Income-tax---

----Legal representative---Assessment proceedings---Death of assessee-- Proceedings can continue against legal representatives---Assessment without notice to legal representatives---Not a nullity or invalid ---A.C.C. setting aside assessment and directing I.T.O. to make fresh assessment after making legal representatives party and issuing notice---Direction valid and legal---Indian Income Tax Act, 1961, Ss.143(2), 159(2), 251.

Pending assessment proceedings against him, the assessee died. The Income Tax Officer thereafter served a notice under section 143(2) of the Income Tax Act, 1961, on the advocate the assessee and completed the assessment. On appeal by some of the legal representatives of the assessee, the Appellate Assistant Commissioner held that in spite of the death of the assessee, the proceedings could be continued against the legal representatives and, therefore, they were not invalid or a nullity, but that it was necessary to issue notice to them and setting aside the order of the Income Tax Officer directed him to make a fresh assessment after making the legal representatives party to the proceedings from the stage at which they stood when the assessee died. The Appellate Tribunal affirmed the order of the Appellate Assistant Commissioner. On a writ petition by a legal representative:

Held, that, in view of section 159(2) of the Act relating to liabilities of the legal representatives and section 2,51 enabling the Appellate Assistant Commissioner to remand a matter to the assessing authority to make a fresh assessment in accordance with law, there was no scope for interference in exercise of the extraordinary writ jurisdiction of the High Court. The Income Tax Officer was justified in continuing the proceedings but had committed only an error of procedure in not issuing notice to the legal representatives regarding further proceedings to be continued and, therefore, the Appellate Assistant Commissioner and the Tribunal 'were right in coming to the conclusion that there was a procedural defect and not absence of jurisdiction and in remanding the matter to the Income Tax Officer for proceeding afresh from the stage at which the proceedings stood on the date of death of the deceased after issuing notice to the legal representatives.

Estate of Late Rangalal Jajodia v. CIT (1971) 79 ITR 505 (SC) rel.

Anoop Sharma for Petitioner.

B. Gupta and R.N. Verma for Respondent.

JUDGMENT

GOKAL CHAND MITTAL, C.J. ---In April 1963, the concerned Income Tax Officer issued notice to Mr. Basheshar Nath, the assessee, under section 139(2) of the Income Tax Act, 1961, in respect of the assessment year 1963-64. On October 20, 1963, Basheshar Nath submitted his return of income in response to the said notice. While the proceedings were still pending in December 1965, Basheshar Nath died leaving behind his widow and three sons. The matter was being conducted by Messrs A.S. Bhatia and Co., the chartered accountants concerned. The Income Tax Officer gave an intimation to him about Basheshar Nath' s case, in reply to which the Income Tax Officer was informed that the assessee had died on December 10, 1965, and the family was in mourning and that some time should be granted. Despite this information, the Income Tax Officer continued the proceedings and issued notice under section 143(2) in the name of Basheshar Nath, which was served on Mr. Shinghari, Advocate. The assessment was completed on March 22, 1968, determining the total income at Rs.3,99,819.

Some of the legal representatives of Basheshar Nath filed an appeal before the Appellate Assistant Commissioner and challenged the assessment as being null and void, being against a dead man. The Appellate Assistant Commissioner came to the conclusion that in spite of the death of the assessee, the proceedings could be continued against the legal representatives and, therefore, were not invalid or a nullity but held that it was necessary to issue notice to the legal representatives and accordingly, vide order, dated January 31,1970, set aside the assessment and directed the Income Tax Officer to make fresh assessment in accordance with law, after making the legal representatives party to the proceedings from the stage they were when Basheshar Nath died.

The legal representatives who had gone up in appeal before the Appellate Assistant Commissioner filed further appeal before the Income Tax Appellate Tribunal, Delhi Bench A, and the appeal was dismissed on March 29,1972, upholding the order of the Appellate Assistant Commissioner.

The legal representatives sought reference of the law point involved in this case for the opinion of this Court and the matter was referred to this Court and was registered as Income Tax Reference No.15 of 1974. It appears that those legal representatives, who sought reference, did not pursue the reference and ultimately, by order, dated February 25, 1981, the reference was returned unanswered.

