NAVNIT LAL SAKAR LAL versus COMMISSIONER OF INCOME TAX

Citation: [1991] SUPP. 1 S.C.R. 585 · Decided: 29-10-1991 · Supreme Court of India · Bench: S. RANGANATHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

NA VNIT LAL SAKAR LAL 
v 
COMMISSIONER OF INCOME TAX 
OCTOBER 29, 1991 
[S. RANGANATHAN, V.RAMASWAMI AND N.D. OJHA, JJ.] 
Income Tax Act, 1961: 
A 
B 
Section 168-lncome from estate of deceased person-Properties be-
queathed to two grandsons-No executor named in the will-Son of testator 
administering the estate-Part of estate duty liability outstanding-:v'esting of 
properties in the legatees-When takes place-Administration of es-
C 
tate-Wlzether complete-Half of the income from estate assessed at the 
hands of assessee one of the two legatees-Assessments whether validly 
made. 
The grandfather of the appellant assessee executed a will in 1956 
bequeathing his properties to the assessee and his brother. The testator D 
died in 1957 and since no executor was named in the will, his son 'S' 
describing himself as the legal representative of the deceased, furnished 
Income Tax and Wealth-Tax returns in respect of the estate of the 
deceased and he was assessed on the basis of the said returns up to 
assessment year 1967-68. 
E 
In respect of the assessee, the Income Tax Officer took the view that 
the estate of the deceased vested in the two grandsons viz., the assessee 
and his brother immediately on the death of the testator, as per the terms 
of the will. The Income Tax Officer included half of the income from 
properties left behind by the deceased in the total income of the assessee in F 
respect of assessment years 1963-64 ,to 1967-68, rejecting the assessee's 
contention that the estate was in the administration of the Executor and 
the income thereof had rightly been assessed in the hands of the executor. 
On appeal, the A,pellate Assistant Commissioner confirmed the view 
taken by the Income Tax Officer. However, the Income Tax Appellate . 
Tribunal took the view that the assessee was not taxable in respect of any G 
part of the estate of the deceased, and deleted the additions made in the 
assessment orders. 
At the instance of the Revenue, reference was made to the High 
Court on the question of assessability of the half share of the estate of the 
585 
H 
586 
SUPREME COURT REPORTS 
(1991) SUPP. 1 S. C.R. 
A deceased at the hands of the assessee, and the High Court answered the 
question in favour of Revenue. Aggrieved against .the High Court's orders 
the assessee preferred the present appeals. 
On ·behalf of the assessee, it was contended that where a person dies, 
the income of the estate of the deceased person is chargeable to tax in the 
hands of the executor, and since 'S' the son of the deceased was an 
B 'executor' within the meaning of Section 168 of the Income Tax Act, 1961 
· in respect of the estate of the deceased, the income from the properties left 
behind by the deceased was to be assessed in the hands of the Executor 
only and not in the hands of the appellant assessee, and that the discharge 
of the estate duty liability of the estate of the deceased being one of the 
primary functions of an executor the administration of the estate cannot be 
C said to be complete until the estate duty liability was properly provided for. 
On behalf of the Revenue, it was contended that the will contained a 
direct and simple bequest in favour of the assessee and his brother; that 
there was nothing in the estate to be administered and the properties 
vested in the two legatees immediately. It was also contended that the 
D delay on the part of the executor in making payment of estate duty and 
handling over the properties to the two legatees cannot postpone the vest-
ing of the estate in the two beneficiaries. 
Allowing the appeals, this Court, 
, HELD :1.1 Section 168(3) of the Income Tax Act, 1961 makes it clear 
E that the executor will continue to be assessed until the estate is dis-
tributed among the beneficiaries equally according to their several inter-
ests. This provision does not enact anything different from the 
pre-existing law on the subject. [596 BJ 
1. 2 
In view of the facts and circlimstances of the present case, the 
F High Court was wrong in coming to the conclusion that the administra-
tion must be deemed to have come to an end. 
Raghava/u Naidu & Sons v. C.l. T., (1950) 18 l.T.R. 787 (Mad.), 
referred to. (595 E] 
G 
2.1. Having regard to the nature of the properties left by the 
deceased it is clear that the executor had certain steps to take-before he 
could wash his hands off the administration of the estate. The movable 
properties and the immovable properties belonging to the 

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