02 July 2021
Respected sirs My client is nominee to capital gains account scheme in which his brother deposited the capital gains money to claim exemption. Being only brother, he nominated my client in the account to pass over the proceeds in case of any eventuality. Unfortunately due to covid he passed away. My client being nominee approached the bank for the funds to be transferred to his deposit account in the same bank. The proceeds are not intended to be utilised otherwise. The nominee intends to purchase a property. The deposit was made in July 2019 and have some more time for purchasing property. On being approached the banker handed over an application to my client, in which amongst other information, approval of original jurisdictional income officer approval is required. When my client approached the ITO, he said that the department has nothing to do either the bank can release funds to the seller on behalf of nominee or tax to be paid @ 20%. My question is under section 159 of income tax legal Representative is liable for assessment and tax . I quote the section Legal representatives.46 159. (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),— (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly
Thus the section clearly envisages that, which the deceased would have been liable to pay if he had not died,
The statutory time is not yet expired and some more time is left and the nominee is not willing to take away the money but to deposit the same at the same place under the same scheme.
I request your kindselves, to advice, whether the transfer of proceeds to my clients account requires approval from ITO and whether the same amounts to closure of the earlier account
CAclubindia
