Sabyasachi Mukherjee, J. - (1.) In this reference under Sec. 256(1) of the Income -tax Act, 1961 (hereinafter referred to as "the Act"), the following question has been referred to this Court: Whether, on the facts and in the circumstances of the case and on a correct interpretation of Ss. 159 and 168 of the Income -tax Act, 1961, the Appellate Tribunal was justified in holding that in respect of the income of the late 'Rana', which accrued to or was received by him till the time of his death, the assessments could be made on the 'Rani' who was his sole heir and legal representative? This reference relates to the assessment years 1946 -47 to 1951 -52. The assessee was an individual and his name was Lt. Gen. Madan S.S.J.B. Rana of Nepal (hereinafter referred to as "Rana"). He died on or about 20 -6 -1953 intestate leaving behind him his widow Rani Jagadamba Kumari Devi (hereinafter referred to as "Rani"). Rani was residing beyond the jurisdiction of this High Court at Varanasi. This Court on the application of Shri Shantilal Mehta (who was the duly constituted attorney in India of Rani) appointed him as the administrator of the estate of the late "Rana" by an order dated 16 -1 -1954. It may be appropriate to refer to the order appointing the administrator. The said order, after stating the fact that Rana died and further fact that constituted attorney of the Rana had applied that he died intestate and further fact that the sole heir was the Rani, observed, inter alia, as follows: For the use and benefit of the said Rani Jagadamba Kumari Devi and limited until she, the said Rani Jagadamba Kumari Devi, shall obtain from this Court Letters of Administration of the property of the deceased above -named, he, the said Shantilal Mehta, having undertaken to administer the said property.
(2.) In the course of the original assessments, Rana had made a declaration that the income received by him by various investments belonged to a trust of which he was only one of the 36 beneficiaries and the ITO, therefore, made the assessments on what according to the Rana was his share of the income of the trust. Later on, the ITO found that the trust was invalid and the declaration made by the Rana was false. He, therefore, reopened the assessments after obtaining the previous approval of the Board in order to assess the income which had escaped the assessments owing to the assessee's omission or failure to disclose in the course of the assessment proceedings fully and truly all facts necessary for the assessments. The ITO, therefore, issued notices under Sec. 148 of the Act for reopening of the assessments and served these notices on the Rani, who was the legal heir of the late Rana. These supplementary assessments were completed by the ITO by adding to the total income already assessed, the income from investments which had escaped assessment.
(3.) Against these assessments the appeals were preferred before the AAC and the Appellate Tribunal. While upholding the reopening of the assessments under Sec. 147(a) of the Act and also the additions made on account of income which had escaped assessments, the Tribunal went into the question as to who was the legal heir of late Rana. In this connection, the Tribunal observed that identical assessments had also been made on Shri Shantilal Mehta, administrator appointed by the Hon'ble High Court, and obviously the same income could not be assessed twice. The Tribunal, therefore, set aside the orders of the AAC and restored the appeals to the file of the AAC for determination of the proper person on whom the assessments could be made. When the matter was considered by the AAC again in response to this direction of the Tribunal, the AAC held that Shri Shantilal Mehta, who was the administrator appointed by the Hon'ble High Court under the provisions of Sec. 243 of the Indian Succession Act by order dated 16 -1 -1954 and remained as the administrator till he was discharged by another order of the Hon'ble High Court dated 21 -3 -1972, was the proper person on whom the assessments should have been made both for the income which accrued to or was received by the late Rana up to the date of his death, i.e., 20 -6 -1953, and on the income which accrued to or was received by the estate after the date of death of the deceased. He, therefore, cancelled the assessments.;