2015 (10) TMI 749 - HC - Income Tax

Validity of re-assessment proceedings initiated against a dead person after his death - liability of the legal representative - Held that - It is clear from the analysis of Section 159 of the Act as noticed that the legal representative of the deceased is liable for filing the returns and payment of taxes. It is, however, restricted to the extent of inheritance to the estate of the deceased by the legal representatives. In the present case, notice under Section 148 of the Act was issued to the petitioner as legal representative of her deceased husband Kulwinder Singh Johal and not as an assessee in her individual capacity for the assessment year 2008-09. It was not in controversy that Kulwinder Singh Johal had died on 25.7.2014. Thus, the notice issued to the petitioner as legal representative of her deceased husband, Kulwinder Singh Johal is legal and valid. None of the pronouncements relied upon by learned counsel for the petitioner comes to his rescue. Herein, the income of the deceased Kulwinder Singh Johal which has escaped assessment is sought to be brought to tax by issuance of a notice under Section 148 of the Act to his legal representative in accordance with the provisions of Section 159 of the Act. No justification to interfere with the impugned notice and the assessment proceedings. Petition dismissed. - Decided against assessee.

Summary

Issues:
1. Assessment proceedings against a deceased person.
2. Legal liability of the deceased's representative for tax payment.

Issue 1: Assessment proceedings against a deceased person

The petitioner filed a writ petition under Articles 226/227 of the Constitution of India, seeking to stop the assessment proceedings initiated against a deceased person. The deceased, Shri Kulwinder Singh Johal, had assessment proceedings initiated against him by respondent No.2 even after his death. The petitioner, as the legal representative of the deceased, argued that no notice under Section 148 of the Income Tax Act, 1961, could be issued to her. The petitioner relied on judgments from the Andhra Pradesh High Court and the Allahabad High Court to support this argument. However, the court found no merit in the petitioner's submission.

Issue 2: Legal liability of the deceased's representative for tax payment

The court analyzed Section 159 of the Income Tax Act, which deals with legal representatives. The section clarifies that the legal representative is liable to pay any sum the deceased would have been liable to pay if he had not died. It further states that proceedings against the deceased can continue against the legal representative, who is deemed to be an assessee. The legal representative is personally liable for any tax payable, limited to the assets of the deceased's estate. The court emphasized that the legal representative is liable for filing returns and paying taxes, restricted to the inheritance from the deceased's estate. The notice issued to the petitioner as the legal representative of the deceased was deemed legal and valid under Section 159 of the Act.

The court examined previous case laws cited by the petitioner but found them irrelevant to the current case. The judgments from the Andhra Pradesh High Court and the Allahabad High Court did not address the specific issue of assessing the legal representative under Section 159 of the Income Tax Act. The court concluded that the notice issued to the petitioner as the legal representative of the deceased was valid, and there was no justification to interfere with the assessment proceedings. Therefore, the court dismissed the petition.