2019 (6) TMI 249 - HC - Income Tax

Assessment order in the name of a dead person - death of the assessee during proceedings was not updated to Assessing Authority - the proceedings against the dead person can continue in the name of the LR u/s 159 - Tribunal remanding the matter back to the Assessing Authority for passing fresh Assessments in the name of the LR - HELD THAT - Admittedly, the fact of death of the Assessee S.Vellamuthusamy Naidu who died on 25.01.2006 was not brought to the notice or record of the Assessing Authority before 23.03.2006 when the Assessment Orders were passed. The main Appeal was filed by the son Mr.V.Srinivasan himself. Therefore, the appellant has not disputed that the son Mr.V.Srinivasan was legal representative and was very much aware of the facts of the assessments against the deceased man S.Vellamuthusamy Naidu, his own father. The Assessing Authority is not expected to have knowledge of the fact of the death of Assessee when he passed the orders and therefore, there is an obligation on the legal representative to bring such fact to the notice of the Assessing Authority. When this fact was brought to the notice of the CIT (Appeals) for the first time, the said authority should have taken the said fact on record, which he has done, but he should either have passed the Assessment Orders on merits while exercising his appellate powers or should have remand the case back to the Assessing Authority for framing Assessments again in the name of the legal representative in accordance with law. Having not done that, the Revenue was justified in approaching the learned Tribunal and we do not find any error in the orders passed by the learned Tribunal remanding the matter back to the Assessing Authority for passing fresh Assessments in the name of the legal representative Mr.V.Srinivasan. - Decided against the Assessee and in favour of the Revenue.

Summary

Issues:
1. Assessment Orders passed in the name of a deceased person - validity and legal implications.
2. Applicability of Section 159 of the Income-tax Act regarding legal representatives in assessment proceedings.

Issue 1: Assessment Orders passed in the name of a deceased person

The Appellant argued that Assessment Orders passed in the name of a deceased person were non-est and void, as in this case where S.Vellamuthusamy Naidu had expired before the Orders were issued. The CIT (Appeals) agreed, stating that orders issued in the name of a deceased person are null and void, and should have followed Section 159 of the Income-tax Act. The Tribunal, however, found the passing of the order against a dead person as a curable infirmity and directed the Assessing Authority to make assessments in the names of legal representatives. The Tribunal considered the time limit for passing the order and set aside the previous orders, allowing the Revenue's appeal.

Issue 2: Applicability of Section 159 of the Income-tax Act

Section 159 of the Act holds legal representatives liable for paying any sum the deceased would have been liable to pay. It states that proceedings against the deceased are deemed to continue against the legal representative, and the legal representative is deemed to be an assessee. The Revenue argued that the legal representative, being aware of the death of the Assessee, should have informed the Assessing Authority before the Assessment Orders were passed. The Court found that the legal representative failed to inform the Authority of the Assessee's death before the Orders were issued. Therefore, the Court upheld the Tribunal's decision to remand the case back to the Assessing Authority for fresh assessments in the name of the legal representative, Mr. V. Srinivasan.

In conclusion, the Court dismissed the Appeals and answered the questions against the Assessee in favor of the Revenue. The Court emphasized the importance of complying with procedural requirements and bringing relevant facts to the notice of the Assessing Authority to ensure proper assessment proceedings.