Case Details: Anita Rani vs. Income-tax Officer - [2025] 180 taxmann.com 562 (Punjab & Haryana)
Judiciary and Counsel Details
- Jagmohan Bansal & Amarinder Singh Grewal, JJ.
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Alok Mittal & Ishwinderpal Singh, Advs. for the Petitioner.
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Saurabh Kapoor, Rana Gurtej Singh, Ms Muskaan Gupta, Ms Muskan Chauhan & Tanya Kumar, Advs. for the Respondent.
Facts of the Case
The revenue assessed tax liability against a firm. The liability could not be recovered from said firm. KK, husband of the petitioner, was one of the partners of said firm. Revenue served a notice upon the Bank, informing it that a sum was due from KK, as a legal heir of his father, one of the partners of the firm. There was a credit balance in the account. The attached account was a joint account of KK and the petitioner.
The petitioner filed a writ petition before the High Court, contending that the funds in the bank account constituted rental income. The said income was not related to the firm’s liabilities. There was nothing on record indicating that the petitioner had inherited property from the firm’s partners.
High Court Held
The High Court held that Section 159 imposes liability on legal representatives, and Section 189 deals with the dissolution of the firm. The liability of the legal representative is confined to the value of the estate of the deceased. The liability cannot exceed the assets inherited.
In the instant case, the AO mechanically attached the petitioner’s bank account. There was a meagre amount in the account. The AO could attach the assets of the petitioner, which she had inherited from the partners of the defaulter firm. In the absence of evidence that the petitioner had inherited the defaulter firm’s assets, there was no reason to attach her bank account. Thus, the attachment notice issued by the AO was to be set aside.
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