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TMI Blog1996 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessments ? " One B. N. Singh, had extensive business interests. He did not file a return for the assessment years 1965-66, 1966-67 and 1967-68. He died on April 16, 1967. He left behind ten legal representatives comprising three widows, four sons and four daughters. The eldest son, Jai Prakash Singh, filed the returns for the said three assessment years on March 17, 1970, November 12, 1970, and October 27, 1971, respectively. The returns were signed by Jai Prakash Singh alone --- not by the other legal representatives. In these returns, Jai Prakash Singh disclosed the income received by the late B. N. Singh from all his business interests and properties, (It may be emphasised that B. N. Singh died after the close of the accounting year relevant to the assessment year 1967-68 --- in fact, sixteen days after the commencement of the assessment year 1967-68]. The returns filed by jai Prakash Singh were scrutinised by the Income-tax Officer who also issued notices under sections 142(1) and 143(2) to him to appear and produce documents, accounts and other material. He complied with the same. No objection was raised by Jai Prakash Singh before the Income-tax Officer in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in clause (7) of section 2 in the following words : " 'assessee' means a person by whom any tax or any other sum of money is payable under this Act, and includes (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ; (b) every person who is deemed to be an assessee under any provision of this Act ; (c) every person who is deemed to be an assessee in default under any provision of this Act." Clause (29) in section 2 defines the expression "legal representative" in the following words : " 2. (29) 'legal representative' has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908 (5 of 1908)." Section 2(11) of the Code of Civil Procedure defines the said expression as follows : " 2. (11) 'legal representative' means a person who in law represents the estate of a deceased person and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where no notice was served upon the legal representatives and an assessment made. Even before service of any notice, returns were filed by one of the legal representatives [Jai Prakash Singh] voluntarily. The returns were filed by Jai Prakash Singh taking advantage of the provisions contained in sub-section (4) of section 139 ; actually the time for filing the returns had expired by the time they were filed. The violation, if any, was not serious enough to declare the entire proceedings a nullity. Sri N. R. Choudhary, learned counsel for the assessee, on the other hand, submitted that an assessment made on persons without notice to them is a clear case of violation of the principles of natural justice and, hence, the assessments are null and void. Since the proceedings are a nullity in law there was no question of sending the matters back to the Income-tax Officer for making fresh assessments. Learned counsel commended the reasoning and conclusion of the High Court for our acceptance. Before we proceed to answer the question, it is necessary to keep in mind the facts of this case. B. N. Singh died on April 16, 1967. He failed to file a return for the assessment years 1965-66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, for the reason that the said issue is not before us in these appeals. We are of the opinion that the High Court was not right in holding in the above circumstances that the assessment orders made are null and void. They are not. At the worst, they are defective proceedings --- or irregular proceedings --- as has been rightly held by the Appellate Assistant Commissioner and the Tribunal. In Chatturam v. CIT [1947] 15 ITR 302, it has been held by the Federal Court that the liability to pay the tax arises by virtue of sections 3 and 4 of the Indian Income-tax Act, 1922 (charging sections), and that section 22 and other sections of the said Act are merely machinery provisions to determine the quantum of tax. The following observations are apposite (at page 307) : " The income-tax assessment proceedings commence with the issue of a notice. The issue or receipt of a notice is not, however, the foundation of the jurisdiction of the Income-tax Officer to make the assessment or of the liability of the assessees to pay the tax. It may be urged that the issue and service of a notice under section 22(1) or (2) may affect the liability under the penal clauses which provide for failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what was being assessed was the income of his predecessor, the assessment made, though not complying strictly with section 24B (corresponding to section 159 of the present Act), is yet valid. The following observations of Beaumont C.J., are relevant for our purpose (at page 228) : " In this case, the person to be assessed was the late Maharaja, who had died before he was served with any notice under section 22, and, therefore, the provisions of section 24B(2) apply, and the Income-tax Officer was entitled to serve on the executor, administrator or other legal representative of the deceased Maharaja a notice under section 22(2) or under section 34 as the case might be, and then proceed to assess the total income of the deceased Maharaja as if such executor, administrator or other legal representative were the assessee. As observed by the president of the Tribunal in his judgment, the Income-tax Officer made no attempt to observe the provisions of that sub-section. He served the notice on the present Maharaja, without showing in what capacity. But the Tribunal have found, as a fact, that the present Maharaja is the legal representative of the deceased Maharaja, and although it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lal, who objected that he is not the legal representative of the deceased and that the second wife [Aruna Devi] and the other executor are the proper persons to be notified. The Income-tax Officer called for a copy of the will but it was not produced. The Income-tax Officer thereupon completed the assessment describing the assessee as " the estate of the late Sri Rangalal Jajodia by legal heirs and representatives, Sri Shankar Lal Jajodia, son of Rangalal Jajodia, Smt. Aruna Devi, wife of Rangalal Jajodia and her children ". Appeals were preferred by the second wife, Aruna Devi, contending, inter alia, that the assessments having been made without notice to her or the other executor were illegal and invalid. This plea was rejected by the Appellate Assistant Commissioner and the Tribunal, who remitted the matters to the Income-tax Officer to complete the assessments after notice to Aruna Devi. The High Court too rejected the said contention whereupon the matter was brought to this court, which held that the absence of notice to Aruna Devi makes the assessment merely defective but not null and void. It is in this connection that the aforesaid observation was made. This court sustaine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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