2024 (3) TMI 214 - HC - Income Tax

Liability of legal representative (LR) of deceased - validity of assessment order passed u/s 147 against only one LR - main contention of the petitioner was that even though she is the adopted daughter of the deceased and there are two other legal heirs apart from the petitioner, the impugned Assessment order was issued in the name of the petitioner alone, that too without issuing any show cause notice and without affording an opportunity of personal hearing HELD THAT - Show cause notice was not issued to the petitioner and no opportunity of personal hearing was offered to the petitioner before the impugned Assessment Order came to be passed in the name of the petitioner as the legal heir of the deceased assessee. Hence, the impugned Assessment Order is liable to be quashed on this ground itself. Further, it is to be noted that on 27.05.2023, the respondent had issued show cause notice to all the legal heirs of the deceased Yelchur Ranganathan. Learned counsel for the petitioner fairly submits that Ms.R.Lakshmi Priya and Mr.R.Suriya Prakash are the other legal heirs of the deceased Yelchur Ranganathan. This Court is inclined to quash the impugned Assessment Order and the respondent shall continue the proceedings subsequent to the issuance of show cause notice issued in the name of all the legal heirs viz., the petitioner herein (Smt.Sandhya Sailesh), Ms.R.Lakshmi Priya and Mr.R.Suriya Prakash and proper communication is directed to be sent to all the legal heirs and necessary opportunity of hearing shall also be given before passing the Assessment Order.

Summary

Issues involved:
The main challenge is the assessment order passed in the name of the petitioner as the legal representative of the deceased assessee without issuing any show cause notice or affording an opportunity of personal hearing.

Summary:

Issue 1: Impugned Assessment Order in the Name of Petitioner
The petitioner challenged the assessment order issued in her name as the legal representative of the deceased assessee without proper notice or hearing. The respondent argued that they can proceed against legal heirs as per Section 159 of the Income Tax Act, 1961. The court noted that while the law holds legal representatives liable for the deceased's tax obligations, in this case, the assessment order was issued without notice or hearing to the petitioner. The court directed the quashing of the impugned Assessment Order and ordered proceedings to continue after issuing a show cause notice to all legal heirs for proper hearing.

Conclusion:
The High Court of Madras, in the case challenging the assessment order passed in the name of the petitioner as the legal representative of the deceased assessee, quashed the order and directed the respondent to proceed after issuing proper notice to all legal heirs for a fair hearing.