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TMI Blog1984 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... question whether the Tribunal was correct in law in holding that the Inspecting Assistant Commissioner had no jurisdiction to pass the order of penalty after April 1, 1976. The reference was answered by this court on July 31, 1980, in the affirmative. On October 27, 1980, the Commissioner of Income-tax filed a petition under section 261 of the Act for certificate for leave to appeal to the Supreme Court. The assessee, Chhedi Lal, it appears, died on March 11, 1977. The notice sent to him in connection with the leave petition was returned unserved. On November 23, 1981, the Commissioner of Income-tax applied for substitution of the widow and the son of the deceased as his legal representatives accompanied with an application under section 5 of the Limitation Act, 1963, for the condonation of delay alleging that prior to August 12, 1981, when the notice was returned unserved, the Department was unaware of the factum of death. Smt. Chhedana, the widow of the deceased assessee, put in a counter-affidavit dated November 28, 1983, wherein she asserted that on February 15, 1971, her husband had executed a registered will in her favour and also that on September 20, 1978, she had put in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the Revenue to a decision of a Division Bench of this court in CIT v. I. D. Varshani [1953] 23 ITR 163 (All). In that case, there was reference under section 66(1) of the Indian Income-tax Act, 1922 (corresponding to section 256 of the Act). The assessee died during the pendency of the reference. The legal representatives of the deceased assessee were not substituted. This court held that Order XXII of the Civil Procedure Code, 1908, has not been made applicable to a reference under section 66 of the old Act. There was no provision either in the Income-tax Act or in the rules made thereunder for bringing their legal representatives on the record nor were there any rules providing for the abatement of the reference in case the legal representatives were not brought on the record within the certain period. It is noteworthy that this decision was given on November 11, 1952, while rule 38A aforementioned was added by the notification dated August 1, 1964, published in the Gazette dated December 5, 1964. Rule 38A was thus not in the picture when that case was decided. If the question were now to arise, rule 38A would need be given effect to, but even that is of no avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the death of that party occurs subsequent, to the petition being filed. In the present case, as mentioned above, the assessee had died prior to the petition filed under section 261 and for this reason also rule 26 is not attracted. The matter can be looked into from another angle also. Chhedi Lal, the assessee, died on March 11, 1977. The appeal filed by him before the Incometax Appellate Tribunal against the order dated January 4, 1977, was pending On September 20, 1978, the objector (the widow of Chhedi Lal, deceased) on her own showing put in an application before the Income-tax Appellate Tribunal intimating that her husband had died in the month of March, 1977, leaving herself besides a son and a daughter as the heirs. She has appended a copy of that application to the counter-affidavit filed in this court, vide Annexure CA.-H. The appeal filed by her husband came to be decided in her favour on November 30, 1978. It is manifest thus that the objector, the legal representatives of the deceased assessee, had notice of the pending appeal ; her husband died and naturally, the learned counsel on her behalf does not disown the benefit derived under that decision. The defence in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les 3 and 4 codify these procedural safeguards translating into statutory requirement one of the principles of natural justice." In a very early decision in Brij Inder Singh v. Lala Kanhai Ram, AIR 1917 PC 156, it was held that substitution of a deceased party's legal representatives in an interlocutory appeal arising from an order made in a suit would enure for the benefit of the suit and no separate application for substitution in the suit need be made. It was in terms held that the introduction of a plaintiff or a defendant at one stage of the suit is an introduction for all stages and that though it was done in the course of an interlocutory application as to the production of books, the same would enure for the benefit of the suit. The ratio of this decision was affirmed in Rangubai Kom Sankar Jagtap v. Sunderabai Bhratar Sakharam Jedhe, AIR 1965 SC 1794, by the Supreme Court holding that if the legal representatives are brought on record within the prescribed time at one stage of the suit, it will enure for the benefit of all the subsequent stages of the suit. In N Jayaram Reddi's case, AIR 1979 SC 1393 also one of the propositions laid by the Hon'ble Desai, J. was at p. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure Code, which pertain to appeal to the Supreme Court. There exists no justification to seek to import Order XXII in a petition under section 261 as in the present case. The objector's learned counsel also made a mention of section 151 of the Civil Procedure Code and urged that the limitation in view of article 137 of the Limitation Act, 1963, is three years. This seems misconceived having no relevance for the purposes thereof. It does not appear how section 151 avails the objector to defeat the contention of the petitioner in this behalf. The petitioner on his part is not required to take resort to section 151 of the Civil Procedure Code for the obvious reason that at the appellate stage, the substitution of the objector is deemed to have been made already and no abatement arises in proceedings under section 261 of the Act. As mentioned above, the objector has asserted that the deceased assessee executed a will in her favour on February 15, 1971. She has also appended copy of that will to her counter-affidavit. Despite time granted, rejoinder affidavit has not been filed to this counter-affidavit for the Revenue. There is no basis consequently to assume that the will rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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