Judgment 1. In this case the assessment related to the assessment year 1956-57, the accounting year being the financial year 1955-56. Maharani Janki Kuer was the last holder of the Bettiah Estate. It was under the management of the Court of Wards in her lifetime, and after her death the Court of Wards continued to manage the estate under Sec.13 of the Court of Wards Act (Bengal Act 9 of 1879). Manarani Janki Kuer died on the 27th November, 1951. For the financial year 1955-56 the Income-tax Officer made an assessment upon Manager of the Court of Wards Estate. It was claimed on behalf of the Government before the Income-tax Department that Maharani Janki Kuer died without leaving any legal heir and, therefore, the whole estate vested in the State Government by escheat tinder Article 296 of the Constitution. This claim was not either accepted or refected by the income-tax authorities, but the assessment was made on the Manager, Court of Wards, on the basis that one Suresh Nandan Sinha had filed a suit claiming the estate, alleging himself to be the nearest heir of the deceased Maharani Sahiba, and the question of heirship was sub-judice. The assessment was confirmed by the Appellate Assistant Commissioner on appeal by the income-tax Appellate Tribunal on further appeal. 2. On the question of escheat the Appellate Assistant Commissioner has stated as follows in the course of his order:- - "The first objection raised in this appeal is that the assessment made in this case is illegal since after the deatn of late Maharani Sahiba of Bettiah, the entire estate escheated to the State of Bihar and that in no view or the case the tax could be charged at the maximum fate under sec. 41 proviso 1. The Bettiah estate is under the Court of Wards since 1897 and the Court of Wards has net ceased to exist on the death of late Manarani Sahiba of Bettiah on 27-11-1954. The appellants representative argues that though the Court of Wards has not ceased to exist the benef clary has changed inasmuch as whereas formerly the Maharani was the beneficiary, after her death the State of Bihar is the sole beneficiary. The appellants representative has not produced before me in this respect any orders or notification issued by the Government of Bihar taking over themselves the Bettiah estate. The appellants representative has not produced before me in this respect any orders or notification issued by the Government of Bihar taking over themselves the Bettiah estate. On the contrary the Bettiah estate has been claimed by one Suresh Nandan Sinha of Sheohar (Muzaffarpur) as the heir to the late Maharani Sahiba of Bettiah in Title Suit No. 44 of 1955 filed in the court of the Additional Sub Judge 5, Patna and the suit is still undecided. The question regarding the legal heir to the estate is, therefore, not yet settled. The Income-tax Officer was therefore, in my opinion, right in assessing the Manager, Court of Wards, on the income of the State arising in the year of account ended 31-3-1956, corresponding to the present assessment." The same view has been held by the Appellate Tribunal which stated as follows:-- "The first and the foremost objection is that the assessment itself is illegal. It was argued that the Bettiah estate on the death of Manarani Sahiba devolved upon the State by escheat, and, therefore, its income was exempt from assessment. The estate has been under the management of the assessee since a long time even curing the lifetime of the Maharani sahiba. There was no notification on the death of Maharani Sahiba on 27-11-54 or later that the estate vested in the State by escneat. The question of heirship to the Estate is now the subject-matter of a pending litigation started by one Suresh Nandan Sinha, claiming the estate as a nearest heir of late Manarani Sahiba. Therefore it is too early to say that the estate escheated to the Government. The Appellate Assistant Commissioner was therefore correct in confirming the assessment on the assessee as in early years. It was further argued that when the suit will be decided the heir, whosoever he may be, will be only one person and, therefore, the beneficiary was determinate and hence the income could not be assessed under Sec. 41 (1). mere is no certainty as to who will be future heir or as to How many heirs will be found to the late Maharani Sahiba. The heirs are, therefore, indeterminate. The assessment under section 41 (1) was therefore proper." Under Sec. 66(1) of the Income-tax Act the Income-tax Appellate Tribunal has stated a case to the High Court on the* following questions of law:- - "1. The heirs are, therefore, indeterminate. The assessment under section 41 (1) was therefore proper." Under Sec. 66(1) of the Income-tax Act the Income-tax Appellate Tribunal has stated a case to the High Court on the* following questions of law:- - "1. Whether on the facts and circumstances of me case could assessment be made upon the Manager or Court of Wards, Bettiah Estate, in respect of the income from the Bettiah Estate? 2. If the assessment could be made on the Manager of the Court of Wards in respect of the income from the Bettiah Estate, was it chargeable to tax at maximum rates under Sec. 41 (1) of the Income-tax Act? 3. On behalf of the Manager, Court of Wards Estate, It was submitted by the learned Government Advocate that the assessment is illegal since the Appellate Tribunal has not examined the claim of the Manager of the Court of Wards that the entire estate has escheated to the State 01 Bihar under Article 296 of the Constitution, and, thererore, the income is not chargeable to income-tax under Article 289 of the Constitution which states:- - "289. (1) The property and income of a State shall be exempt from Union taxation. (2) Nothing in Clause (I) shall prevent the Union from Imposing, or authorising the imposition of, any tax to such extent, if any, as Parliament may by law provide in respect of a trade or business of any kind carried on by or on Behalf of, the Government of a State, or any operations connected therewith, or any property used or occupied for the purposes of such trade or business, or any income accruing of arising in connection therewitn. xx xx xx xx xx xx xx" The provision with regard to escheat of property to the Estate is contained in Article 296 of the Constitution whichi states:- - 296. xx xx xx xx xx xx xx" The provision with regard to escheat of property to the Estate is contained in Article 296 of the Constitution whichi states:- - 296. Subject as hereinafter provided any property in the territory of India which if this Constitution had not come Into operation, would nave accrued to his Majesty or, as the case may be, to the Ruler of an Indian state by escheat or lapse, or as bona vacantia for want of a rightful owner, shall if it is property situate in a State, vest in such state, and shall, in any other case, vest in the Union: Provided that any property which at the date when it would have so accrued to His Majesty or to the Ruler of an Indian State was in the possession or under the control of the Government of India or the Govern-ment of a State shall, according as the purposes tor which it was then used or held were purposes of the Union or of a State, vest in the Union or in that State. Explanation -- In this article, the expressions Ruler and Indian State nave the same meanings as In Article 363." On behalf of the income-tax Department learned standing counsel conceded that this contention is correct and that the Income-tax authorities cannot validly impose income-tax unless they decide the claim of escheat made by the State of Bihar under Article 296 of the Constitution. in the circumstances of the- present case it is manifest that the Income-tax authorities cannot validly impose a tax upon the Manager, Court of Wards, Bettiah Estate, merely because a title suit has been filed with regard to the heirship of the Bettiah Estate without deciding the question as to whether the claim of the State of Bihar that the property has vested in it by escheat is established or not. For these reasons we hold that in the facts and circumstances of this case the assessment made upon the Manager, Court of Wards, Bettiah Estate in respect or the income of the Bettiah Estate for the assessment year In question is illegal and the first question referred to the High Court by the Income tax Appellate Tribunal must be answered in favour of the assesses and against the income tax Department. 4 It was conceded by learned counsel for both the parties that the second question referred to the High Court by the Income-tax Appellate Tribunal has become academic and it is not necessary to answer the second question referred to the High Court. 5. It will be open to the income-tax authorities either to decide the question of escheat for themselves upon the materials available or to await the decision of the title suit pending before the court of the Subordinate Judge, and thereafter proceed to make an assessment in accordance with law. There will be no order as to costs with regara to this reference.