APPEAL AGAINST DEAD PERSON IS VOID AND NOT MAINTAINABLE - Care required by revenue:.

[C.A. DEV KUMAR KOTHARI]

Relevant links and references:

Section 292B of the income Tax Act, 1961.

Section 42C of the Wealth Tax Act, 1957.

CIT v. Smt. Santosh Rani [1996] 219 ITR 301/88 Taxman 209 (MP).

CWT V V.S.Meenakshi Achi (1994) 205 ITR 260, 264, 265 (Mad.)

Rajah Manyam Meenakshamma v. CIT [1956] 30 ITR 286 (AP)

Swaran Kanta v. CIT [1989] 176 ITR 291 (P & H).

Dead person is a non-existing person:

 A dead person is not existing person therefore any legal proceedings cannot be commenced or carried against dead person. The law provides for commencing or continuing legal proceedings against legal heirs and or estate of deceased person in specified circumstances and in specified manner. It is mandatory that the legal requirements, as may be applicable should be satisfied for proper institution of proceedings or continuation of proceedings.

An appeal filed against a dead person is void and not maintainable:

An appeal filed against a dead person is not maintainable and is void and therefore the same can be summarily dismissed. It has been held by courts that  an appeal against a dead person is void from inception and is nullity and S. 292B is also not helpful to the revenue . Where, during the pendency of the appeal before the Commissioner (Appeals), the assessee-appellant died, appeal filed by the department against the deci­sion of the Commissioner (Appeals) rendered subsequently, naming the assessee as the respondent, was liable to be dismissed since it was against a dead person -

CIT v. Smt. Santosh Rani [1996] 219 ITR 301/88 Taxman 209 (MP).

CWT V V.S.Meenakshi Achi (1994) 205 ITR 260, 264, 265 (Mad.)

It appears that the above judgments have been accepted by the revenue and there is no pending SLP before the Supreme Court as appears from information gathered from books and websites. There appears no contrary view from any other High Court. Therefore the above judgments are binding and the same may be applied all over India.

CIT v. Smt. Santosh Rani [1996] 219 ITR 301/88 Taxman 209 (MP):

In this case facts were as follows:

The assessee died in the year 1981 leaving behind his widow. For the assessment  year 1975-76 assessment was made on August 22, 1980, when the deceased was alive  and  total income of Rs. 1,20,060 was determined. The assessee preferred an  appealed against the said assessment order, before the Commissioner of Income-tax (Appeals) who disposed of the appeal by order dated July 28, 1983, accepting the assessee's appeal. During intervening period , the assessee died on August 31, 1981, when the appeal was  pending. The revenue preferred an appeal before the Tribunal in which the deceased assessee was made and mentioned as the respondent.

The Tribunal dismissed  the appeal holding that the appeal filed by the Department was a nullity from inception as the appeal was filed against a dead person. This was challenged by the Revenue before the High Court with the following questions:

" (i) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in dismissing the appeal and holding that the appeal filed by the Department was a nullity from inception as the appeal was filed against a dead person ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in dismissing the appeal ignoring the provisions of section 292B of the Income-tax Act, 1961?

(iii) Whether, on the facts and in the circumstances of the case, the Tribunal is, justified in dismissing the appeal as nullity from inception without allowing an opportunity to correct the mistake which is apparent from record and which occurred because the Commissioner of Income-tax (Appeals) had described the deceased person as an appellant ?"

An analysis of  facts and courts reasonings and judgment:

The original  assessee was  Narayandas Jwalaprasad, who died in the year 1981.

He left  behind his widow, Smt. Santosh Rani.

 The assessment in question is for the year 1975-76 and this has been made on August 22, 1980, when the deceased was alive on a total income of Rs. 1,20,060.

 The original  assessee appealed against the assessment order dated August 22, 1980, before the Commissioner of Income-tax who disposed of the appeal by order dated July 28, 1983, accepting the assessee's appeal.

 Meanwhile, the assessee had already  died on August 31, 1981, during the pendency of the appeal.

 An appeal was preferred by the Revenue before the Tribunal. In that appeal, the respondent was Narayandas Jwalaprasad that is the original assessee who is no more at the time when appeal is filed.

 The appeal was presented before the Tribunal on October 18, 1983.

This appeal was rejected by the Tribunal on the ground that the appeal was against a dead person.

An application was made by the Revenue for making a reference before the High Curt and hence the aforesaid three questions were referred by the Tribunal to the High Court.

The High Court found and observed  from the record that  an impression was sought to be given that the appeal was filed in the name of Smt. Santosh Rani, the legal representative of the late Shri Narayandas Jwalaprasad. Then a doubt arose as to how the Tribunal could miss such a major thing that in the memorandum of appeal which has been placed on the record before the high Court   it is by Santosh Rani, the legal representative of the late Narayandas Jwalaprasad.

