JUDGMENT This is a writ petition under article 226 of the Constitution of India. The relief prayed for by this writ petition is that notice under section 46(5A) of the Income-tax Act, dated 28th June, 1957, be quashed and attachment of the rents of the house known as Ujagar Bhawan, situate at Birahana Road, Kanpur, be raised.
The facts of the case shortly stated are as follows :
One Shri Shambhu Nath, the father of the petitioner, was assessed to income-tax for the years 1946-47 to 1952-53 and a tax liability of Rs. 2,08,807.56 nP. was created against him. On 28th June, 1952, Shambhu Nath died leaving the petitioner, Ram Kishore, and Brij Kishore, his sons, and his heirs and legal representatives. Prior to his death on the 29th January, 1948, Shambhu Nath advanced a sum of Rs. 1,00,000 to one Ujagar Lal Maharaj on the security of a usufructuary mortgage of the house in question belonging to the mortgagor.
The petitioner alleged that the real mortgagees under the aid mortgage were the aforesaid three sons of Shambhu Nath and Shambhu Nath was merely a benamidar on behalf of the sons, and that Shambhu Nath, during his lifetime, had executed a disclaimer in respect of this mortgage. In paragraph 6 of the affidavit filed in support of the writ petition, it is not necessary to rely upon the disclaimer. Accordingly, it must be assumed that the usufructuary mortgage of the house in question was Shambhu Nath. The house was in the possession of tenants and, by the impugned notice, rents of the house accruing due after the death of Shambhu Nath were sought to be attached for realisation of the tax demand against Shambhu Nath. It as stated in paragraph 8 of the affidavit that here was no rent due in the lifetime of Shambhu Nath. This statement in the affidavit has not been denied in the counter-affidavit. The question, therefore, which has been raised in this writ petition is that, having regard to the provisions of section 24B(1) and section 46 of the Income-tax Act, the rents falling due after the death of Shambhu Nath are the income of the petitioner and his brothers and do not form part of the estate of Shambhu Nath, deceased, and, as such, the said rents cannot be required to be paid to meet the tax demand against Shambhu Nath.
It may be stated that the petitioner and his brothers had raised the question of benami in the assessment proceedings against Shambhu Nath, through themselves, as legal representatives. It is stated in the appellate order dated 13th June, 1957, of the Appellate Assistant Commissioner, in appeal against the assessment orders, that no evidence was led by the petitioner regarding the benami character of the mortgage. It also does not appear that the petitioner raised the point, which he has raised in this petition, before the Income-tax Officer, upon the issue of the impugned notice by him. The petitioner appears to have filed the writ petition straightaway, upon the issue of the impugned notice to him, and to the tenants, and other creditors of Shambhu Nath.
The point has been urged by Dr. Asthana and Sri Jagdish Swarup, learned counsel for the petitioner, somewhat as follows : "that under section 24B(1), the liability for the payment of the income-tax of a deceased person by the legal representatives is only out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge....". It is urged that the estate of the deceased is only the property which has been inherited by the petitioner and his brothers on the date of the death of the deceased. The rents and profits of the house in question, which have accrued due since the date of the death of the deceased, are not the estate of the deceased, but are the income of the petitioner and his brothers. The rents and profits are not accretions or accessions to the estate. The estate is only what it was on the death of the deceased.
Sri Jagdish Swarup, learned counsel for the petitioner, has fairly conceded before me that so far as the enforcement of a decree against a legal representative under section 52, Civil Procedure Code, is concerned, the position is different. In the case of a decree, either against a deceased person, which is sought to be enforced against the assets in the hands of his representatives, or against his heirs, in respect of the debt incurred by the deceased, the same may be enforced not only against the corpus but also against the usufruct of the property or the asset left by the deceased. These provisions are amply borne out both the law in India as well as the law in England. In a Privy Council decision reported in Oolagappa Chetty v. Arbuthnot, it was stated as follows :
"Prima facie the polliem (zamindary) was hereditary. If it was hereditary and descended to the minor son as the heir of his father, the income of the zamindary was liable to pay the debts incurred by the deceased zamindar."
