2002 (2) TMI 37 - HC - Wealth-tax

Whether the assessment is vitiated by non-service of notice on all the legal representatives of the deceased? - we must say, the karta of the Hindu undivided family was undoubtedly represented by Sri Srinivasa Rao who is one of the legal heirs of the karta of Hindu undivided family. He participated in the proceedings before the assessing authority and later filed appeal before the Appellate Assistant Commissioner which was partly allowed. Thereafter, the matter was carried before the Tribunal and at that stage, the said Srinivasa Rao raised the additional ground by contending that the other legal representatives of the karta of the Hindu undivided family were not served with notices. - we declare that the assessment is not vitiated by non-service of notice on all the legal representatives of the deceased.

Summary

Issues:
Assessment vitiated by non-service of notice on all legal representatives of deceased.

Analysis:
The judgment pertains to two references made by the Income-tax Appellate Tribunal regarding the assessment proceedings of a deceased individual, focusing on the question of whether the assessment is invalidated due to non-service of notice on all legal representatives. The deceased individual, a wealth-tax assessee, left behind legal heirs including a widow, sons, daughters, and a mother, with a will specifying the distribution of his property. Notices were served on the widow for certain assessment years, and on one of the sons for reassessment, but not on all legal representatives after the widow's demise during the proceedings. The issue arose when the karta of a Hindu undivided family, who was also deceased, had one legal heir served notice but later raised objections about the lack of notice to all legal representatives.

The Appellate Assistant Commissioner partially allowed the appeal, leading to the matter being brought before the Income-tax Appellate Tribunal. The Tribunal concluded that the legal heir who participated in the proceedings failed to inform the assessing authority about other legal representatives, thus precluding the challenge to the assessment based on non-service of notices. The Tribunal's decision was influenced by the principle that defects in notice service do not nullify tax liability if substantive provisions creating the liability are intact. Citing precedents, the Tribunal emphasized that participation in proceedings without objection to notice defects estops subsequent challenges to the assessment's validity.

In light of the legal principles and the specific circumstances of the case, the High Court upheld the Tribunal's decision, ruling that the assessment was not invalidated by the non-service of notice on all legal representatives of the deceased. The Court highlighted the active participation of one legal heir in the proceedings and the lack of objection to the assessment process, affirming the validity of the assessment despite notice deficiencies. The judgment favored the Revenue, emphasizing the importance of substantive tax liability over procedural notice irregularities, ultimately dismissing the assessee's challenge based on non-service of notices to all legal representatives.