TMI Blog1971 (8) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of a writ in the nature of mandamus commanding the respondents to refund to the petitioner the amount of Rs. 26,230.59 realised by the respondent No. 1 in excess of the amount that was legally due by Subodh Kumar Bose, since deceased, on account of income-tax. The petitioner is the widow and a heir and legal representative of one Subodh Kumar Bose (hereinafter referred to as "the deceased"). The deceased died on May 19, 1963, having published his last will and testament whereby the deceased appointed the petitioner as his sole executrix. Application for grant of probate of the said will has been made by the petitioner in the Court of the District Judge, 24-Parganas, at Alipore; the said application is still pending. The deceased was a barrister practising mainly at the High Court at Calcutta. At the time of his death a considerable amount was due and owing by different solicitors and clients to the deceased on account of professional services rendered by him. At the time of his death assessment of income-tax of the deceased for the assessment years 1962-63, 1963-64 and 1964-65 up to the date of his death were completed by the Income-tax Officer, "C" Ward, District III(I) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-sheet of the deceased for the assessment year 1965-66. By letter dated September 3, 1968, the petitioner requested respondent No. 1 to grant her time until the advocate of the petitioner who was out of Calcutta returned to Calcutta. Respondent No. 1 was not willing to grant any time to the petitioner. According to the petitioner there was no material whatsoever to enable the Income-tax Officer, the respondent No. 1, to believe that the income of the deceased for the assessment year 1965-66 had escaped assessment. At no point of time during the said year the deceased was alive. Therefore, there could not be any escapement of income of the deceased from tax for the assessment year 1965-66. Hence, the instant application to strike down the impugned notices and for the reliefs mentioned above has been made by the petitioner. The reason for starting proceedings under section 147 of the Income-tax Act of 1961, was not disclosed by the Income-tax Officer in the affidavit affirmed by him on April 10, 1970, the first affidavit filed in opposition to the petition. The revenue realised an aggregate sum of Rs. 1,09,625 from the law and professional clients of the deceased on diverse da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable to income-tax under the head "Profits and gains of business or profession". The other sub-sections to section 28 are not relevant for the purpose of the instant application. According to Dr. Debi Pal, the deceased who died on May 19, 1963, was not alive even during the year previous to the assessment year 1965-66. Thus, the deceased did not receive any money nor earned any income by carrying on his profession during the previous year. The deceased maintained his account on cash basis. The money received by the revenue under section 226 of the new Act in March, 1965, were arrears of fees payable to the deceased on account of professional work rendered by the deceased. Therefore, according to Dr. Pal, the ratio decidendi in Nalinikant Ambalal Mody v. S. A. L. Narayan Rao, Commissioner of Income-tax applies on all fours to the instant case and the said sum of Rs. 85,998 was not liable to be assessed to income-tax. A taxing statute must be construed strictly. If the legal personality of the deceased does not extend to the year previous to the assessment year 1965-66, his legal representative was not liable to file any return. Dr. Pal relied on Commissioner of Income-tax v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year in which the profession was discontinued was not chargeable to tax. The said income came within the head specified in section 6(iv) of the old Act but was not chargeable under the computing section, viz., section 10 of the old Act. It was held by the Supreme Court that the various heads of income mentioned in section 6 of the old Act were mutually exclusive and thus the said income could not be brought under the residuary head, i.e., section 6(v). The Supreme Court in the said case observed that the said receipt although would be income and included in the total income under section 4 of the old Act, the Act did not provide for taxation on whatever was included in the total income under section 4. Section 4 did not deal with chargeability of tax and was not the charging section. Section 3 was the charging section under the old Act, but income had to be brought under one of the heads specified in section 6 and would be charged to tax only if it was chargeable under the computing section in respect of that head. Such income which was under consideration of the Supreme Court in the said case was held could not be brought to taxation under the corresponding computing section, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included under the residuary head mentioned in section 6(v) of the old Act. If an income cannot be charged to income-tax under any of the heads mentioned in clauses A to E of section 14 of the new Act the same shall be chargeable to income-tax under the head "Income from other sources", mentioned in clause F of the said section 14, under the express provision of section 56(1) of the new Act. Thus under the new Act money received by a person on account of profits or gains of a profession which had been discontinued by him even prior to the year previous to that when he received the same would be chargeable to tax under the provisions of the new Act mentioned above. If Subodh Kumar Bose were alive, he would have been liable for income-tax chargeable on the sum of Rs. 85,998 realised by the revenue by means of proceedings under section 224 of the new Act. Will the death of Subodh Kumar Bose make any difference? In the instant case this money realised by the revenue by way of garnishee proceedings from the debtors of the deceased cannot be assessed as profits or gains from profession or vocation carried on by the assessee during the "previous year". In view of section 28(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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