TMI Blog1930 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... , he died. Mr. Reid was subsequently given a power of attorney in India by the executors or administrators of the estate, and on 27th November, Mr. Reid, under his power of attorney, made a return for Income-tax. On 28th December letters of administration in India were taken out by Mr. Reid. On 5th January 1929, the Income-tax Officer made an assessment on Mr. Reid as administrator. The officer then had some correspondence and an interview with Messrs. Little and Company, who were acting as solicitors for the estate, and as a result of that correspondence and the interview, the Income-tax Officer annulled his original assessment Under Section 23(1) of the Act and proceeded to make an assessment on the deceased Under Section 23(4). From that order there was an appeal to the Assistant Commissioner and the appeal was dismissed. The matter then came before the Income-tax Commissioner who took the view that the proceedings had been somewhat irregular. He pointed out that there was no appeal from an assessment Under Section 23(4) and therefore the proceedings before the Assistant Commissioner were irregular; he also took the view that the Income-tax Officer could not vary his own order a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then a company whose total income is, in the Income-tax Officer's opinion, of such an amount as to render such person liable to Income-tax, the Income-tax. Officer shall serve a notice upon him requiring him to furnish, within such period, not being less then 30 days, as may be specified is the notice, a return in the prescribed form. 7. That is the section under which notice was served on Sir Henry Proctor. Then Sub-section (4) provides: The Income-tax Officer may serve on the principal officer of any company or on any person upon whom a notice has been served under Sub-section (2) a notice requiring him to produce, or cause to be produced, such accounts or documents as the Income-tax Officer may require. 8. Then comes Section 23 which is the section under which the assessment has to be made. The first subsection provides: If the Income-tax Officer is satisfied that a return made Under Section 22 is correct and complete, he shall assess the total income of the assessee, and shall determine the sum payable by him on the basis of such return. 9. Then Sub-section (2) enables the Income-tax Officer to require the person who has made the return to produce evidence in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which payment can be demanded and it provides: When the Income-tax Officer has determined a sum to be payable by an assessee Under Section 23, or when an order has been passed under Sub-section (2), Section 25 or Section 28 for the payment of a penalty, the Income-tax Officer shall, serve on the assessee a notice of demand in the prescribed form specifying the sum so payable. 15. Well, it is quite clear that in this case if the Government is right the word assessee as used in the first part of that section a sum to be payable by an assessee Under Section 23 must be the deceased person Sir H. Proctor, and it is equally clear that the second use o f the word assessee in the sentence, the Income-tax Officer shall serve on the assessee a notice of demand, must refer to the administrator or personal representative of the deceased person, so that one is compelled to give to the word assessee different meanings in different parts of the same section. 16. Then the only other section one has to notice is Section 45, which provides that any amount specified as payable in a notice of demand shall be paid within the time, and at the place mentioned in the notice; so that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the collection of Income-tax, due on the income of a deceased person, from his estate in the hands of his legal representatives. The word used in all the operative sections is assessee, the person by whom the Income-tax is payable, and Section 3 shows that the assessee is the person who has earned the income. Section 23(1) speaks of the total income of the assessee and Sub-section (4) empowers the Income-tax Officer to make the assessment, i.e., an assessment on the total income of the assessee. Section 27 gives the assessee power to ask for a review of assessment in case it has been made ex parte Under Section 23(4) and Section 29 speaks of the sum payable by an assessee. 22. In fact it seems perfectly clear that the situation which has arisen in this case was not provided for by the legislature in express terms. 23. We are asked to hold, in fact, that when the legislature speaks of an assessee it impliedly meant an assessee or in the case of his death his legal representative. We have to find some principle by which this interpretation can be justified. The Commissioner relies on Section 23(4). His argument is that inasmuch as this subsection imposes a duty on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to pay Income-tax on his income on the previous 12 months, or to show that his income is below taxable limits. The claim of the Crown is a money one against his estate and does not resemble damages in a personal action; and it may be argued that in equity there can be no reason why the well known rule of interpretation, which has been adopted, as I have said, in special Acts, should not be use on behalf of the Crown to enable them to recover what may be called just dues. There is a good deal to be said for this view but I do not think it can be adopted in this case. It is stated in Maxwell's Interpretation of Statutes that fiscal statutes must be interpreted strictly in favor of the subject, and I take that to mean that the treasury cannot tax without the express permission of the legislature. This being so, the Commissioner must fail in this case, since undoubtedly there is no express permission in the Act to recover the tax from the estate of the deceased. Further, the rules of this Act are not rules of procedure to be interpreted by civil Courts, but are more in the nature of rules for the guidance of fiscal officers land it seems to me that such rules are intended by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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