner but during the pendency of the appeal a penalty of Rs 250 was imposed upon 145 him under s 461 of the Act by the Income tax officer as he had defaulted in payment of tax on the due date
After the appeal was disposed of with very minor modifications a notice of demand was again issued to him to pay the tax on or before December 15 1951
On his default a second penalty of Rs 10000 was imposed upon him on March 8 1952
The respondent then filed a petition under article 226 of the Constitution in the High Court of Madras challenging the imposition and levy of penalty imposed upon him
The High Court held in his favour and quashed the two orders imposing penalty but granted a certificate of fitness to appeal to this Court
This appeal was then filed
In reaching the conclusion that section 461 of the Act did not apply to a legal representative the learned Judges of the High Court held that a legal representative could not be said to be included within the words of that section
when an assessee is in default in making a payment of Income tax because of the scheme of the Act particularly B 29 where a distinction is made between an assessee and other person
According to the learned Judges a legal representative is assessed as an assessee under a fiction in section 24B2 and that fiction comes to an end when the computation of the tax Or in other words the assessment is made
The learned Judges drew distinction between the three subsections of 8
24B and pointed out that sub section
1 only created a liability on the legal representative for collection of tax but did not refer to him for that purpose as an assessee and sub s3 which did not concern itself with collection did not refer to the legal representative as an assessee and held that the fiction in sub section
2 was created for the limited purpose of assessment and since that subsection also did not concern itself with collection the fiction could not be carried beyond assessment resulting in the determination of the tax
146 Thereafter according to the High Court the legal representative is not an assessee within the meaning of section 29 but can only be brought under tho words other person and inasmuch as sections 45 and 46 refer to an assessee in default the legal 3
representative cannot be treated as such and no penalty can either be imposed upon him or recovered
We are concerned with the definition of assessee before its amendment in 1953
That definition read as follows assessee means a person by whom income tax is payable The generality of this definition is sufficient to include even a legal representative who is to pay the tax though out of the assets of the deceased person
Section 24B which makes it legal representative liable is as follows 24B 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 the tax assessed as payable by such person or any tax which would have been payable by him under this Act if he had not died
2 where a person dies before the publication of the notice referred to in subsection 1 of section 22 or before he is served with a notice under sub section 2 of section 22 or section 34 as the case may be his executor administrator or other legal representative shall on the serving of the notice under subsection 2 of section 22 or under section 34 as the case may be comply therewith and the Income tax officer may proceed to assess the total income of the deceased person as if such executor administrator or other legal representative were the assessee
147 3 where a person dies without having furnished a return which he has been required to furnish under the provisions of section 22 or having furnished a return which the income tax officer has reason to believe to be incorrect or incomplete the Income tax officer may make an assessment of the total income of such person and determine the 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 the provisions of sections 22 and 23 have required from the deceased person
The scheme of the section which was inserted by the Second Amendment Act of 1933 and modified further by the Amendment Act of 1939 is as follows Subsection 1 of a 24B makes inter alia the legal representative liable to pay out of the estate of deceased person to the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person or any tax which would have been payable by him under the Act if he had not died
By this sub section a legal representative is made liable to pay the tax which might have been assessed but not paid by the deceased person or which might be assessed after his death
It covers all situations and contingencies and makes the liability absolute limited however to the extent to which the estate of the deceased is capable of meeting the charge
The subsection does not provide for issue of notices assessment collection or anything connected with the imposition levy and collection of the tax Subsection 2 and 3 next provide for different contingencies
Subsection 2 provides that where a person dies 148 before the publication of a general notice or before he is served with a special notice under s22 or s34 his legal representative shall on the service of the special notices comply with these notices and the Income tax officer may proceed to assess the total income of the deceased person as if the legal representative were the assessee
Sub section 3 provides that where a person dies after he has been required to furnish a return but without having furnished such return or where he has furnished the return but the Income tax officer has reason to believe it to be incorrect the Income tax officer may make the assessment of the total income of such deceased person and determine the tax after serving such notices as may be required under s22 or 23 upon the legal representative of the deceased person to produce the accounts documents or other evidence
In the present case the matter fell to be governed by the second sub section because Ebenezer died before the end of his year of account
The service of the notice upon the respondent and his assessment as if he were the assessee were made under the second sub section
By reason of this assessment the respondent became liable under the first sub section to pay out of the estate of Ebenezer the tax assessed to the extent to which Ebenezer s estate was capable of meeting the charge but he himself was deemed to be the assessee
No doubt the fiction made the respondent an assessee for the purpose of assessing the total income of Ebenezer
But the question is whether the fiction came to an end after the assessment so that he remained a mere debtor thereafter to the Department
