1970 (2) TMI 43 - HC - Income Tax

Issue of reassessment notice u/s 34(1)(b) to widow and not to minor son - objections to the assessment proceedings

Summary

Issues:
1. Validity of notice served under section 34 to legal representatives of deceased assessee.
2. Justification of Tribunal's decision in allowing the appeal without determining the legality of notice service.
3. Legality of notice service on a specific individual.

Issue 1: Validity of notice served under section 34 to legal representatives of deceased assessee:
The case involved a reference under section 66(2) of the Indian Income-tax Act, 1922 concerning the assessment of income tax for two years of a deceased individual, Shewaram D. Bhatia. The widow, son, and daughter of the deceased were the legal heirs. The primary contention was whether the notice served on one legal representative was valid under section 24B(2). The Tribunal held that the notice served was valid, considering the widow as the guardian of the minors, and the assessment proceedings were binding on all legal representatives. The court analyzed legal precedents emphasizing the need to address and serve notices on all legal representatives for complete representation of the estate. However, it was concluded that in this case, addressing and serving the notice on the widow alone was considered substantial compliance with the legal requirements, as there was no conflict of interest and the interests of all legal representatives were aligned. Therefore, the court answered this question in the negative.

Issue 2: Justification of Tribunal's decision in allowing the appeal without determining the legality of notice service:
The Tribunal's decision to allow the appeal without determining the legality of notice service raised a question regarding the justification of such an action. The court addressed this concern by acknowledging that the notice served on one legal representative was considered valid, and the appeal process was deemed justified based on this premise. The legal counsel for the assessee did not press the point regarding the legality of notice service, leading to a conclusion that the appeal decision was supported by the valid notice service. Consequently, questions 2 and 3 were answered in the affirmative, affirming the Tribunal's decision in allowing the appeal.

Issue 3: Legality of notice service on a specific individual:
The case delved into the legality of serving the notice on a specific individual, Parmeshwaribai, as the legal representative of the deceased. The court examined the requirement to address and serve notices on all legal representatives for completeness in representation. Despite acknowledging this principle, the court accepted the argument that serving the notice on the widow alone, who was also the guardian of the minors, was substantial compliance with legal provisions. The court cited a relevant judgment to support this stance, emphasizing that in cases where the guardian is also a legal representative, serving the notice on the guardian alone can be considered compliant. The court concluded that in the circumstances of this case, the notice served on Parmeshwaribai alone was legally sufficient, as there was no conflict of interest and the interests of all legal representatives were aligned. Therefore, the court answered question 1 in the negative, affirming the legality of the notice service on a specific individual.

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