9911796707
TMI Blog1989 (12) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... heirs and in those circumstances, the assessment completed Ex parte was not proper and valid in law and should be cancelled. The assessment was cancelled by the ITO by his order dated31st March, 1980. Subsequently, the ITO made another assessment on 29th Feb,. 1985 determining the total income at Rs. 1,15,160. This assessment was made on M/s Sunshine Electric Radio Co. In the status of individual. After the assessment was reopened on 31st March, 1980, the assessee by a letter dated 26th Feb., 1982 informed the ITO that Suraj Bhan died intestate and that the notices under s. 143(2) or any other notice under the IT Act might please be served on the legal heirs of the deceased as required under s. 159 of the IT Act. Again on 2nd March, 1982 another letter was filed giving the names of the legal heirs of Suraj Bhan who are four sons and three daughters alongwith their addresses but yet the ITO without serving notice upon legal heirs and without bringing the legal heirs on record, made the assessment on Suraj Bhan in the status of individual. 3. The assessee contested this assessment in appeal as being invalid and opposed to law and should be annulled. In support of the view that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1986) 25 TTJ (Del) 230 : (1986) 16 ITD 126 (Del) submitted that the assessment in this case was properly annulled following the decision of the Gauhati high Court in 1977 CTR (Gau) 232 : (1978) 11 ITR 507 (Gau) and that decision was rightly followed by the CIT and that the decision of the CIT does not broach any interference at this level because the decision relied upon by the Department in (1981) 23 CTR (Del) 82 : (1982) 134 ITR 145 (Del), (1981) 128 ITR 142 (Guj) and (1977) 106 ITR 855 (Cal) were also distinguishable on facts. 5. We have carefully considered these rival submissions and gone though the decisions relied upon. The admitted facts are that by letters dated 26th Feb., 1982 and 2nd March, 1982 and in earlier letter dated 31st March, 1980 requesting for cancellation of assessee made under s. 143, the assessee did bring to the notice of the ITO that Suraj Bhan died on 17th Oct., 1978 by giving the names and furnishing the addresses of the legal representatives, requested the ITO to serve notices on the them before taking any further proceedings. The ITO ignoring these requests made the assessments on the assessee. On these admitted facts, the question, therefore, is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause for the asst. yr. 1962-63, the assessments was made against the deceased the proceedings were invalid after his death but for the asst. yr. 1963-64, there was no indication that notice was served on all the legal representatives, but the assessments were not nullities. The High Court came to the conclusion that the assessments were not nullities on the specific finding that for both the years at least one of the legal representatives and an advocate were present and took part in the proceeding and that the legal representative did not complain at any stage that the proceedings could not go on against them. Even though the ITO had to serve on all the legal representative a notice in order to pass a valid order, this was a case in which the proceedings were conducted in such a way that they could be continued by taking up the same from the stage at which they were left when the assessee died. The High Court then pointed out that under s. 159 of the IT Act, 1961 if proceedings had already been started, they could be continued against the legal representative as if the proceedings were going on against the legal representative from the very beginning and even if they had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention taken was that the assessments should have been annulled for lack of notices to the legal representatives but the Tribunal rejected this contention and sustained the order of the AAC. The Calcutta High Court upheld the view of the Tribunal by pointing out that under s. 159 of the IT Act, 1961, there is no provision for any annulment of assessment but on the other hand. It expressly provides for continuance of the assessments from the state at which it stood on the date of the death of the assessee against the legal representatives. In this case, the fact found by the High Court was that though the assessee died after filing the returns, the fact of his death was not brought to notice of the ITO at all at any stage, till a contention was raised before the AAC for the first time that the assessments should have been made on the legal representative. Since the ITO was not aware of the death of the assessee, the High Court pointed out that the ITO was unable to comply with the provisions of law, and therefore, those assessments were rightly set aside by the AAC in as much as they were not in accordance with the relevant provisions of the Act. Then the High Court proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt jurisdiction. The legal representatives, the Gujarat High Court pointed out, has a right to waive the advantage of any statutory provisions made solely for his protection or benefit and not conceived in the public interest. Therefore, if legal representative is present before the taxing authority in some capacity or voluntarily appears in the proceedings without service of notice or upon service of a notice not addressed to him but to the deceased assessee, and does not object to the continuance of the proceedings against the deceased, but is heard by the ITO and invites an assessment on merits, such a legal representative must be taken to have exercised the option against him. Then it explained as to what would happen if an authority having inherent jurisdiction, acts in contravention of a mandatory provision as is given in civil law, which we think is not very relevant to dilate upon here because the principle laid down in civil law, which we think is not very relevant to dilate upon here the legal representative were found to have knowledge of the assessment proceedings before the ITO and, therefore, it was pointed out that it was not open to them to raise the plea of nullity ..... 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