While reference was being sought, one of the four legal representatives, namely, Vijay Sarin, filed this writ petition challenging the order of assessment and the orders passed by the Appellate Assistant Commissioner and the Tribunal on identical grounds, namely, that the order of the Income Tax Officer was a nullity and that the proceedings could not be continued against the legal representatives of Basheshar Nath from the stage they were when he died. The writ petition is opposed by tae Income Tax Department. .

On a consideration of the matter, we are of the view that, in view of the provisions of section 159(2), relating to liabilities in such cases of the legal representatives, section 251, relating to the powers of the Appellate Assistant Commissioner, including the power to refer back to the assessing authority for making a fresh assessment in accordance with law and the decision of the Supreme Court in Estate of Late Rangalal Jajodia v. CIT (1971) 79 ITR 505, there is no scope for interference in the exercise of the extraordinary writ jurisdiction of this Court.

Apart from the fact that some other legal representatives failed in scuttling the proceedings by issuing fresh notice to the legal representatives from the stage when Basheshar Nath, the assessee, died, up to the Tribunal and then in not pursuing the reference made to. this Court in view of section 159(2) of the Act, the Income Tax Officer was justified in continuing the proceedings against the legal representatives of the deceased. Section 159(2)(a) clearly provides that 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 death of the deceased. The Income Tax Officer committed an error of procedure in not issuing notice to the legal representatives regarding further proceedings to be continued and, therefore the Appellate Assistant Commissioner and the Tribunal were right in coming to the conclusion that there is a procedural defect and not absence of jurisdiction and were right in remanding the matter to the Income Tax Officer for proceeding afresh from the stage at which the proceedings stood on the date of death of the deceased by issuing notice to the legal representatives.

It was also urged before us that the Appellate Assistant Commissioner, after setting aside the order of the Income Tax Officer, had no power to remand the matter to him for continuing the proceedings from the date of death of the assessee and in making a fresh order. This argument is also against the wording of section 251 of the Act. Section 251(1)(a) clearly provides that the Commissioner (Appeals) shall have the power to set aside an assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by him. Accordingly, this contention is also repelled.

The following observations made in Rangalal Jajodia' s case (1971) 79 ITR 505 (SC) are of great help in deciding this case (at page 511):

"What happened in the present assessment proceedings was that the proceedings were commenced during the lifetime of Rangalal Jajodia by reason of the returns being filed by and notices under sections 22(3) and 23(2) of the Act having been served on Rangalal Jajodia during his lifetime. The assessment order contains intrinsic evidence to that effect as also of repeated intimation having been given to Shankarlal Jajodia after the death of Rangalal Jajodia. No reply having been received from Shankarlal Jajodia, the assessment was completed under section 24-B of the Act through the legal heirs and representatives including Aruna Devi. The Appellate Assistant Commissioner on an appeal preferred by Shankarlal Jajodia set aside the assessment because no notice was given to Aruna Devi though the assessment proceeding was against her as a legal representative. The lack of a notice does not amount to the Revenue authority having had no jurisdiction to assess, but that the assessment was defective by reason of notice not having been given to her. An assessment proceeding does not cease to be a proceeding under the Act merely by reason of want of notice. It will be a proceeding liable to be challenged and corrected. Similarly, if there is a mistake as to name or there is a misdescription of the name, the proceeding will be liable to be challenged and corrected by giving notice to the assessee subject to such just exceptions as an assessee can take under law. The direction given by the appellate Assistant Commissioner was to make fresh assessment on, Aruna Devi in accordance with the provisions of the Act."

A reading of the aforesaid quotation clearly shows that lack of notice to the legal representatives does not amount to the Revenue authority having no jurisdiction, but the assessment was defective by reason of want of notice. It was also observed that an assessment proceeding does not cease to be a proceeding under the Act merely by reason of want of notice. Accordingly, we do not find the least ground to interfere in writ jurisdiction and the writ petition is dismissed with costs. Counsel's fee Rs.500.

M.BA./20/T.F. Order accordingly.