TMI Blog1989 (8) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay upon the value of the estate wealth-tax for the assessment year 1964-65. By order dated April 4, 1966, the appeal was dismissed. The matter was carried in second appeal to the Income-tax Appellate Tribunal. The Tribunal rejected the appeal, basing itself upon the judgment of this court in jamnadas v. CWT [1965] 56 ITR 648. On March 24, 1980, a Division Bench of this court decided the reference in CWT v. Keshub Mahindra [1983] 139 ITR 22 and the judgment was reported in January, 1983. The petitioner thereupon filed this petition averring that it became known to her only by reason of the reporting of the Keshub Mahindra judgment [1983] 139 ITR 22 (Bom) that no assessment could be made in law upon the executors of the estate of a deceased even for the assessment year relevant to the previous year in which the deceased had died. The petitioner claimed that the payment of wealth-tax pursuant to the assessment order dated November 6, 1965, had been made on the basis of a mistake of law. Such wealth-tax had been recovered without authority of law and the Union of India was bound to repay it. In jamnadas's case [1965] 56 ITR 648 (Bom), the main contention was that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the assessment year 1964-65. The assessee's father died on October 31, 1963. The assessee, while submitting the return for the assessment year 1964-65, which was relevant thereto, stated that he had filed a separate return of the net wealth of his father because, according to him, the estate was still to be administered and the final position could be ascertained only after completion of the administration of the estate. The Wealth-tax Officer declined to separately assess the estate of the father holding that the assessee, being the sole heir and the father having died intestate, took the entire estate with all the liabilities and, since the assessee had become the sole owner of the estate, he should have declared all the assets left by his father as his wealth. Consequently, he included the wealth of the estate as the wealth of the assessee in his personal assessment for the assessment year 1964-65. In the judgment, this court noted that the crucial question which had to be determined was whether the provisions of section 19 of the Act were attracted or whether the assessee was liable to be assessed to wealth-tax as the sole heir in whom the assets of his deceased fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... died thereafter. The deceased might have filed a return or he might not have filed a return or the assessment might have been completed and he might not have paid tax. It was to cover cases like these that the provisions of section 19 had been enacted. The court had no doubt that section 19 dealt with a case where an assessee died after the relevant valuation date on which his liability to pay wealth-tax had accrued. It was that liability which had to be worked out via the provisions of section 19 and the tax which the deceased was liable to pay or any other sum which would have been payable by him if he had not died had to be paid by the executor, administrator or other legal representative, subject to the limitation contained in section 19 that it was to be paid out of the estate and to the extent that the estate was capable of meeting it. The court noted that the judgment in Jamnadas' case [1965] 56 ITR 648 (Bom) was influenced by the construction placed by the Supreme Court on the relevant provisions of the Income-tax Act in Amarchand N. Shroff's case [1963] 48 ITR 59 (SC). The court observed that the distinguishing features between the provisions of the Income-tax Act and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubt that the assessment to wealth-tax made by the order of November 6, 1965, was without jurisdiction and that the wealth-tax which was recovered from the petitioner and her co-executors pursuant thereto was collected without authority of law. The next question to be considered is whether in such circumstances the court should, in exercise of its powers under article 226, order the repayment of the amount that was collected without authority of law. I need only cite the decision of the Supreme Court in Salonah Tea Co. Ltd. v. Superintendent of Taxes [1988] 173 ITR 42 (SC). Tax had been collected without authority of law. It had been paid, as here, pursuant to notices which were without jurisdiction. The Supreme Court held that where the assessment had been made without jurisdiction, it was manifest that the respondents had no authority to retain the money that had been collected and it was liable to be refunded. The question was whether, under article 226, the court should direct the refund. The court said (at p. 46), "Normally speaking, in a society governed by rule of law, taxes should be paid by citizens as soon as they are due in accordance with law. Equally, as corollary of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving regard to the judgment in Keshub Mahindra's case [1983] 139 ITR 22 (Bom),without jurisdiction and the tax collected on the basis thereof is without authority of law. Being without authority of law, it would be contrary to justice, equity and good conscience not to order its refund. (See Salonah Tea Co. Ltd.'s case [1988] 173 ITR 42 (SC)). That 25 years have passed since the tax was collected is hardly a ground to refuse the refund. I have no doubt that the heirs of the deceased will not raise any objections to the refund and will manage its distribution amongst themselves. In regard to the deduction of wealth-tax in the estate duty assessment, it will be open to the Revenue to take such proceedings as are, in law, available to it. That other assessees similarly placed, if there be any, may not secure refunds is no reason to deny it in this petition. I do not think that Rs. 53,000 is so trifling an amount that I should not order its refund. Lastly, whether or not the law has been laid down in the petitioner's case, the petitioner is entitled to the benefit of it. In the result, the assessment order dated November 6, 1965 (exhibit-A to the petition) is quashed and set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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