ORDER
Vimal Gandhi, Accountant Member
1. This appeal by the revenue is directed against the order of the Commissioner of Income-tax (Appeals) dated 20th December, 1984. Two additions deleted by the CIT (Appeals) have been challenged in the several grounds of appeal. The assessee, Shri Venkatesh, is a minor and the assessment year involved in the appeal is 1981-82, for which the relevant accounting year ended on 14-10-1980. The first addition made relates to the income of Rs. 36,462 arising from properties settled on Venkatesh Trust for the benefit of the assessee. The learned CIT (Appeals) deleted this addition following order of the Tribunal dated 27-11-1979 in ITA No. 620 (Mds.)/79 in the case of the assessee for assessment year 1977-78, wherein the Tribunal held that similar income during minority of Venkatesh could not be included in assessee’s hand. The Income-tax Officer made this addition as according to him the order of the Tribunal has not; become “final”. However, as the matter is directly covered by the order of the Tribunal, we see no justification to interfere. The order of the CIT (Appeals) on this issue is accordingly upheld.
2. The second issue pertains to addition of income of Rs. 1,08,204 accrued on estate left by late Shri C.S. Ramachary. The facts in brief are that late Shri C.S. Ramachary bequeathed certain properties to his brother’s minor son, Venkatesh, as per his will dated 22-12-1973. The father of the minor, Shri C.R. Rajendran, has been made “the Executor” of the will. The relevant portion of the will is as follows:-
I have no issue male or female Mr. C.R. Rajendran, son of my brother, Mr. C.S. Varadhachary has been brought up by me since childhood. He has one daughter, Sitalakshmi 8 years of age and one son, Venkatesh, two month’s old. I hereby bequeath all jewels owned by me and left by my late wife, Smt. Visalakshi Ammal to Sitalakshmi, daughter of Mr. C.R. Rajendran. I hereby bequeath all other assets inclusive of shares, cash, movable and immovable properties and all other personal effects to C.R. Venkatesh, son of Mr. C.R. Rajendran. Till he attains majority, the assets and liabilities shall vest with Mr. C.R. Rajendran and I hereby appoint him as executor of this will with powers to manage the assets and liabilities at his absolute discretion and hand them over to his son C.R. Venkatesh after he attains majority.
There is no dispute regarding validity of the will and it is also admitted position that an income of Rs. 1,08,204 accrued in the assessment year in respect of the estate left by Shri C.S. Ramachary and bequeathed to Venkatesh under the will. In fact, the abovesaid income has been assessed in the hands of C.R. Rajendran as “Executor” of late Shri Ramachary under Section 168(2) of the Income-tax Act vid order dated 10-3-1984 by the 7th Income-tax Officer, Madurai-2. The above assessing not withstanding, the Income-tax Office while assessing Venkatesh added this income in the minor’s hands, as according to him, there was no difficulty in settling and distributing the assests left by Shri Ramachary among the various legatees, as laid down by the Testator. According to the Income-tax Officer, Shri C.R. Rajendran was managing the asset bequeathed to minor legatee as his natural guardian and not as “Executor” of the testator. The Income-tax Officer while treating the sum of Rs. 1,08,204 as income of minor also observed as under:-
I have given careful considerate to the submission of the assessee’s representative. The assessee is the sole legatee under a will and on the date of death it automatically becomes his property. Being a minor it is natural to expect that the estate be managed on his behalf but this does not anytheless make it property of anybody else. By operation of law relating to properties obtained under will the assessee gets the property of late Shri C.S. Ramachary on the date of his death. The income derived from such estate is, therefore, to be considered as income and clubbed with his other income.
3. On further appeal by the assessee, the CIT (Appeals) held that under Section 168(2) of the Income-tax Act, it is mandatory for the Income-tax Officer to assess the estate of the estate were the hands of the Executor so long as the execution proceedings remained incomplete and so long as the assets of the estate be not fully distributed. After agreeing with the assessee that execution was not complete in this case and property has not been distributed to the various claimants tthe learned CIT (Appeals) directed that the addition of Rs. 1,08,204 be deleted. He was also influenced by the fact that separate assessment under Section. 168(2) was already made by the department on the “executor” of late Shri C.S. Ramachary and income of Rs. 1,08,204 suffered tax in that assessment. The revenue is aggrieved and has brought this issue before the Tribunal.
