Case: The Additional Income-Tax Officer,Salem Vs. E. Alfred

a special notice under S. 22 or S. 34 his legal representative shall, on the service of the special notices, comply with those 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 S. 22 or S. 23 upon the legal representative of the deceased person to produce the accounts, documents or other evidence,6. 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 not of the estate of Ebenezer the tax assessed, to the extent to which Ebenezers estate was capable of meeting the charge but he himself was deemed to be the assessee.7. 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-special, to him, he could not be treated as an 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 Commr. of Income-tax, Delhi v. .S. Teja Singh, 1959 Supp (1) SCR 394 : (AIR 1959 SC 352 ) applying the dictum of Lord Asquith in East End Dwellings Co.,Ltd. v. Finsbury Borough Council, 1952 AC 109 at p. 132.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 deemed 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 S. 23 of the Act, and he has the right to appeal under S. 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 S. 24B, 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-sec (2), and it is to that sub-section 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.8. Under S. 45, if a notice of demand is issued under S. 29 on an assessee and has not been complied with, the, assessee is deemed to be in default, and under s. 46 (1), if the assessee is in default, a penalty can be imposed. All these stages the respondent 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 S. 29, which makes a distinction between an assessee and "other person", makes any difference.9. 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 S. 29 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 Ss. 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 Ss. 45 and , 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 "assessed" by fiction, and the fiction has to be worked out to is logical conclusion. If he fails 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 the respondent as an assessee.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. 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 not of the estate of Ebenezer the tax assessed, to the extent to which Ebenezers estate was capable of meeting the charge but he himself was deemed to be the assessee.7. No doubt, the fiction made the respondent an assessee for the purpose of assessing the total income ofanswer 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-special, to him, he could not be treated as an 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 ofare not concerned in this case with the position of the legal representative under the third sub-section of S. 24B, 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-sec (2), and it is to that sub-section 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.8. Under S. 45, if a notice of demand is issued under S. 29 on an assessee and has not been complied with, the, assessee is deemed to be in default, and under s. 46 (1), if the assessee is in default, a penalty can be imposed. All these stages the respondent 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 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 S. 29 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 Ss. 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 Ss. 45 and , 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 "assessed" by fiction, and the fiction has to be worked out to is logical conclusion. If he fails 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 the respondent as an assessee.