1973 (3) TMI 30 - HC - Income Tax

Kerala Agricultural Income Tax Act, 1950 - whether an assessment of the income of a deceased person made without issuing notice to all his legal representatives is wholly bad under law, or whether it is good at least in respect of those legal representatives to whom all the notices have been duly issued

Summary

Issues Involved:
1. Validity of assessment made without issuing notice to all legal representatives of a deceased person.
2. Representation of the estate of a deceased person in assessment proceedings.
3. Legal implications of assessments made in good faith but without notice to all legal representatives.

Issue-wise Detailed Analysis:

1. Validity of Assessment Made Without Issuing Notice to All Legal Representatives:
The central question was whether an assessment of the income of a deceased person made without issuing notice to all his legal representatives is wholly invalid or valid concerning those legal representatives who received the notice. The court examined Section 24 of the Agricultural Income-tax Act, 1950, which parallels provisions in the Income-tax Act, 1961. The law mandates that the assessment be made on the legal representative as if the deceased were alive, and the legal representative is liable to pay the tax from the deceased's estate.

2. Representation of the Estate of a Deceased Person in Assessment Proceedings:
The court discussed the necessity for all legal representatives to be issued notices to make the representation of the estate complete. It referenced the Supreme Court's decision in First Additional Income-tax Officer v. Mrs. Suseela Sadanandan, which emphasized that if there are multiple legal representatives, all must be impleaded. The court highlighted that the estate of a deceased person can be represented only by all legal representatives jointly if it vests in them jointly. However, if the estate vests in several persons as tenants-in-common or in separate shares, each can represent their part of the estate.

3. Legal Implications of Assessments Made in Good Faith but Without Notice to All Legal Representatives:
The court considered whether an assessment made in good faith, but without notice to all legal representatives, could be valid. It concluded that such an assessment would not bind those who were not notified. The court rejected the argument that a bona fide belief by the Income-tax Officer about the identity of the legal representatives could validate the assessment. It stated that no proceeding is binding on a person who is not a party to it, either directly or through representation.

The court also noted that the petitioner, who received notice and participated in the assessment proceedings without objecting to the lack of notice to other legal representatives, could not later challenge the assessment's validity. The petitioner is estopped by conduct from raising such an objection and is liable for the tax out of the estate portion that vested in him.

Conclusion:
The court dismissed the petition, upholding the validity of the assessment concerning the petitioner who received notice and participated in the proceedings. The assessment is valid to the extent of the estate portion that vested in the petitioner, and he is liable to pay the tax from that part of the estate. The decision underscores the importance of issuing notices to all legal representatives in assessment proceedings to ensure complete representation of the deceased's estate.