2010 (8) TMI 505 - HC - Income Tax

Appeal Death of assessee No abetment of appeal - Code of Civil Procedure, 1908 section 159 (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased

Issues Involved:
1. Application of Order XXII, rule 4 of the Civil Procedure Code.
2. Condonation of delay in filing the legal representatives (LR) application.
3. Applicability of section 159 of the Income-tax Act.
4. Whether an appeal under section 260A of the Act abates upon the death of the assessee.
5. Interpretation of procedural laws in the context of the Income-tax Act.

Issue-wise Detailed Analysis:

1. Application of Order XXII, rule 4 of the Civil Procedure Code:
The Revenue filed an application under Order XXII, rule 4 of the Civil Procedure Code to bring the legal representatives of the deceased respondent on record. The respondent-assessee had expired during the pendency of the appeal, and the Revenue sought to continue the proceedings by including the legal representatives. The respondent's counsel argued that this application was necessary and should have been filed within the prescribed time, invoking the provisions of the Civil Procedure Code.

2. Condonation of delay in filing the legal representatives (LR) application:
There was a significant delay of 523 days in filing the LR application, which the Revenue sought to condone. The respondent's counsel objected, arguing that the Revenue had knowledge of the death of the assessee much earlier and failed to act promptly. The court, however, found sufficient cause for condoning the delay, noting that the Revenue was not aware of the death of the assessee as contended by the legal representatives.

3. Applicability of section 159 of the Income-tax Act:
The Revenue contended that under section 159 of the Income-tax Act, the legal representatives are deemed to be parties to the appeal upon the death of the assessee, making the applications for bringing them on record and condoning the delay superfluous. The court clarified that section 159 applies to assessment proceedings and enables the Revenue to collect tax but does not override the procedural requirements under section 260A.

4. Whether an appeal under section 260A of the Act abates upon the death of the assessee:
The central issue was whether an appeal under section 260A abates upon the death of the assessee. The court examined the provisions of section 159 and section 260A, concluding that the concept of abatement is excluded in tax proceedings. The court emphasized that the liability to pay tax does not extinguish upon death and that proceedings can continue against the legal representatives. The court noted that the procedural law under the Civil Procedure Code, specifically Order 22, rule 11, does not apply to appeals under section 260A.

5. Interpretation of procedural laws in the context of the Income-tax Act:
The court highlighted that the procedural laws under the Civil Procedure Code are not fully applicable to tax proceedings unless expressly stated. The court referred to previous judgments and legislative intent, emphasizing that the concept of abatement is alien to fiscal law. The court concluded that the appeal does not abate upon the death of the assessee and that the legal representatives must be brought on record to continue the proceedings.

Conclusion:
The court allowed the applications filed by the Revenue for condoning the delay, setting aside the abatement, and bringing the legal representatives of the deceased assessee on record. The court directed the Revenue to amend the cause title accordingly and listed the matter for hearing on the merits.

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