2019 (8) TMI 358 - HC - Income Tax

Reopening of assessment - Notice to Legal representatives of the deceased - whether notice u/s 148 (2) was barred by time ? - HELD THAT - In the case at hand, evidently, the assessee died on 15.08.2013, as the assessment year is 2010-11, six years elapsed at the end of said assessment year i.e. on 31.03.2017. Though it is contended on behalf of the petitioner that the notice u/s 148(2) was first published in the newspaper on 09.12.2017 which was beyond the period of limitation; however, the record reveals that the notice u/s 148(2) was first issued on 30.03.2017, which as per Section 149(1)(b) was within limitation. Thus, the contention that the notice u/s 148 (2) was barred by time is negatived. Chapter XV of the 1961 Act lays down provision regarding liability in special cases. Section 159 where under provides for that where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to if he had not died, in the like manner and the same manner and to the extent as the deceased. And the legal representative of the deceased shall, for the purpose of the 1961 Act, be deemed to be assessee. In the present case, the Assessing Officer, after subjecting the petitioner, legal representative of late Ram Singh, to the notice u/s 142(1), found the undisclosed income of ₹ 33,20,000/- which led him to pass the Assessment Order on 27.12.2017 which has been affirmed in the revision u/s 264. These orders when tested on the anvil of the above analysis cannot be faulted with.

Summary

Issues:
1. Validity of the notice issued under Section 148 of the Income Tax Act, 1961.
2. Assessment of liability for concealment of income against the petitioner.
3. Application of Section 149 of the Income Tax Act regarding the time limit for issuing notices.
4. Liability of legal representatives under Section 159 of the Income Tax Act.

Analysis:
1. The petitioner contested the order passed by the Principal Commissioner, Income Tax, challenging the assessment order holding them liable for concealing income. The controversy arose regarding the issuance of the notice under Section 148 of the Income Tax Act. The court examined the original record and confirmed that the notice was indeed issued on 30.03.2017, which was returned unserved. This notice was followed up by a subsequent notice under Section 142(1) sent to the legal representative of the original assessee.

2. The assessing officer found that the petitioner had sold property worth a certain amount and deposited a significant sum in the bank without furnishing documents for a portion of the amount. Consequently, the petitioner was held liable for concealing income. The revision against this assessment was dismissed, upholding the original order.

3. The court delved into the provisions of Section 149 of the Income Tax Act, which specify the time limit for issuing notices under Section 148. In this case, since the assessment year was 2010-11 and the assessee had passed away in 2013, the notice issued in 2017 was found to be within the statutory limitation period, as per Section 149(1)(b).

4. Regarding the liability of legal representatives under Section 159 of the Income Tax Act, the court emphasized that legal representatives are deemed to be an assessee for the purpose of the Act. The assessing officer correctly applied this provision in assessing the undisclosed income of the deceased assessee, leading to the liability of the petitioner as the legal representative.

5. The court referred to relevant case laws to support its decision and concluded that the orders passed by the assessing officer and upheld in the revision cannot be faulted with. The judgment highlighted the importance of legal provisions and upheld the liability of the petitioner as the legal representative of the deceased assessee. Consequently, the petition was dismissed with no costs awarded.