Therefore, the original record was summoned from the Commissioner and Shri Tankha, learned counsel far the Revenue, produced the record before the Court.

The record  showed that the original appeal was filed on October 13, 1983, against the dead person, Narayandas Jwalaprasad, who died on October 31, 1981.

 Another memo of appeal seems to have been filed by the Department to show that the Tribunal is wrong.

 But this mischief was caught when the original record was summoned. Shri Tankha was specifically asked whether this second appeal which appears to have been filed  against  Smt. Santosh Rani as a legal representative of the deceased Narayandas Jwalaprasad, is maintainable when the first appeal which was filed by the Revenue, had been rejected by the detailed speaking order.

Learned counsel frankly submitted that this second appeal is not envisaged in law and not maintainable.

Hence, we are constrained to observe that some mischief is sought to be played by misleading this court by showing that the appeal was filed by the Revenue properly against the legal representative of the late Narayandas Jwalaprasad.

 Such kind of attempt on the part of the Revenue cannot be countenanced and it is to be condemned.

On consideration of the above facts and circumstances the Court held that:

           "We are of the opinion that the view taken by the Tribunal is justified that no appeal lies against a dead person and that the appeal itself was incompetent and a nullity. Hence, the Tribunal has rightly decided the matter.

The reference was answered accordingly.

CWT V V.S. Meenakshi Achi (1994) 205 ITR 260, 264, 265 (Mad.):

In this case death of assessee took place. Assessment proceedings were completed against the estate of deceased assessee. Revenue preferred appeal to tribunal and then  applied  for reference. The dead person was shown as respondent. The Court held that it is not a mistake which could be rectified Appeal to tribunal and application for reference were not valid

The facts, reasoning and judgment of the court is analyses below:

 The assessment years are 1979-80 and 1980-81 for the Wealth-tax .

 The assessments  were made on December 20, 1983, on the estate of late V. S. Meenakshi Achi, represented by the executor V. S. Sivalingam Chettiar of Poolankurichi in the status of an individual, under section 16(3) read with section 17 of the Wealth Tax Act 1957.

The assessee, that is the executor to the estate, preferred appeals before the Appellate Assistant Commissioner who allowed relief  respect of the valuation of certain unquoted shares held by the assessee in Messrs. Abirami Cotton Mills Ltd.

The Revenue preferred appeals before the Tribunal against Smt. V. S. Meenakshi Achi, who was impleaded as the respondent in the appeals.

 These appeals were dealt with by the Tribunal and disposed of in the manner indicated in its order for statistical purposes (The appeals were dismissed s not maintainable).

 The reference application was also dismissed by the Tribunal

Therefore, In these tax case petitions, under section 27(3) Of the Act, the Revenue has sought a direction to the Tribunal to refer question of law, stated to arise on the application of rule 1D of the Rules framed under the Act.

An objection has been raised regarding the maintainability of these applications, on the ground that the assessee, viz., the estate represented by its executor, was not at all impleaded as a party respondent to the appeals preferred by the Revenue before the Tribunal, but the dead person and not the assessee, had been shown as the respondent and, in these tax case petitions also, the dead person alone has been shown as the respondent and not the assessee.

 It was, therefore, submitted that these tax case petitions under section 27(3) of the Act, not having been preferred against the assessee who was subjected to the assessment could not be entertained and a case referred.

Learned counsel for the Revenue pointed out that the omission to show the name of the assessee, viz., the estate represented by its executor, as the respondent before the Tribunal and also before this court was only on account of a typographical error and that should not be made much of. Attention was also drawn to the files where, with reference to the address to which the notice may be sent, it had been stated that the notice should be sent to the executor and that is sufficient to indicate that the appeals were filed only against the assessee, viz., the estate represented by its executor and not the deceased person.

Reliance in this connection was also placed on the decisions in Rajah Manyam Meenakshamma v. CIT [1956] 30 ITR 286 (AP) and Swaran Kanta v. CIT [1989] 176 ITR 291 (P & H).

Counsel for the Revenue also stated  that T. C. M. P. Nos. 891 and 892 of 1992 have been filed to amend the cause title in the tax case petitions and that, if those petitions are ordered, the defect could be remedied.

  The high Court  considered the objection raised and also the argument of learned counsel for the Revenue to maintain the applications, as filed. And then held that

From a perusal of the assessment orders, it is seen that the assessments were made on the estate. This is also affirmed in paragraph 2 of the affidavit filed in support of T. C. M. P. Nos. 891 and 892 of 1992.

