2013 (3) TMI 128 - HC - Income Tax

Proceedings under Sec. 148 - notice to only one of the legal representatives LRs of deceased Mangi Lal Bhatia & not to other LRs - whether a valid initiation of proceedings ? - review application - Revenue sought review of the order whereby co-ordinate Bench proceeded to dismiss the appeal considering it to have abated for failure on the part of the appellant to bring the legal representatives of the sole respondent on record - Held that - A bare look at the impugned order dated 16.09.2011 makes it clear that the co-ordinate Bench proceeded to consider the appeal as having abated for the legal representatives of the sole respondent having not been brought on record. The observations have been made even to the effect that the appellant Revenue had not moved any application seeking substitution of the legal representatives of the sole respondent. It is but clear that while passing the aforesaid order dated 16.09.2011, the facts got overlooked that the appellant Revenue had indeed moved an application seeking substitution of the legal representatives of respondent Badri Prasad way back on 22.11.2005 and that the matter was being processed upon the said application only, and the notices were ordered to be issued on 22.11.2005 to the proposed legal representatives. The observations in the order dated 16.09.2011 are also indicative that the said Badri Prasad Bhatia was himself taken to be the sole assessee though he was on record only as the legal representative of the original assessee Mangi Lal. In any case, the appeal, in the given status of record, could not have been considered as having abated and hence, the order impugned dated 16.09.2011 is required to be recalled. Of course, it is noticed that there had been defaults on the part of the appellant where the requisites for service of notice to the proposed legal representatives were not put in, it might have been considered the effect of this aspect of the matter but now, when the counsel Mr. Vipul Singhvi has put in appearance on behalf of the proposed legal representatives, of course, in this review petition, there does not appear any reason to enter into this aspect of the matter any more. However, it is considered appropriate and hence observed that so far the prayer seeking substitution of the legal representatives of the sole respondent Badri Prasad Bhatia is concerned, it remains to be examined and considered in appeal. The appearance on behalf of the non-petitioners in this petition could only be considered as made on behalf of the proposed legal representatives. Needless to add that further processing of the appeal shall also depend on the order to be passed on the application seeking substitution of the legal representatives. The proposed legal representatives in the appeal shall be considered as having been served with appearance of the learned counsel Mr. Vipul Singhvi on their behalf.

Summary

Issues:
1. Review of order dismissing appeal for failure to bring legal representatives on record.

Analysis:
The High Court received a petition from the Revenue seeking a review of an order dated 16.09.2011 that dismissed an appeal due to the failure to bring the legal representatives of the sole respondent on record. The original assessee had passed away, and the legal representatives were not properly brought into the proceedings. The Revenue had moved an application for substitution of legal representatives, but due to defaults and non-compliance, the appeal was dismissed as abated. The Court, upon review, found errors in the order and decided to recall it.

The background of the case involved proceedings under Section 148 of the Income Tax Act, 1961, where notices were allegedly not issued to all legal representatives of the deceased assessee. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal had earlier annulled the assessment due to lack of notice to all legal representatives. The Revenue appealed to the High Court, raising substantial questions of law regarding the validity of initiating proceedings without serving all legal representatives.

The Court found that the order dismissing the appeal for abatement overlooked the fact that the Revenue had indeed moved an application for substitution of legal representatives. The Court noted that the appeal could not be considered as abated, and errors in the observations made in the order were apparent. The Court allowed the review petition, recalled the order dated 16.09.2011, and restored the appeal. The proposed legal representatives were considered as having been served, and further processing of the appeal would depend on the decision regarding the substitution of legal representatives.

In conclusion, the Court reviewed the order dismissing the appeal for failure to bring legal representatives on record, found errors in the observations made, and decided to recall the order. The case highlights the importance of proper procedures in bringing legal representatives into proceedings and ensuring compliance with the law.