Who’s accountable if  executor doesn’t file returns of deceased?

The testatrix died after leaving behind a Will wherein she appointed an executor (a chartered accountant by profession) who was entrusted to dispose off all assets among 11 beneficiaries subsequent to the grant of probate. The probate is at present stuck in courts due to certain legal disputes by third parties who claim to have interest in one asset of the deceased. However, let me make it clear here that the Will as such has not been challenged by anyone. The executor has not filed the income tax returns of the deceased during the past 4 years nor has he surrendered the PAN card of the deceased. Kindly advise whether in such a case beneficiaries can be held accountable by the I-T department for non-filing of returns of the deceased.

—Name withheld on request

We understand that though there are disputes that are pending in respect of one asset of the deceased, the Will has not been challenged in the court of law. Under the applicable income tax provisions, the estate of the deceased is chargeable to tax. You have informed us that the deceased has died leaving behind a Will and there is a named executor in the Will.

In such circumstance, the estate of the deceased person shall be chargeable to tax in the hands of the executor under Section 168 of the Income Tax Act, 1961. The executor shall be assessed separately in respect of the income of the estate the deceased i.e. separate from his/her personal income.

Any failure in filing of returns by the executor of the deceased would attract penalty under relevant provisions of the Income Tax Act, 1961, which the executor may be aware of considering that he is a chartered accountant by profession.

Aradhana Bhansali is partner, Rajani Associates.