First Additional Income-Tax Officer vs T.M.K. Abdul Kassim
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Not extracted
Decision Date: 19 April 1962
Coram: J.C. Shah, M. Hidayatullah
The case titled First Additional Income‑Tax Officer versus T.M.K. Abdul Kassim was decided on 19 April 1962 before the Supreme Court of India, with Justice M. Hidayatullah authoring the judgment. The factual background involved the death of T.M. Khadir Mohideen, a proprietor of rice mills and other wholesale enterprises, who passed away on 11 August 1948, after the close of the assessment year 1948‑49. Following his death, a notice issued under section 22(2) of the Income‑Tax Act was served on his two sons. An assessment was subsequently made, determining a total assessable income of Rs 63,982. The tax calculated on that income amounted to Rs 23,648‑9‑0; after allowing for tax already paid under sections 18A and 23B, the net tax liability stood at Rs 19,903‑3‑0. Notices demanding payment of the tax were served on the respondent, T.M. Abdul Kassim, and on his brother Syed Mohammad. Neither brother paid the tax by the stipulated due date, and consequently a penalty of Rs 1,000 was imposed. The Income‑Tax Officer then issued a certificate under section 46(2) of the Act to the Collector of Ramanathapuram, who forwarded the certificate to the Special Deputy Tahsildar for Income‑Tax Collection for action under the Madras Revenue Recovery Act. The Deputy Tahsildar issued a notice on 17 July 1956 requiring payment of Rs 20,930‑3‑0 within one week. In response, on 7 August 1956, the respondent, T.M. K. Abdul Kassim, filed a petition under article 226 of the Constitution seeking a writ of prohibition against the Deputy Tahsildar, and he joined the First Additional Income‑Tax Officer, Karaikudi, as an additional respondent.
The Division Bench that heard the petition, relying on its earlier decision in Alfred v. Additional Income‑Tax Officer, concluded that the petitioner could not be treated as an assessee and therefore sub‑section (2) of section 46 was inapplicable to him. Accordingly, the Bench set aside the certificate by way of a writ of certiorari and nullified the notice dated 17 July 1956 issued by the Tahsildar. The matter was certified for appeal under article 133(1)(c), and both the First Additional Income‑Tax Officer, Karaikudi, and the Special Deputy Tahsildar filed the present appeal. The respondent was absent at the hearing. The High Court, in the judgment under review, observed that the validity of the assessment itself or of the penalty order was not contested before it; the respondent's sole contention concerned the certificate issued under section 46(2) of the Act and the reliance upon the provisions of the Revenue Recovery Act. Section 46(2) of the Income‑Tax Act provides that “The Income‑Tax Officer may forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue.” The High Court therefore framed the question whether the amount demanded from the respondent on the basis of that certificate could be characterised as “arrears due from an assessee.”
The Court examined whether the sum demanded on the basis of a certificate issued under section 46(2) of the Income‑Tax Act could be described as “arrears due from an assessee”. It referred to the earlier decision of the High Court in Alfred’s case, where the High Court had held that, for assessments made under section 24B(2) or section 24B(3), a limited legal fiction was applied that treated a legal representative as an assessee solely for the purpose of assessment. According to that judgment, the fiction ceased to operate once the assessment proceedings were concluded and the tax liability was finally ascertained. The High Court further relied on the distinction drawn in section 29 of the Act between an “assessee” and an “other person”, and concluded that a legal representative of an assessee could not be regarded as an assessee within the meaning of section 46(1). Building on that reasoning, the High Court observed in the present matter that “The logical extension of what we laid down in Alfred v. Additional Income‑tax Officer compels us to answer the question in the negative.”
Subsequently, the Supreme Court noted that the department had appealed the Alfred decision to this Court and that the appeal was pending when the present case was decided. The Court then reversed the Madras High Court’s judgment in Alfred’s case, as reflected in the citation Additional Income‑tax Officer v. Alfred. It held that the legal fiction created by sub‑section (2) of section 24B does not terminate with the conclusion of assessment proceedings; rather, it extends logically to the collection of tax from the legal representative of the assessee. The Court observed that the distinction between an “assessee” and an “other person” in section 29 is irrelevant for this purpose, because the legal representative is, in fact, the assessee himself and, as an assessee in default, is liable to penalties under section 46(1). Consequently, if the legal representative who was proceeded against under section 24B(2) must be treated as an assessee for assessment, levy and collection of tax, then the provisions of sections 45, 46(1) and 46(2) are applicable to him. In the Court’s opinion, both the certificate issued under section 46(2) and the notice dated 17 July 1956 were valid, and the High Court erred in quashing the certificate and setting aside the notice. Accordingly, the appeal was allowed, the judgment of the High Court was set aside, the writ petition was dismissed, and no order as to costs was made. The appeal was thus allowed.