4. Shri K.V. Ananthachari, the leaned departmental representative once again reiterated the points made by the Income-tax Officer for assessing income derived from the estate of late Shri C.S. Ramachary in the hands of the assessee. He submitted that the assessee was the sole beneficial owner of the estate and entire income accrued to him notwithstanding his minority as there was nothing awaiting completion of administration of the estate. Shri C.P. Rajendran, according to the learned departmental representative, was only a trustee of his minor child and could not be assessed as an “executor”.
5. Shri K. J. Rebello, the learned counsel for the assessee disputed that the execution of the will or the administration of estate was complete. It was pointed out that as per terms of the will of late Ramachary, the estate vested in Shri Rajendran as executor till the minor attained majority and till then the administration of the estate could not, be treated as complete. That apart, even certain LIC policies of the deceased are yet to be settled and suit O.S. No. 213 of 1982 relating to Pycara properties owned by the deceased is still pending. The administration of the estate as such was not complete and estate remained vested in executor. The learned counsel also relied on the decision of the Hon’ble Madras High Court in the case of M. Thirumani Mudaliar v. CWT [1974] 96 ITR 152.
6. We have carefully considered rival contentions of the parties and also will dated 22-12-1973 of late Shri C.S. Ramachary. Under Section 211 of the Indian Succession Act, Executor of a deceased person is his legal representative for all purposes and all the property of the deceased person vests in him as such. In the case in hand in the will it has been specifically provided that till Venkatesh attains majority, the assets and liabilities shall vest with Mr. C.R. Rajendran as “executor” of the will. The executor has been authorised by the deceased “with powers to manage the assets and liabilities at his absolute discretion and hand them over to his son C.P. Venkatesh after he attains majority. Thus, intention of the deceased that ascertained estate existing when assesses attains majority should vest in the assessee is made absolutely clear in the will. Having regard to the specific directions contained in the will and provision of Section 211 of the Indian Succession Act, we are unable to share the view that immediately on death of late C.S. Ramachary, his estate automatically vested in minor Venkatesh. In our opinion the estate vested and shall continue to remain vested in Shri C.R. Rajendran as executor and representative of the deceased till the minor attains majority. In these circumstances, executorial functions cannot be treated as completely performed and Shri Rajendran cannot be treated as trustee or representative of the minor. During the course of hearing of this appeal we were not shown any provision under which specific directions contained in the will could be disregarded and estate could be treated as having vested in the minor assessee. For the above reasons, we hold that the CIT (Appeals) has taken a correct view of the matter and the deletion of Rs. 1,08,204 is justified.
7. The second argument that income of Rs. 1,08,204 has already suffered tax in the hands of the Executor under Section. 168(2) of the Income-tax Act and therefore same amount can be assessed in the hands of the minor is also required to be accepted. Under Section 168 of the Income-tax Act, the income of a deceased person till the administration of estate is complete is to be charged to tax in the hands of the executor. The section does not leave any discretion in the hands of the income-tax authorities to assess any person other than the executor. The provisions are mandatory in nature. Sub-Section (4) of the said section is as under:
In computing the total income of any previous year under this section, any income of the estate of that previous year distributed to, or applied to the benefit of, any specific legatee of the estate during that previous year shall be excluded; but the income so excluded shall be included in the total income of the previous year of such specific legatee.
The sub-section requires that income of estate which was distributed or applied to the benefit of any specific legatee of the estate in any previous year is to be “excluded” from the total income of the executor and assessed in the hands of the specific legatee. It is an admitted position that income of estate has already been assessed in the hands of the executor and it has not been shown that any portion of the income which has already been assessed in the hands of the executor has been directed to be “excluded”. As per mandate of the above sub-section, only income “so excluded” could be assessed in the hands of the legatee. Without showing that income already assessed in the hands of the executor has been excluded addition in the hands of the assessee could not be made. We have already held that estate of the deceased remains vested in the executor and the administration of estate cannot be treated as complete. In the above circumstances, the revenue rightly assessed the income of the estate of the deceased under Section. 168(2) of the Act and the assessment of income of the estate of late Shri Ramachary in the hands of the minor was uncalled for. We agree with the view and approach of the learned CIT (Appeals) and uphold his order. The appeal is accordingly dismissed.