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TMI Blog2010 (8) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... etailed objections are filed to the application for condonation of delay contending that the Revenue had the knowledge of the death of the assessee on June 10, 2008 itself which they were informed about the same by a letter dated June 3, 2008. There fore, the contention that the Revenue had no knowledge of the death of the deceased and it came to know about the death of the deceased recently is not correct and therefore, the delay should not be condoned and the applications have to be dismissed. 3. Learned counsel for the Revenue firstly contended that, in view of section 159 of the Income-tax Act, on the death of the assessee there is no abate-ment. In law, the legal representatives are deemed to be parties to the appeal and the applications filed to bring the legal representatives on record and for condonation of delay in filing such application are superfluous. Even otherwise, the Revenue was not aware of the death of the assessee as contended by the legal representatives of the assessee and therefore, the cause shown would constitute sufficient cause for condoning the delay. 4. Per contra, learned counsel for the assessee submitted that this is an appeal filed under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or bringing the legal representatives on record and it has to be followed in prosecuting the appeal before the High Court. Seen from any angle, he submits that in the appeal before the High Court, if the assessee dies, it is mandatory that application has to be filed to bring the legal representatives on record and if it is not filed, the right to prosecute the appeal stands extinguished. 7. In the light of the aforesaid facts and the rival contentions, the point that arises for our consideration is as under : "In an appeal under section 260A of the Act, if the assessee dies, whether the appeal abates ?" 8. In order to answer the aforesaid question it is necessary to refer to the relevant provisions under the Act. 9. Section 2(29) of the Income-tax Act, 1961 defines the word "legal representative" as under : `'legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908)." 10. Clause (11) of section 2 of the Code of Civil Procedure, 1908 defines legal representative as follows : "(11) `legal representative' means a person who in law represents the estate of a deceased person, and include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the death of a person who is liable to pay tax under the Act would not get extinguished on account of his death. If he dies, his legal representative shall be liable to pay any tax which would have been liable to be paid by such person if he had not died. Sub-section (2) makes the position clear that for the purpose of assessment, reassessment or recomputation under section 147 of the Act, any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of death of the deceased. The language employed in this sub-section manifests the intention of the Legislature which expressly provides on the death of a person any proceeding by way of assessment, reassessment or recomputation initiated under the Act is deemed to have been initiated against the legal representative himself and therefore, it can be continued from the stage at which it stood on the death of the deceased. Therefore, the concept of abatement is completely excluded in these proceedings. Sub-section (2)(b) makes it clear even if proceedings had not been ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative, without being prodded by any of the parties. It can enhance the assessment, taking advantage of the opportunity afforded by the taxpayer's appeal even though the appeal itself has been mooted only with a view to a reduction in the assessment. These are special and exceptional attributes of the jurisdiction of a tax appellate authority. These attributes underline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself. This position has been well brought out in more than one decision of the Supreme Court." 14. Therefore, in a tax appeal the appellate authority is no different functionally and substantially form the assessing authority itself. An appeal is a continuation of the process of assessment. The appellate authority can itself enter the arena of assessment either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative. It can enhance assessment in the assessee' appeal. The intention of the Legislature in enacting section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was pending before the High Court, if the assessee died, it was well settled that there was no abatement of such reference. In fact, the Patna High Court in the case of Addl. CIT v. S. Surjit Singh reported in [1975] 101 ITR 433 dealing with the said question reviewing the entire case law has held as under (page 436) : "The Income-tax Act contains provisions in sections 256 to 260 in respect of references under the Act. Next, it provides in sections 261 to 262 for appeals to the Supreme Court. Section 256 lays down how a statement of the case is to be drawn up and referred to the High Court. Section 257 provides for a similar statement of case to the Supreme Court in certain cases. Section 258 is in respect of the power of the High Court or the Supreme Court. Section 259 provides how the case is to be heard by the High Court and section 260 lays down how the decision of the High Court or the Supreme Court is to be given. Section 261 provides for appeal to the Supreme Court and section 262 provides for the manner in which the appeal is to be heard by that court. It will appear from the aforesaid provisions relating to the High Court that there is no procedure similar to that, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cetain provisions alone thereof applicable to proceedings under the Act. The conclusion is obvious that only those provisions of the Code which have been specifically made applicable to proceedings under the Act to apply. There is another way of looking at this and that is, that abatement of a suit or appeal after a certain time is in the nature of penalty which is the result of non-compliance with the statutory provision of law. If results in the extinguishment of the right of a plaintiff or an appellant to prosecute the suit or appeal any further. In the absence of any such penal provision in the Income-tax Act, it would be unfair to read such a provision contained in the Code as incorporated in the Income-tax Act and thereby saddle a litigant with an obligation which a litigant, prima facie, does not suffer from. If that were to be done, it would affect a special law like the Income-tax Act and the special jurisdiction conferred thereby on the High Court. In my view, therefore, Order XXII of the Code has no application even for this reason." 18. Therefore, it was well settled that Order 22 of the Civil Procedure Code has no application to a reference under section 256 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit (6) The High Court may determine any issue which- (a) has not been determined by the Appellate Tribunal ; or (b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section." 20. Section 260A(1) confers a right on the parties to prefer an appeal to the court from every order passed in an appeal before the Tribunal. However, such an appeal could be admitted by the High Court only if it is satisfied that it involves a substantial question of law. The High Court shall formulate the question at the time of admitting the appeal. Sub-section (4) makes it very clear that the appeal shall be heard only on the question s formulated and the respondent is conferred a right t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in civil and criminal law cannot be smuggled into taxation law. 21. It is contended that sub-section (7) of section 260A of the Act expressly says the provisions of the Code of Civil Procedure, 1908, relating to appeals to the High Court shall, as far as may be, be applicable to the appeals under this section. It takes within it Order 22 in general and rule 11 of the Civil Procedure Code in particular. 22. Reliance was placed on the express words contained in Order XXII, rule 11 which reads as under. "11. Application of order to appeals.-In the application of this Order to appeals, so far as may be the word `plaintiff' shall be held to include an appellant, the word `defendant' a respondent and the word `suit' an appeal." 23. As the wordings of the said provision makes it clear that Order 22 is made applicable to appeals also, Order 22 exclusively deals with death, marriage and insolvency of the parties. Order 22, rule 1 expressly declares that no abatement by party's death if right to sue survives. It also deals with the procedure when the plaintiff or the defendant dies, to bring the legal representatives on record, what are the questions to be gone into by the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deceased is deemed to be the proceedings initiated against the legal representatives from the inception which could be continued from the stage of his death, this concept of abatement totally runs counter to the scheme of the Act. As set out above at every stage the Legislature has taken pains to exclude the concept of abatement. There fore, in an appeal under section 260A of the Act if the assessee dies, the question of abatement of the appeal would not arise. No such abatement takes place. An application is to be filed to bring the legal representatives on record as the principle of natural justice requires that they should be heard before any order is passed to the extent of the liability to pay tax in respect of the estate which they have inherited. In that view of the matter, the objection taken by the respondent that Order 22 of the Civil Procedure Code applies to an appeal under section 260A of the Act and if there is a delay in filing the said application, abatement takes place and therefore, the applications filed for setting aside abatement, for condoning the delay are required to be rejected as no sufficient cause is shown, is without any substance. 25. The learne ..... 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