There cannot, therefore, be any doubt that, even according to the Revenue, the assessee was not the deceased person, but only the estate of the deceased person, represented by the executor.

This assessee had preferred appeals before the Appellate Assistant Commissioner in which the Revenue figured as the respondent.

It is at once obvious that, even during the course of the assessment proceedings and also the appeals before the Appellate Assistant Commissioner, it was only the estate, represented by the executor, which figured as the assessee and also the appellant and this was within the knowledge of the Revenue.

When the appeals were preferred by the Revenue before the Tribunal, they had been filed against the deceased person and not against the assessee.

The reliance placed upon column 11 regarding the issue of notice cannot be availed of by the Revenue to sustain the applications, as filed.

 When the respondent in the appeals before the Tribunal is, admittedly, a dead person, the mere filling up of a column regarding the issue of notice, to a third person cannot avail to the Revenue.

In other words, the appeal is against one person and the issue of notice is requested with reference to another who is not the respondent and, under those circumstances, the reliance on the filling up of the column relating to the issue of notice cannot, in any manner, advance the case of the Revenue.

  In Rajah Manyam Meenakshamma v. CIT [1956] 30 ITR 286 (AP), relied on by the revenue the assessee, in the course of the assessment for the assessment year 1947-48, returned only the proportionate lease amount in respect of certain graphite mines which were leased out for 25 years and 30 years, respectively, on a lump sum royalty and claimed that only the proportionate lease amount for one year was taxable. This was rejected by the Income-tax Officer and, on appeal, it was contended that the amount received represented premium and was, therefore, capital in nature and that was also rejected and later, the assessee died. Later, on July 4, 1951, an appeal was filed before the Tribunal purporting to be by the assessee, but signed by a power of attorney agent of Meenakshamma, wife of the deceased assessee. The Tribunal, after giving an opportunity to have the legal representative brought on record, which was not availed of, concluded that the appeal was not validly presented. On a reference under section 66(2) of the Indian Income-tax Act, 1922, a Division Bench of the Andhra Pradesh High Court pointed out that the widow of the assessee, being the legal representative of the deceased assessee, was also liable to pay the tax assessed on her husband and was an assessee within the meaning of the definition of an assessee in the Indian Income-tax Act, 1922, and was entitled to file an appeal in her own right. It was further held that the power of attorney agent of the legal representative had signed the memorandum of grounds of appeal and that was as good as the appeal having been presented by the legal representative of the original assessee. It was under those circumstances that the court held that the description was only a mistake and that the memorandum of appeal could be treated as having been filed by the legal representative herself and, therefore, the presentation to the Tribunal was proper. It requires to be pointed out that this decision was one which related to the filing of an appeal by the legal representative of an aggrieved assessee before the Tribunal and not a case where, as here, the Revenue was fully aware of who the assessee was and in spite of that, it had chosen to show the name of the deceased person as the assessee, instead of the real assessee. We are of the view that this decision cannot have any application at all on the facts and circumstances of this case.

Another decision relied on by the revenue that is n Swaran Kanta v. CIT [1989] 176 ITR 291  (P & H), also does not, in any manner, assist. In that case, Sam Dass Abbi filed a return of his income for the assessment year 1975-76, and that return was revised, but during the pendency of the assessment proceedings, he died on March 7, 1977. Subsequently, his widow was impleaded and notice was issued to her and, in her presence, the assessment was finalised and in the course of the assessment order, the death of the original assessee, the bringing on record of the legal representative of the deceased and the issue of notice to her and the taking of further proceedings in her presence, were all noticed, but in the heading of the order, the name of the deceased assessee was shown, instead of the legal representative. The assessment order was questioned on the ground that it was null and void, as it was made on a dead person. The Appellate Assistant Commissioner agreed with the stand and annulled the assessment. But, on further appeal by the Revenue to the Tribunal, the order of the Appellate Assistant Commissioner was reversed and the assessment order was restored. On a reference to  the High Court and, in answering the reference, the High Court held that the widow, as the legal representative, became a deemed assessee for the purpose of completion of the proceedings and for the recovery of the tax, in her hands, and, therefore, no exception could be taken to the order passed by the Tribunal. In addition, it was also pointed out that, under section 292B of the Income-tax Act, 1961, any mistake, defect or omission in the assessment, if the assessment is in substance and effect in conformity with or according to the intent and purpose of the Act, would not invalidate the assessment and that, as the entire proceedings were conducted after the death of the original assessee, in accordance with law, the Tribunal was justified in restoring the order of assessment. The court considered that this  decision also does not in any manner assist the Revenue. Initially, the husband was the assessee and on his death, his widow, as his legal representative, was impleaded, issued notice and in her presence, the assessment proceedings were completed and in fact and in law, she was the assessee at the time when the assessment was so completed and she could not have, therefore, complained that the assessment had been passed against a dead person and, therefore, void. In this case, court found that the deceased was not in the picture at all even in the course of the assessment proceedings, as the assessments were made admittedly on the estate and there could not have, therefore, been any mistake whatever with reference to the assessee who has objected to the assessment.

