1995 (2) TMI 129 - AT - Income Tax

Assessing Officer Assessment Proceedings Financial Year Legal Representative Limitation For Reassessment Time Limit For Completion

Summary

Issues Involved:
1. Validity of notice under section 148 as per section 149.
2. Limitation period for assessment as per section 153(2).
3. Jurisdiction of ITO, Ward-D, Jodhpur to issue notice under section 148.
4. Legality of assessment issued to only one of the three legal representatives (LRs) of the deceased assessee.

Detailed Analysis:

1. Validity of Notice under Section 148 as per Section 149:
The notice under section 148 was issued based on the ITO's belief that income chargeable to tax had escaped assessment due to the deceased assessee's failure to file a return for the assessment year 1975-76. Section 149(1)(a)(i) prescribes that such notice must be issued within eight years from the end of the relevant assessment year. The relevant assessment year ended on 31-3-1976, making the last permissible date for issuing the notice 31-3-1984. The ITO issued two notices on 27-3-1984, one served by affixture on 30-3-1984 and the other by registered post on 3-4-1984. The Tribunal held that the notice served on 30-3-1984 was valid and within the prescribed period, thus meeting the requirements of section 149.

2. Limitation Period for Assessment as per Section 153(2):
Section 153(2) mandates that the assessment under section 147(a) must be completed within four years from the end of the assessment year in which the notice under section 148 was served. Since the notice was served on 30-3-1984, the assessment should have been completed by 31-3-1988. However, the assessment was made on 30-3-1989, which was beyond the prescribed period, rendering it invalid as per section 153(2).

3. Jurisdiction of ITO, Ward-D, Jodhpur to Issue Notice under Section 148:
The issue of jurisdiction was raised but not decided by the DC(Appeals). The Tribunal noted that the jurisdiction might have changed over time and decided against the assessee without delving into the specifics.

4. Legality of Assessment Issued to Only One of the Three Legal Representatives (LRs) of the Deceased Assessee:
The deceased assessee had three sons as LRs. The ITO issued notice under section 148 only to one LR, Shri Bhanwar Lal, and did not issue notices under section 142(1) to the other two LRs, Shri Ganpat Ram and Shri Madho Singh. The Tribunal emphasized that the estate of the deceased must be properly represented by all LRs for a valid assessment. Since the ITO was aware of the other LRs but failed to issue notices to them, the assessment was procedurally flawed. The Tribunal cited relevant case law to support this conclusion and held that the assessment would have been invalid even if it were not barred by the limitation period under section 153(2).

Conclusion:
The Tribunal dismissed the appeal, sustaining the order of cancellation of assessment on the grounds of limitation and improper issuance of notices to all LRs. The assessment was held to be invalid both due to being time-barred and for failing to involve all legal representatives of the deceased assessee.