1999 (4) TMI 27 - HC - Income Tax

Summary

Issues Involved:
1. Justification of the Tribunal in quashing the assessments for the assessment years 1971-72, 1973-74, 1975-76, and 1976-77.
2. Validity of the proceedings initiated under section 148 of the Income-tax Act, 1961.
3. Representation of the estate of the deceased, Sri G. P. Verma, in the assessment proceedings.

Detailed Analysis:

1. Justification of the Tribunal in Quashing the Assessments:
The Tribunal quashed the assessments for the years 1971-72, 1973-74, 1975-76, and 1976-77 on the grounds that the initiation of proceedings under section 148 was wrong. The Tribunal accepted the preliminary objection that the proceedings were invalid due to the non-substitution of all legal heirs of the deceased, Sri G. P. Verma. However, the High Court found that no objections were raised by the legal heirs during the assessment proceedings, and Sri Chandra Mohan Verma, one of the heirs, participated fully, thus representing the estate effectively. Therefore, the High Court held that the Tribunal erred in quashing the assessments.

2. Validity of the Proceedings Initiated under Section 148:
The High Court examined the validity of the notices issued under section 148 and subsequent proceedings. It was noted that the assessee, through Sri Chandra Mohan Verma, responded to the notices and participated in the assessment process. The High Court referenced section 159 of the Act, which allows legal representatives to be liable for the deceased's tax liabilities and to be treated as deemed assessees. The High Court concluded that the proceedings were valid as the estate was sufficiently represented by Sri Chandra Mohan Verma.

3. Representation of the Estate of the Deceased in the Assessment Proceedings:
The High Court relied on several precedents, including the Supreme Court's rulings in Daya Ram v. Shyam Sundari and N. Jayaram Reddi v. Revenue Divisional Officer, to determine that the estate of the deceased can be sufficiently represented by one legal heir if no objections are raised by other heirs. The High Court found that Sri Chandra Mohan Verma represented the estate effectively, and the other heirs did not object to the proceedings. Thus, the assessments were not a nullity and were validly conducted.

Conclusion:
The High Court answered the referred question of law in the negative, holding that the Tribunal was not justified in quashing the assessments. The estate of the late Sri G. P. Verma was sufficiently represented by Sri Chandra Mohan Verma, and the assessments were validly made. The High Court's decision was in favor of the Department and against the assessee. No orders as to costs were made since no one appeared on behalf of the assessee.