 Equally, there could not have been any mistake whatever with reference to the appellant in the appeals filed by the assessee before the Appellate Assistant Commissioner. In such a situation, it is extremely difficult  to accept that, when the Revenue preferred appeals before the Tribunal, a typographical error had crept in, in that, the name of the dead person has been given as the respondent, instead of the real assessee, viz., the estate, represented by the executor.

Even section 42C of the Wealth Tax  Act, comparable to section 292B of the Income-tax Act, 1961, cannot be pressed into service by the Revenue for, it cannot be stated that, in substance and effect, the appeals preferred by the Revenue before the Tribunal were either in conformity with or according to the intent and purpose of the Act.

Ordinarily, the appeals at the instance of the Revenue before the Tribunal could be filed only against the assessee and not against a dead person and in this case, the Revenue, with full knowledge as to who was the real assessee, had not chosen to file the appeals against the real assessee, but filed them against a non-existent person.

 Under these circumstances, section 42C of the Act also cannot be called in aid by the Revenue.

Court also did not find any useful purpose being served by the amendment applications  filed by revenue for, if ordered, they could at best, cure the defect in the cause title in the tax case petitions before this court and would not have the effect of bringing the real assessee on record as a party to the proceedings before the Tribunal.

 As matters stand, the Revenue had preferred the appeals before the Tribunal and also the reference applications before this court, against a dead person who is not the assessee and such applications cannot, therefore, be countenanced.

Therefore the court , dismissed  T. C. P. Nos. 215 and 216 of 1988, and T. C. M. P. Nos. 891 and 892 of 1992.

Conclusions from the judgments:

An appeal against a dead person, as filed originally  is incompetent and nullity.

Attempt of the revenue to substitute name of legal heir and to give impression that appeal was filed against legal heirs was  condemned by the court.

 Such null and void appeal cannot be rectified and revenue cannot seek protection of S. 292B of the income Tax Act, 1961 or S. 42C of the Wealth Tax Act, 1957 which are parimateria.

Observations of author:

We find that there was apparent and fundamental mistake of the revenue, by impleading a dead person as a respondent. This is more serious when the assessment was made on legal heirs. The fundamentals  principals of law cannot recognize such an appeal, because the questions are:

Who will take or receive notice of appeal in a legal manner. Because there cannot be any authorized person of a deceased person. All  powers given earlier cease to exist on death of a person.

Who will represent the case? There cannot be any authorized person of a deceased person.

Who will be responsible for any omission or wrong done by any person who may, by mistake  represent a deceased person based on old power given prior to death ?

Why any other person shall take responsibility for appeal filed against a dead person?

Practice support for assessee:

 Appeal by assessee -In case of appeals in tax matters the assessee is not required to mention the name of officer. In fact it should not be mentioned because the individual officer is not respondent. Therefore, in case of appeal preferred by assessee the correct designation of concerned officer should be mentioned as respondent. Mentioning name is superficial.

In other appeals and petitions, care should be taken to correctly mention name and address of respondents, opposite parties.

 Appeal by revenue- when an appeal is filed by revenue impleading a dead person as respondent the legal heir can take proper action to challenge such appeal. A letter can be sent that such respondent is dead person and the appeal cannot be represented and the appeal is void etc.  in some situations it may be advisable to file cross objections under protest and without prejudice. In cross objections grounds on the following lines can be preferred on maintainability of appeal:

The appeal has  been filed by the A.O./ CIT/ Revenue  knowingly making  a dead and  non-existing person as Respondent. Therefore, the appeal is null and void and is not maintainable.

The appeal may be dismissed summarily following law laid down in the following judgments:

CIT v. Smt. Santosh Rani [1996] 219 ITR 301/88 Taxman 209 (MP).

CWT V V.S.Meenakshi Achi (1994) 205 ITR 260, 264, 265 (Mad.)

Care required by revenue:

The revenue officials should be careful while preferring appeal before the Tribunal or courts to mention correctly the respondent. In case of mistake the appeal itself can be invalid and void. Even in case of a living person, if name and address of respondent is not correctly mentioned (at least as per the latest information available with the revenue), the appeal may be contested s not maintainable. In case of individuals, care is required to take immediate  note of notice or information about  death of assessee. Care should be taken to record name of legal heirs in all records related with all years so that by mistake name of deceased assessee is not mentioned as a respondent  in appeals or in notices issued after death of individual assessee.