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Issues involved: Interpretation of u/s 256(1) of the Income-tax Act, 1961 regarding the validity of assessment post death of assessee without notice to legal representatives.
Summary: The case involved the question of whether the assessment after the death of the assessee, without issuing notices to his legal representatives, was liable to be annulled. The assessee, Shri H. R. Mehta, had filed returns and revised returns for certain assessment years but passed away before the assessments were completed. The assessments were finalized without the Income-tax Officer being informed of the death of the assessee. One of the legal representatives of the deceased assessee contended that the assessments should have been annulled, arguing that proper notice should have been given to the legal representatives. However, the Tribunal upheld the assessments, stating that proceedings could continue against the legal representative from the stage at which they stood at the time of the assessee's death, as per u/s 159 of the Act. The Tribunal's decision was based on the provision that assessments should be continued against the legal representative, who is deemed to be an assessee and is liable to pay the tax owed by the deceased assessee. The High Court agreed with the Tribunal's decision, emphasizing that u/s 159 of the Act does not provide for annulment of assessments post the death of the assessee. Instead, it mandates the continuation of assessments against the legal representative. Therefore, the Court upheld the Tribunal's decision in favor of the revenue, stating that the assessments were rightly set aside by the Appellate Assistant Commissioner and should be continued against the legal representative. The judgment was delivered by Judges Dipak Kumar Sen and S. C. Deb.
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