Mohammed Asadulla S/o Abdul Azeez V. The Assessing Officer Income Tax Department Ward No.6(3)(1) and The Manager Union Bank of India R T Nagar Branch

WP/25325/2022

AI Insights

The case involves Mohammed Asadulla, the petitioner, who is the nominee of a Capital Gain Account held by his deceased wife, Smt. Shaikh Sajida. The account, which matured on 14.12.2021, was subject to a stipulation by the Assessing Officer requiring the production of a Legal Heir Certificate/Succession Certificate for its closure. The petitioner contested this requirement, arguing that as a nominee, he should not be required to produce such certificates. The court examined the provisions of the Capital Gains Accounts Scheme, 1988, particularly Rule 13, which differentiates the procedures for accounts with and without nominations. The court found that the petitioner's nomination entitled him to close the account without the additional documentation required for legal heirs in the absence of a nomination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798724 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 13-01-2023
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, Capital Gains Accounts Scheme, 1988, Indian Succession Act, 1925
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I; ASHWIN HALADY
• Assessee Lawyers: GIRISH KUMAR
• Keywords: Capital gain account; Closure of account; Legal Heir Certificate; Nominee; Succession certificate
• Section: 13(2); 13(3)

Judgement Text

" - 1 - WP No. 25325 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF JANUARY, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 25325 OF 2022 (T-IT) BETWEEN: MOHAMMED ASADULLA S/O ABDUL AZEEZ AGED ABOUT 62 YEARS R/AT NO.10/1 CN ENCLAVE APARTMENT DINNUR MAIN ROAD NEAR INDIA CANTEEN SULTHAN PALYA BANGALORE-560032. …PETITIONER (BY SRI. GIRISHKUMAR R., ADVOCATE) AND: 1. THE ASSESSING OFFICER INCOME TAX DEPARTMENT WARD NO.6(3)(1) BMTC BUILDING 80 FEET ROAD, 6TH BLOCK KORMANGALA BANGALORE-560095. 2. THE MANAGER UNION BANK OF INDIA R T NAGAR BRANCH BANGALORE-560032. …RESPONDENTS (BY SRI. E.I.SANMATHI, ADVOCATE FOR R1; SRI. ASHWIN S. HALADY, ADVOCATE FOR R2) Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA - 2 - WP No. 25325 of 2022 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE LETTER ISSUED BY THE R1 DATED 07.12.2022 AS ANNEXED IN ANNEXURE-A BEARING NO. ITBA/COM/F/17/2022-23/1047858465(1). THIS PETITION, COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner is aggrieved by the Communication dated 07.12.2022 (Annexure-A) addressed by the first respondent – the Assessing Officer insofar as there is a stipulation that he must produce Legal Heir Certificate/Succession Certificate from the competent authority for closure of a Capital Gain Account in the name of his wife, Smt. Shaikh Sajida. The petitioner’s case is that his wife, Smt. Shaikh Sajida, was holding Capital Gain Account in No. 530401034673925 with the Corporation Bank, Rahamathnagar Main Road, R.T.Nagar, Bengaluru – 560032 [now merged with - 3 - WP No. 25325 of 2022 the second respondent – the Union Bank of India], and this account has matured on 14.12.2021. However, in the meanwhile, his wife Smt. Shaikh Sajida has died on 21.11.2020. As such, he has filed applications/representations for approval of the first respondent to close the Capital Gain Account which would enable him to purchase another immovable property, and he is issued with the Communication dated 07.12.2022 (Annexure-A) The petitioner is aggrieved by the following conditions in the impugned Communication dated 07.12.2022 (Annexure-A) read as under: 3. As a pre-condition to file your ITR, you may have to register in the Department e-filing portal as a Legal Heir to your deceased wife for the system to enable you to file your ITR. 4. You should produce Legal Heir Certificate/Succession Certificate issued by the competent authority of Karnataka Govt, to prove the legal heirship, as claimed by you. - 4 - WP No. 25325 of 2022 Sri. Girish Kumar R., the learned counsel for the petitioner, submits that the petitioner is the nominee for the Capital Gain Account in No. 530401034673925. When there is nomination, the first respondent cannot insist on Succession Certificate or Legal Heir Certificate to approve closure of Capital Gain Account, and these Certificates can be insisted only when there is no nomination in force as of the date of the demise of the account holder. In this regard, the learned counsel for the petitioner relies upon Rule 13 of Capital Gains Accounts Scheme, 1988 and draws the attention of this Court to 13(2) and 13(3), which reads as under: “2) If a depositor in respect of whose deposit account a nomination is in force, dies, the nominee, if he desires to close the account or accounts and obtain the payment of the balance standing to the credit in the account of the deceased depositor, shall make an application to the deposit office in Form H or as near thereto as possible with the approval of the Assessing Officer who has jurisdiction over the deceased depositor, and the deposit - 5 - WP No. 25325 of 2022 office shall pay the amount of balance, standing to the credit in the account of the deceased depositor including amount of interest accrued, by means of crediting such amount to any bank account of the nominee. 3) If a depositor, in respect of whose deposit no nomination is in force, the legal heir of the deceased depositor shall make an application to the deposit office in Form H or as near thereto as possible, with the approval of the Assessing Officer who has jurisdiction over the deceased depositor, and the deposit office shall pay the balance standing to the credit in the account of the deceased depositor including the amount of interest accrued, by means of crediting such amount to any bank account of the legal heir Provided that where there are more than one legal heirs of the deceased depositor, the legal heir making the claim individually may do so by producing the letter of disclaimer or letter of authorisation from other legal heirs in his favour: Provided further that before granting the approval for closure of the account under this sub-paragraph, the Assessing Officer shall obtain from the legal heir a succession - 6 - WP No. 25325 of 2022 certificate issued under Part V of the Indian Succession Act, 1925, or a probate of the will of the deceased depositor, if any, or letter of administration to the estate of the deceased in case there is no will in order to verify the claim of such legal heir to the account of the deceased depositor.” There cannot be dispute that Smt. Shaikh Sajida had nominated the petitioner inasmuch as it is part of the term deposit receipt dated 15.12.2018 (Annexure-C) and with the applicability being beyond dispute, it would remain indisputable that the petitioner’s request for closure of the account must be considered by the first respondent, upon receipt of a detailed application as mentioned in Annexure-A but without insisting on either Succession Certificate or Legal Heir Certificate. Hence, the petition stands disposed of directing the first respondent to consider the petitioner’s application for closure of the Term Deposit without insisting on either Succession Certificate or Legal - 7 - WP No. 25325 of 2022 Heir Certificate and to facilitate such consideration, the petitioner is reserved with liberty to file a certified copy of this order with the first respondent. Sd/- JUDGE RB "