A different not seems to have been struck in a Division Bench case of this court in Rani Kanno Dai v. B. J. Lacy. At pages 236-37 of the report, it was observed as follows :
"There can be no doubt, as we conceive the law to be in this country, that this lady, as the widow of a separated and sonless Hindu, became, in virtue of her widows estate, entitled upon the death of her husband to the rents which might accrue from the immovable property. Those rents, if already received by her and put into her pocket, could not be treated in law as assets of her husband. They were her assets in virtue of her widows estate. It can make no difference if the rents which accrued due after her husbands death had not been actually put into her pocket. She was entitled to them, not as representative of her late husband, but in right of her widows estate."
This Division Bench case was considered by another Division Bench of this court in Mt. Phool Kunwar v. Rikhi Ram and dissented from it. At page 262 of the report, it is stated as follows :
"With great respect, we are unable to accept the view that the rents and profits receivable by her constituted property in her own right and are part of her personal estate. She was entitled to the possession of her husbands estate only because she happened to be his legal representative. But for that circumstance she had not right either to the estate left by her husband or its income. The fallacy of the argument underlying the observations quoted above is that the existence of a widows estate is recognised as against the estate of her husband. The nature and extent of a widows estate may be material, where the question arises between her and the reversioners, but there can be no widows estate, where the question is, whether the property once belonging to her husband is part of his estate or is part of the widows estate, which itself implies an estate carved out of the husbands estate. It continues to be the husbands estate, while it is in the possession of the widow, who represents it. If the observation quoted above had embodied the decision of their Lordships for the purposes of that case, we would have referred the question to a larger Bench. As, in our opinion, it is clearly an obiter dictum, which was not part of the actual decision of the case, we feel, with all respect, that we are at liberty to differ from it."
and they concluded their decision with the following observation :
"... it is not disputed that the appellants are in possession of the property of which the rents are in question, as the heirs and legal representatives of their deceased husband against whom the decree sought to be executed had been passed. This being so, the rents attached at the instance of the decree-holder are, in our opinion, part of the estate of the deceased."
There are cases of other High Courts also in which the same principle has been laid down. Only one case, namely, a Full Bench decision of the Madras High Court in Tirumalai Gandama Kondala Nagayya Ramakrishna Kadirveluswami Nayakar v. Easter Development Corporation Limited, London need by mentioned. The opinion of the Full Bench is to be found at page 537 of the report. Reference is made there to the decision of the Privy Council in Oolagappa Chetty v. Arbuthnot already cited above and an English case, Stratford v. Ritson. The Full Bench laid down the principle as follows :
"...... income accrued, since the late zamindars death, which has come into the hands of the new zamindar can be attached....."
With regard to this, Mr. Jagdish Swarup argued, that it was based upon the principles of English law and the question is whether the law in India is the same as the law in England. This precise question was specifically considered by the two referring judges in the Full Bench case. Their observations may usefully be quoted. At page 533 of the report, Oldfield J. observed as follows :
"..... I should have been prepared to decide in accordance with English law and the rule to be deduced from Indian statutes that accretions are liable...."
And at page 536 of the report, Venkatasubba Rao J. observed as follows :
"The result of the authorities appears to be that in England the income is treated as assets for the purpose of payment of debts. Is there any reason for refusing to give effect to this rule in India ? I see none."
After discussing the question on reason and general principles the learned judge further observed as follows :
"In the case of a son, liable to pay out of joint family property, his fathers debts, there is even greater reason to apply the rule. The son is liable under the Hindu law to pay the debts, not only out of his fathers share of the property, but also out of his own share. How then can be heard to say that the income from the property is not liable ?"