The answer to this question would determine the further application of the other sections of the Act
When a thing is deemed to be something else it is to be treated as if it is that thing though in fact it is not
The original assessee being dead before the notice either general or 149 special to him he could not be treated as all assessee and the process of the Act is by the fiction made available against a different person like a legal representative who is fictionally deemed to be an assessee for purposes of assessment
The word assessment bears different meanings and in one sense it comprehends the entire process of computation and levy of the tax
It is in this sense that the legal representative becomes an assessee by the fiction and it is this fiction which has to be fully worked out without allowing the mind to boggle as was said in Commissioner of Income Tax vs Teja Singh1 applying the dictum of Lord Asquith in East End Dwellings Co Ltd vs Finsbury Borough Council2
If we turn to the definition of assessee it says that an assessee means a person by whom income tax is payable
A legal representative who by fiction is decreed to be an assessee therefore comes within this definition because he is a person by whom income tax is payable though out of the assets left by a deceased person
The assessment of the legal representative is then made under section 23 of the Act and he has the right to appeal under B 30 which he would not have if he ceased to be an assessee after the determination of the tax
We are not concerned in this case with the position of the legal representative under the third sub section of s24 B and are not required to consider what his position would be if he made a default in the payment of the tax
The fiction is enacted at least for the purpose of sub section
2 and it is to that subsection that we are confined in this case
Nor can the fiction in that sub section be limited by provisions of law for a totally different situation
Under s45 if a notice of demand is issued under s29 on an assessee and has not been complied with the assessee is deemed to be in default and under section 46 1 if the assessee is in default a penalty can be imposed
All these stages the respondent 1 1959 Supp
1 SCR 394
2  132 150 went through in this case
He was himself an assessee qua the assets and liability to tax of Ebenezer he was therefore an assessee in default and liable to the imposition of penalty for this default
The question is whether s29 which makes a distinction between an assessee and other person makes any difference
The High Court as well as the learned counsel for the respondent who pressed upon us the reasons of the High Court referred to the words of s29 where in addition to an assessee liable to pay the tax occur the words other person liable to pay such tax and observed that the respondent would fall to be governed by the words other person liable to pay such tax and not by the words the assessee liable to pay such tax
The High Court reasoned therefore that the words an assessee in sections 45 and 46 in their application are limited to an assessee who is assessed on his own behalf and not other person who is not an assessee
This distinction it observed must be borne in mind in interpreting the word assessee used in sections 45 and 46 and so construing limited the word assessee in those two sections to an assessee proper
The words other Person cannot apply to a legal representative if he is an assessee by fiction and the section has to be worked out to its logical conclusion
If he falls within the word assessee  as has been shown above he does not fall within the words other person and it is not necessary to find in this case what persons are there meant to be included
In our opinion the penalty could be imposed on respondent as an assessee
The appeal thus succeeds and is allowed with costs here and in the High Court
Appeal allowed


Summary:
One died intestate during his year of account Leaving g behind him his son A the respondent and eight daughters
After notice under section 22 2 of the Income Tax Act was issued A was assessed under section 24 2 of the Act and notice of demand was issued under section 29
The respondent appealed to the Appellate Assistant Commissioner but during the pendency of the appeal a penalty was imposed upon him under section 46 1 of the Act by the Income tax officer as the respondent had defaulted in payment of tax on the due date
After the appeal was disposed of a notice of demand was again issued to the respondent to pay the tax
On respondent s default a second penalty was imposed upon him
Respondent challenged this order by writ
The High Court quashed the order inter alia holding that section 46 1 did not apply to a legal representative as he was assessed as an assessee under a fiction in section 24B 2 and that fiction came to an end when the assessment was made for the fiction was created for the limited purpose of assessment and since that subsection was not concerned with collection the fiction could not be carried beyond assessment resulting in the determination of tax
The question was whether the fiction came to an end after the assessment so that the Legal representative remained a mere debtor to the department or could he be ordered to pay penalty under section 46 1 of the Act  Held that the fiction made the respondent an assessee for the purpose of assessing the total income of E
That fiction did not come to an end after the assessment
When a thing is deemed to be something else it is to be treated as if it is that thing though in fact it is not E being dead before the notice either general or special to his could not be treated as an assessee and the process of the Act was by fiction made available against the legal representative who was the assessee for purpose of assessment which meant the entire process of computation and law of the tax and the fiction had to be worked out to its logical conclusion
The definition of 144 the word assessee being defined in the Act as a person by whom income tax is payable the legal representative came within the definition and his assessment being made under section 23 he had also a right of appeal under section 30 since he did not cease to be an assessee after the determination of the tax at least for the purpose of sub section
2 of section 24 B and section 29 applied to the legal representative in his position as the assessee
Commissioner of Income tax vs Teja Singh 1959 Supp 1 SCR 394 and East End Dwellings Co Ltd vs Finsbury Borough Council1952 AC 109 referred to