ORDER
B. L. CHHIBBER, A. M. :
The common dispute raised in these two appeals by the assessee is that the learned CIT(A) is not justified in confirming an addition of Rs. 99,000 for the asst. yr. 1982-83 and of Rs. 12,72,980 for asst. yr. 1981-82 belonging to the estate of her late husband to her income.
2. The relevant facts are that late Shri Anandrao Paur, the Ex-ruler of the erstwhile State of Dhar, died intestate on 25th April, 1980, leaving behind certain immovable and movable properties as his estate and his widow, the assessee, as his only legal heir. In the case of the assessee for the asst. yr. 1982-83, the ITO made an addition of Rs. 99,000 and Rs. 12,72,980 for asst. yr. 1981-82 on account of income from the estate of her deceased husband. By his order dt. 24th Feb., 1986 relating to asst. yr. 1982-83 passed under S. 250 of the IT Act, the CIT(A) deleted the aforesaid addition of Rs. 99,000.
3. Subsequently, the ITO filed an application under S. 154 of the Act before the CIT(A), requesting him to rectify the mistake apparent form record. In that behalf the ITO pointed out that the deceased had died intestate leaving no will behind him whereas in disposing of assessees appeal against the assessment order, the CIT(A) had proceeded to delete the addition on the assumption that a will had been left by the deceased. Thus, according to the learned ITO, the CIT(A) made a mistake apparent from record rectifiable under S. 154 of the IT Act. The learned CIT(A) accepted the contention of the ITO by confirming the addition of Rs. 99,000 made by the ITO in the assessment of the assessee.
4. Being aggrieved by the subsequent order of the CIT(A), the assessee came in appeal before the Tribunal with the following grounds :
“1. The learned CIT(A) has erred in law as well as in fact in making an addition of Rs. 99,000 belonging to the estate of late Anandrao Paur the ex-ruler of Dhar on the ground that the appellant is the sole survivor of her deceased husband.
2. Your appellant prays that unless the administration of the estate is complete, the income from property left by late Anandrao Paur does not devolve on the legal heir, and should not be included in the income of the appellant.
3. Your appellant further submits that the property left by late Shri Anandrao Paur remains the property of the estate till all the statutory liabilities are paid off.
4. Your appellant therefore prays that income of the estate of late Anandrao Paur included in the total income of the legal heir Shrimati Mrunalinidevi Paur of Dhar be deleted.
5. Your appellant relies on the judgment reported in the case of CIT vs. Bakshi Sampuran Singh (1982) 13 ITR 650 (P&H).
6. Your appellant craves leave to add, alter, amend and/or withdraw any of the grounds of appeal at the time of hearing of the appeal.”
It would be noticed that the assessee has not challenged the applicability of the provision of S. 154 of the Act.
However, when the appeal came up for hearing before the Division Bench, the assessee sought to raise the following additional ground :
“That order under S. 154 passed by learned CIT(A) is beyond jurisdiction as it raises highly debated points of law and hence it be cancelled as such.”
In his order, the learned Judicial Member, after discussing the circumstances under which action under S. 154 of the Act could be taken, admitted the aforesaid additional ground and set aside the order of the CIT(A) dt. 17th March, 1986 as under :
“11. To sum up, we are of the opinion that the effect of amendment made to his appellate order passed by the CIT(A) under S. 250 of the Act by recourse to action under S. 154 was rendering decision on highly debatable points of law whereupon there could have been possibility of two contrary opinions. Such being our opinion, we find it difficult to sustain the order under appeal.
12. In the result, this appeal succeeds and the order of the CIT(A) passed on 17th March, 1986 under S. 154 is set aside and that passed by him on 24th Feb., 1985, under S. 250 is hereby restored.”
10. The learned Accountant Member, on the other hand, also admitted the additional ground. However, he sustained the order of the CIT(A) dt. 17th March, 1986 and refused to deal with the merits of the case as under :
“6. The CIT(A) after receiving the application of the ITO had two option before his first of these being to recall his earlier order dt. 24th Feb., 1986 and to re-hear the appeal. This would have been the ideal thing for him to do on the facts of the case. The second option was to pass another order in continuation/supersession of the earlier order and it is this course which the learned CIT(A) adopted. In my opinion the order dt. 17th March, 1986 passed by the CIT(A) under S. 154 was perfectly valid in law since it tantamounted to recall/supersession of the earlier order dt. 24th Feb., 1986 and was for all purposes an order under S. 250. I wholly agree with the observations of my learned brother vis-a-vis the provisions of S. 154 and the situations to which these are applicable but would reiterate that these would not apply to the facts of the present case.
7. In the final analysis, I would reject the additional ground raised by the assessee. I may mention at this stage that we heard both the parties on the merits of the case as well but since my learned brother has not adjudicated upon these I am not in a position to express my views. The merits would be required to be decided after the difference of opinion has been resolved by the Third Member.”
5. Since there was difference of opinion between the two Members of the Division Bench, the matter was referred to the Third Member (Sr. Vice-President) who after hearing both the parties, by his order dt. 23rd Oct., 1992 directed as under :
“After going through carefully, the orders of my learned colleagues, I am inclined to agree with the conclusion arrived at by the learned Accountant Member that the CIT(A) was justified in passing the order dt. 17th March, 1986 under S. 154 of the Act. However, since both the learned Members have not expressed their opinion on the merits of the inclusion of Rs. 99,000 in the total income of the assessee, the mater is restored back to the Division Bench for passing the order according to the majority decision, as well as for the disposal of the appeal on merits, after hearing both the parties.”