Only one more case and that an English case may be cited on this point. This appears to be the leading case in England and is In re Hyatt. At page 621 of the report, Chetty J., after discussion of the authorities and the statutes, observed as follows :
"The result is that the corpus is assets. Then why are not the rents assets ? Assets by accretion are known to the common law. The real estate is made an asset from the time of the debtors decease, not merely the corpus but the fruit; the rents and profits are necessarily included. That is shown by the constant course of the court in administration suits. The creditor, where the personal estate is insufficient, obtains an accounts of rents either in the original judgment or on further consideration where the account is required for the purpose of enabling him to obtain payment of his debt. Of course, where the corpus is sufficient, it is unnecessary to take the account..."
It is not correct for Mr. Jagdish Swarup to say that the rule, mentioned in the above quotation, is based only upon the statutory law of England. As appears from the quotation the rule was well known to English common law. It is elementary that rules of English common law can be applied in India if there is nothing in principle or authority against the same, and it they are in consonance with the principles of justice, equity and good conscience.
In support of his submission that, even though this rule might apply to enforcement of decrees under the Code of Civil Procedure, it could not apply to realisation of tax due from a deceased person against assets of the deceased in the hands of his representatives, Mr. Jagdish Swarup fairly conceded that he had no authority to support it. I do not see any reason why the rule should not apply to realisation of a tax demand. In a sense the proceeding for realisation of tax demand under an assessment order is a proceeding parallel to the enforcement of a decree. The proceeding in both the cases is for collection of moneys adjudged to be due. In regard to such collection, under the Income-tax Act, it has been observed, with reference to the collecting section in the English Income-tax Act, by Lord Parker, in a case, Drummond v. Collins, as follows, at page 540 :
"This section is a collecting section and not a taxing section, and there is no reason in principle why it should not receive a liberal interpretation."
In a later case, Whitney v. Commissioners of Inland Revenue, Lord Dunedin observed as follows, at page 110 :
"My Lords, I shall now permit myself a general observation. Once that it is fixed that there is liability, it is antecedently highly improbable that the statute should not go on to make that liability effective. A statute is designed to be workable, and the interpretation thereof by a court should be to secure that object, unless crucial omission or clear direction makes that end unattainable."
It, therefore, appears to me that the word "assets" in section 24B(1) of the Income-tax Act should be interpreted to include not merely the corpus but also the usufruct of the asset left by the deceased and it should make no difference that the usufruct accrued only after the date of the death of the deceased.
Here, additionally, the liability is of a Hindu son for a just debt of his father (named, the tax demand) and the observation of Venkatasubba Rao J. already quoted above in regard to such liability is apt, the more so, because I am dealing with this question in a writ petition under article 226 of the Constitution. It is well settled that the jurisdiction under article 226 shall be exercised only to promote justice or to remedy manifest injustice. In this connection reference may be made to the decisions in G. Veerappa Pillai v. Raman & Raman Ltd., Sangram Singh v. Election Tribunal, Kotah, A. M. Allison v. B. L. Sen, Pooran Singh v. Additional Commissioner, Agra and Sripat Narain Rai v. Board of Revenue. To my mind, if the petitioner and his brothers are made liable to liquidate the tax demand against their deceased father out of rents of the house in question, it will only be promoting justice and not perverting it.
There is one further difficulty in the petitioners way. It was undoubtedly open to the Income-tax Officer to proceed to recover the tax demand by the issue of a notice under section 46(5A). At the worst, he committed an error of law in seeking to proceed against property, namely, the rents and profits of the house in question, which, according to the petitioner, is not an asset of the deceased, but in order to entitle the petitioner to relief, it was necessary for him to show further that the error of law was such as could be characterised as "self-evident" or "apparent from the record". Unless the error fell in this class, the petitioner could not get relief by a writ of certiorari. This has been so held by the Supreme Court in Hari Vishnu Kamath v. Ahmed Ishaque and Satyanarayan Laxminarayan Hedge v. Mallikarjun Bhavanappa Tirumale.
The discussing of the point in this judgment would show that the error cannot be characterised as self-evident.
For the reasons stated above, I see no force in this writ petition and it is dismissed with costs.
Petition dismissed.