2013 (11) TMI 1371 - HC - Income Tax

Legal representative of deceased Held that - As per section 2(29) - legal representative is a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued - The order of appeal was passed only after the death of the deceased assessee The executors were appointed under the will of the deceased The order of CIT(A) was set aside for fresh decision.

Summary

Issues:
1. Interpretation of legal representative under the Income Tax Act, 1961.
2. Validity of appeal filed by legal heirs after the death of the assessee.
3. Competency of executors appointed in a will to represent the estate of the deceased.
4. Correct course of action when the assessee dies during the appeal process.

Analysis:
1. The primary issue in this case revolves around the interpretation of the term "legal representative" as defined in the Income Tax Act, 1961. The court examined Section 2(29) of the Act, which refers to the definition provided in clause (11) of Section 2 of the Code of Civil Procedure, 1908. The definition states that a legal representative is a person who represents the estate of a deceased individual, including those who intermeddle with the estate. The court delved into the legal framework to determine the scope and applicability of the term in the context of the case.

2. The court addressed the validity of the appeal filed by the legal heirs after the death of the assessee. It was noted that the original assessment order was made in the name of the deceased individual, and subsequently, an appeal was filed by one of the legal heirs challenging the order. The court considered the implications of the death of the assessee on the maintainability of the appeal and whether the legal heirs had the standing to continue the proceedings on behalf of the deceased.

3. Another crucial aspect examined by the court was the competency of the executors appointed in the deceased's will to represent the estate. The Income Tax Appellate Tribunal had highlighted that the deceased had executed a will appointing specific individuals as executors, and the appellant was not designated as a trustee or a successor to the estate. The court analyzed the provisions of the Income Tax Act and the implications of the will in determining the rightful legal representative for the purpose of the appeal proceedings.

4. Lastly, the court deliberated on the appropriate course of action when an assessee dies during the appeal process. Considering the sequence of events and the legal provisions, the court concluded that the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal needed to be set aside. The matter was remanded to the Commissioner of Income Tax (Appeals) to pass orders in accordance with the law, ensuring that the right person representing the estate of the deceased was identified. The court directed the appellant to take necessary steps to facilitate this process and allowed the executors to pursue the appeal remedy before the Income Tax Appellate Tribunal if deemed necessary.

In conclusion, the judgment provided a comprehensive analysis of the legal concepts surrounding the term "legal representative" in the context of income tax appeals, addressing the intricacies of representation after the death of an assessee and the role of executors in such scenarios. The decision underscored the importance of adhering to legal procedures and ensuring the proper representation of the deceased's estate in tax proceedings.