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TMI Blog1991 (12) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... anted interim injunction. The deceased made a will on 15-4-1991 bequeathing his property to the trustees to hold the same for the purposes stated in the said will. The will was probated on 6-7-1984 in Probate Case No. 121 of 1983. The deceased had two wives. The first wife died on 6-8-1983 and the second died on 26-3-1981. The writ was dismissed on 25-9-1985 i.e., after the death of the deceased. No return was filed by the deceased as the writ petition was pending. The trustees also did not file any return of income. The assessment was, therefore, made on the trustees on 27-3-1986 under section 144 and no further appeal was filed against the assessment order. The ITO issued two notices under section 274 dated 27-3-1986 for the defaults comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986 the ITO wanted an explanation from the trustees for the default committed by the deceased under section 18(1)(a). Whereas section 18(1)(a) does not speak of any imposition of any penalty for any default. Since all the trustees are considered as legal representatives by virtue of section 159 of the Income-tax Act they should have been heard under section 274 and therefore, served with hearing notices as is mandatorily laid down under section 282 of the Income-tax Act. Therefore, the learned counsel for the assessee submits that the penalty orders were contrary to the mandatory provision of section 274 of the Income-tax Act ; since no return was filed by the deceased or by the trustees even till today and, therefore, the default has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal representatives of the deceased he relies on the judgment of the Gauhati High Court in the case of Jai Prakash Singh v. CIT [1978] 111 ITR 507. The learned departmental representative, on the other hand, relied on the orders of the lower authorities and states that since they are deemed as assessees under section 159 they should answer the default of the deceased. After hearing both the parties and perusing the case law cited before us we see much force in the argument of the learned counsel for the assessee. It is really true that the trustees who are the legal representatives of the deceased and deemed as assessees under section 159 cannot answer and explain the reasons and causes the deceased might have had and he has taken it along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of income or for furnishing of inaccurate particulars of income. We agree with the learned counsel for the assessee that the said notices are ambivalent and vague and the ITO has not specifically and precisely brought out the alleged default committed by the deceased for which he intended to penalise the trustees as legal representatives. The provisions of section 271(1)(c) clearly lay down that the ITO should be satisfied during the course of assessment proceedings about the commission of a precise default. From the contents of the notice under section 274 referred to above we find that the ITO was not sure which default was committed by the deceased for which he intended to penalise the trustees. Thus, the basic and essential requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal principle of criminal jurisprudence that a crime dies with the man which can also apply to quasi-criminal proceedings that is to say the penalty proceedings under the Income-tax Act, 1961. We are sure the Legislature while enacting the provision of section 159(2) did not intend that the legal representatives of the deceased should be penalised under the provision of the Income-tax Act in respect of offences which are quasi-criminal in nature, if any, committed by a deceased person during his life time. We are, therefore, of the opinion that while section 159(2)(b) authorises continuation of proceedings against the legal representatives which could have been taken against the deceased had he survived do not by any stretch of argument me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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