6. In accordance with the directions (supra), we proceed to decide the appeal relating to the asst. yr. 1982-83 on merits. For the asst. yr. 1981-82, the facts are identical to those relating to the asst. yr. 1982-83 except that the account involved is Rs. 12,72,980 and the learned CIT(A) while dismissing the appeal of the assessee has followed his predecessors order relating to asst. yr. 1982-83, under S. 154 of the Act. Accordingly, our decision in ITA No. 1583/A/86 relating to the asst. yr. 1982-83 will apply mutatis mutandis to the asst. yr. 1981-82.
7. Shri K. C. Patel learned counsel for the assessee, submitted that on merits the case stands squarely covered by the decision of Punjab & Haryana High Court in the case of CIT vs. Bakshi Sampuran Singh (1982) 133 ITR 650 (P&H). The learned counsel further submitted that the assessee was only an administrator of the estate of the late ex-ruler and till the administrator of estate of the late ex-ruler and till the administration of estate was complete, the provisions of S. 168 will apply. The learned counsel further submitted that the estate of the late ex-ruler of the erstwhile State of Dhar has been assessed to tax on substantive basis from the asst. yrs. 1981-82 to 1987-88 both under the income-tax and wealth-tax as per the details on page 9 of the paper book. The estate duty case of the late ex-ruler was completed in the year 1988 and only thereafter the administration of the estate came to an end and the assessee inherited the estate of late Shri Anandrao Paur. The learned counsel submitted that assessing the estate in the hands of the assessee will amount to double taxation which is not permissible under the law and in support of this contention, he relied upon the observations on page 247 of Chaturvedi & Pithisarias Income-tax Law, 4th Edition.
8. Shri M. S. Rai, the learned Senior Departmental Representative, submitted that the facts of the present case are distinguishable from the facts of Bakshi Sampuran Singhs case (supra) where the deceased had left a will in favour of his only son. In the present case the late Shri Anandrai Paur had not left any will and the assessee being a sole surviving heir to the deceased of her late husband was liable to be taxed in respect of the income arising out of the estate. According to the learned Senior. Departmental Representative, the provisions of S. 168 are not applicable in this case, as there was no will and hence there was no executor. He placed reliance on the judgment of Bombay High Court in the case of CWT vs. Keshub Mahindra (1983) 139 ITR 22 (Bom) and the judgment of Kerala High Court in the case of K. Kunhi Mohammad Hajee vs. State of Kerala & Anr. (1974) 93 ITR 193 (Ker).
9. We have considered the rival submissions in the light of decisions cited before us. No doubt, the assessee is a sole surviving heir to the estate of her late husband. This fact alone will not lead to the conclusion that the assessee has inherited the estate right from the date her husband expired. The important aspect which the authorities below have ignored is the administration of the estate. The assessee has been assessed on substantive basis in respect of the estate of her late husband both to income-tax and wealth-tax by the ITO, Indore from the asst. yrs. 1981-82 to 1987-88. It is a fundamental rule of the Law of Taxation that, unless otherwise expressly provided, income cannot be taxed twice – Laxmipat Singhania vs. CIT (1969) 72 ITR 291, 294 (SC). This fact shows that the administration of the estate was not complete during the two assessment years under appeal before us. This fact also stands established that the estate duty case of the late ex-ruler of Dhar was finalised in the year 1988. The case of the assessee stands squarely covered by the decision of the Supreme Court in the case of Navnitlal Sakarlal vs. CIT (1992) 193 ITR 16 (SC). In this case, B died on 31st Dec., 1957, leaving a will executed on 6th Oct., 1956 wherein he had directed that his properties come up after payment of debts, taxes, estate duty, municipal tax and other outstandings as well as medical expenses, expenses for obsequial ceremonies and charity shall, after his death, be taken possession of by his two grandsons (of whom the appellant was one) and they shall use or enjoy them as they desired. No executor was appointed in the will. The ITO sought to assess Navnitlal Sakarlal (a legatee) in respect of a half share in the income from the properties. The Tribunal held that the estate of B was being administered by the two legatees and, hence, a separate assessment was to be made in respect of the estate under S. 168. On a reference, the Gujarat High Court reversed the decision of the Tribunal holding that the residuary estate must be said to have been ascertained, as it was capable or easily capable of being ascertained. On appeal, the Honble Supreme Court reversing the decision of the High Court held that there was nothing to suggest that the payment of the estate duty was delayed deliberately by Navnitlal Sakarlal and to show that the only thing that remained to be done was the payment of estate duty. There was no information on record regarding the various assets and liabilities of the estate shown by the executor. No attempt had been made to find out whether there were any other outstanding liabilities and when these were discharged. The Honble Supreme Court further held that the fact that estate duty was a personal liability of the heirs and was a charge on the immovable properties passing on death did not detract from the duties and responsibilities of the executor, as an accountable person, to make satisfactory arrangements for the payment of the estate duty. The fact that a part of the estate duty liability was outstanding could not be ignored in deciding the issue as to whether the administration was complete. The Honble Supreme Court approved the judgment of Punjab & Haryana High Court in the case of CIT vs. Bakshi Sampuran Singh (supra) and of the Honble Calcutta High Court in the case of CIT vs. A Ghosh (1986) 159 ITR 124 (Cal) holding that “In fact, even in what may be described as much clearer situations and where the executor was also the sole beneficiary, it has been held that the administration is not complete”.
10. We accordingly reverse the orders of the authorities below and hold that the assessee is not liable to be assessed in respect of Rs. 99,000 for the asst. yr. 1982-83 and Rs. 12,72,980 for the asst. yr. 1981-82 belonging to the estate of late Shri Anandrao Paur, the ex-ruler of Dhar.
11. In the result, the appeals are allowed.