COMMISSIONER OF INCOME-TAX VS KUMARI PRABHAWATI GUPTA
1991 P T D 191
[Madhya Pradesh High Court (India)]
Before G.G Sohani Actg. C.J. and K.M. Agrawal, J
COMMISSIONER OF INCOME-TAX
versus
KUMARI PRABHAWATI GUPTA and others
Miscellaneous Civil Case No. 124 of 1982, decided on 23/02/1989.
Income-tax---
----Reference---Assessment---Return filed by assessee---Death of assessee before completion or assessment ---AA.C. setting aside assessment and directing fresh assessment---Assessment order whether void ab initio and Tribunal whether justified in setting aside order of A.A.C. and in not directing fresh assessment are questions of law fit to be referred.
The assessee filed a return of his income but before the completion of the assessment, he died. The Appellate Assistant Commissioner set aside the order of assessment and directed the Income-tax Officer to make a fresh assessment after giving sufficient opportunity to the legal representatives of the deceased to be heard. The legal representatives of the deceased-assessee preferred a second appeal. The Tribunal allowed the appeal and set aside the order of the Appellate Assistant Commissioner. On a reference application under section 256(2) of the Indian Income-tax Act, 1961:
Held, that the questions whether the Tribunal was justified in holding that the order passed by the Income-tax Officer was void ab initio and whether the Tribunal was justified in setting aside the order passed by the Appellate Assistant Commissioner and in not directing the Income-tax Officer to frame the assessment afresh, were questions of law fit to be referred.
B.K. Rawat for the Commissioner.
B.L. Nema for the Assessee.
JUDGMENT
G.G. SOHANI, ACTG. C.J.--By this application under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Revenue has prayed that the Income-tax Appellate Tribunal be directed to refer the following questions of law to this Court for its opinion:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessment order passed by the Income-tax Officer was ab initio void for his omission to include the legal heirs of the deceased in the assessment order?
(2) Whether the Appellate Tribunal was right in setting aside the order of the Appellate Assistant Commissioner and in not passing a further order directing the Income-tax Officer to proceed with the assessment against the legal representatives of the assessee?"
The material facts giving rise to this application, briefly, are as follows: The deceased, Shri S.C. Gupta, had filed his return of income for the assessment year 1970-71. Before the completion of the assessment proceedings, the assessee died. Aggrieved by the order of assessment passed by the Income-tax Officer the legal representatives of the assessee preferred an appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner set aside the order of assessment and directed that assessment be framed de novo after giving sufficient opportunity to the legal representatives of the deceased for stating their case. The legal representatives of the deceased-assessee thereupon preferred a second appeal before the Tribunal. The Tribunal allowed that appeal and set aside the order passed by the Appellate Assistant Commissioner. Aggrieved by the order passed by the Tribunal, the Revenue sought reference, but as the application made by the Revenue in that behalf was rejected, the Revenue has filed this application.
Having heard learned counsel for the parties, we have come to the conclusion that the following questions of law do arise out of the order passed by the Tribunal:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the order passed by the Income-tax Officer was void ab initio?
(2) Whether, on the fats and in the circumstances of the case, the Tribunal was justified in setting aside the order passed by the Appellate Assistant Commissioner and in not directing the Income-tax Officer to frame assessment afresh in accordance with law?"
Consequently, this application is allowed. The Income-tax Appellate Tribunal is directed to state the case and to refer the aforesaid questions of law to this Court for its opinion. In the circumstances of the case, the parties shall bear their own costs of this application.
Z.S./763/TOrder accordingly.