Meaning of “Declared”

The meaning of declared under section 159 to 179 of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court, Hon’ble ITAT and Hon’ble Supreme Court tried to explain the meaning of declared.

Meaning of declared defined by court

The phrase ‘declared’ used in section 159 to 179 of the Income Tax Act came up before various high courts as detailed under :

1. Hon’ble ITAT-Pune explained the meaning of ‘declared’ while delivering judgment in Sapna Benefit Trust vs. ITO [1988] 24 ITD 249 (Pune – Trib.) as under :

Meaning : The expression ‘declared’ occurring in section 164 connotes making known or accounting. The actual result or final impact is not so material. The statute thus lays greater stress on declarations in the will than on the manner in which the will might be subsequently interpreted or executed.

If the will is ambiguous the assessee may still get the benefit. If, however, the terms of the will are clear, what has happened in terms of the volition of the executors or trustees cannot be equated with what is declared in the will.When the deceased testatrix had made known and announced her intention in no uncertain terms, it did not lie in the mouth of anyone to say that the testatrix deceased did not mean what she said or did not say what she meant.

2. Hon’ble Supreme Court explained the meaning of ‘declared’ while delivering judgment in K.P. Varghese vs. ITO [1981] 131 ITR 597 (SC) as under :

Meaning : The crucial and important words in section 52(2) are ‘the full value of the consideration declared by the assessee’. The word ‘declared’ is very eloquent and revealing. It clearly indicates that the focus of section 52(2) is on the consideration declared or disclosed by the assessee as distinguished from the consideration actually received by him and

it contemplates a case where the consideration received by the assessee in respect of the transfer is not truly declared or disclosed by him but is shown at a different figure. This of course is a very small factor and by itself is of little consequence but along with the other factors, it assumes same significance as throwing light on the true intent of sub-section (2).

3. Hon’ble Karnataka High Court explained the meaning of ‘declared’ while delivering judgment in Sanjiv V. Kudva vs. CIT [1981] 127 ITR 354 (Kar.) as under :

Section : 52

Meaning: The word ‘declared’ used in section 52(2) of the act is significant as it leads to the construction of that provision to the effect that it attracts a case in which it is established that a vendor has declared a lower consideration in the deed transferring his capital asset having received a higher amount as consideration.

Section 159 to 179 of Income Tax Act

Legal representatives.

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.

(3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.

(4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.

(5) The provisions of sub-section (2) of section 161, section 162, and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative.

(6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.

In this article, you can get guidance from Hon’ble High Court, Hon’ble ITAT and Hon’ble Supreme Court on the meaning of declared under section 159 to 179 of the Income Tax Act.

Updated up to Finance Act 2021