By TIOL News Service

CHENNAI, DEC 14, 2018: THE ISSUE is - Whether assessee is residing in same property where the deceased one was living before his death, will render him as legal heirs/relative of deceased u/s 2(41) for tax purposes. NO IS THE VERDICT.

Facts of the case

The assessee, an individual, had approached this Court challenging the proceedings namely, the order of assessment passed in respect of A.Y 2010-11 and the demand notice issued u/s 156, calling upon the assessee and fourteen others to pay a sum of Rs.32,11,010/- being the tax arrears. The case of the assessee before this Court is that she is not an assessee under the present Revenue authority and the proceedings issued by treating her as one of the legal heirs of the deceased assessee, namely one Sadagopan Sulochana was also on a mistaken impression. Therefore, she contended that the proceedings issued, insofar as against the assessee could not be sustained. The assessee specifically stated in the affidavit filed in support of the writ petition that the deceased assessee, namely Sulochala, was the sister-in-law of the assessee's mother-in-law. She further stated that the she was neither a party to the Testamentary Original Suit nor the beneficiary under the Will claimed to have been executed by the said Sulochana.

High Court held that,

++ it is admitted that the assessee herein is not the assessee and on the other hand, one Sulochana was the assessee, who also was no more at the time of passing the proceedings. It is stated by the assessee that the said deceased assessee is the sister-in-law of her mother-in-law. Certainly, the definition of the term relative, as defined u/s 2(41), does not include the relationship between the present assessee and the deceased assessee. Therefore, the order of assessment and the consequential demand issued on the assessee by treating her as the relative of the deceased cannot be sustained in the eye of law. Merely because the assessee is residing in the same property where the deceased assessee was living before her death, cannot be a reason to conclude as if the assessee is also one of the legal heirs of the deceased. If such presumption is permitted, it would go against the definition of "relative" as defined u/s 2(41).

(See 2018-TIOL-2588-HC-MAD-IT)