1980 (7) TMI 11 - HC - Income Tax

Summary

Issues:
1. Validity of assessment proceedings against a deceased assessee.
2. Interpretation of Section 159 of the Income Tax Act, 1961.

Analysis:
The case involved the assessment proceedings initiated against a deceased assessee. The legal representatives of the deceased filed an appeal before the AAC, which was dismissed. Subsequently, a second appeal was filed before the I.T. Appellate Tribunal, Chandigarh Bench. The Tribunal disposed of the appeal on the preliminary point raised by the legal representatives that the assessment against a deceased person was non est in the eye of the law. The Commissioner sought the Tribunal to refer two questions of law to the High Court, which was rejected by the Tribunal. The High Court analyzed the situation and directed the Tribunal to refer the question of law regarding the validity of annulling the assessment order against a deceased assessee for its opinion.

Regarding the first question, the High Court found the view taken by the Tribunal open to challenge. Section 159 of the Income Tax Act provides the procedure for framing assessments against deceased assessees. The Income Tax Officer (ITO) had served notices on the legal representatives and provided a hearing, but ultimately framed the assessment against the deceased assessee, which was against the provisions of the law. The High Court acknowledged that while it may have been an error or oversight on the part of the ITO, the assessment proceedings might not automatically become non est simply because the order was passed against the deceased assessee. The High Court emphasized that a question of law did arise in these circumstances, leading to the direction for the Tribunal to refer the question to the High Court for its opinion.

The High Court agreed with the decision regarding the second question, noting that the Tribunal had not discussed any argument based on Section 159 of the Act in its judgment. As a point not raised before the Tribunal, it was deemed not to have arisen out of the Tribunal's order. The High Court highlighted the importance of raising relevant legal points before the Tribunal for them to be considered in the judgment. The Court concluded by allowing the petition, directing the Tribunal to refer the question of law regarding the validity of annulling the assessment against a deceased assessee to the High Court.