TMI Blog1970 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ven questions were referred to the High Court. The reference involved, first, the construction of the second proviso to sub-section (3) of section 34 of the Act, and, secondly, the applicability of section 24B(3) of the Act to the assessments made on the executor to the estate of late Rangalal Jajodia. In order to appreciate the scope of the reference, it is necessary to refer to the facts which gave rise to the questions. Rangalal Jajodia (hereinafter referred to as " the deceased ") filed income-tax returns for the years 1942-43 and 1943-44 as well as his excess profits tax returns for the corresponding chargeable accounting periods ending December 31, 1941, and December 31, 1942, before the Income-tax Officer, Excess Profits Tax Officer, Madras, Special South Circle. On receipt of the returns, the officer issued the requisite statutory notices to the assessee for production of accounts and also other evidence in support of the returns under sections 22(4) and 23(2) of the Act and under the corresponding provisions of section 30 of the Excess Profits Tax Act, 1940. Rangalal Jajodia complied with the aforesaid notice. But before the assessments to the income-tax and excess prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t necessary to go through all the formalities once again and that the assessments were required to be done only for the purpose of inviting objections, if any, to the locus standi of Aruna Devi as the legal representative of the deceased. On the said view the Revenue Officer completed the income-tax and excess profits tax assessments on the estate of late Rangalal jajodia by executors, Mrs. Aruna Devi and another. The assessments were made on October 29, 1952, more than four years after the end of the assessment years 1942-43 and 1943-44 respectively. The executrix, Aruna Devi, appealed against the assessments contending before the Appellate Assistant Commissioner that the assessments were barred by limitation and that the previous Appellate Assistant Commissioner's direction to make assessments on her was invalid. It was also contended that reasonable opportunities were not given to Aruna Devi before the assessments were made. The Appellate Assistant Commissioner on April 16, 1955, held that the assessments were validly made on a valid direction by the previous Appellate Assistant Commissioner. He however, set aside the assessments directing the Revenue Officer to complete them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such procedure was followed during the lifetime of the deceased. The relevant provisions of section 34(3) of the Act necessary for the purpose of the present appeals are the second proviso to the said sub-section. The said second, proviso is as follows : " Provided further that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made, shall apply to a reassessment made under section 27 or to an assessment or reassessment made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 31, section 33, section 33A, section 33B, section 66 or section 66A. " Counsel for the revenue in C. A. Nos. 2336 to 2339 of 1966 contended that the second proviso saved the assessment from the bar of limitation by reason of an order of assessment having been made in consequence of a finding or direction given by the Appellate Assistant Commissioner, and, secondly, that Aruna Devi was a person intimately connected with the assessment and that in fact the assessment was made on her, but the assessment was set aside because no notice was giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eirs and representatives. It cannot be denied that an executor is also a legal representative. what happened in the present assessment proceedings was that the proceedings were commenced during the lifetime of Rangalal Jajodia by reason of the returns being filed by and notices under sections 22(3) and 23(2) of the Act having been served on Rangalal Jajodia during his lifetime. The assessment order contains intrinsic evidence to that effect as also of repeated intimation having been given to Shankarlal Jajodia after the death of Rangalal Jajodia. No reply having been received from Shankarlal Jajodia, the assessment was completed under section 24B of the Act through the legal heirs and representatives including Aruna Devi. The Appellate Assistant Commissioner on an appeal preferred by Shankarlal Jajodia set aside the assessment because no notice was given to Aruna Devi though the assessment proceeding was against her as a legal representative. The lack of a notice does not amount to the revenue authority having had no jurisdiction to assess, but that the assessment was defective by reason of notice not having been given to her. An assessment proceeding does not cease to be a proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the year 1948-49, was not a finding necessary for the disposal of an appeal in respect of the year of assessment in question. Counsel for Aruna Devi contended that the expression " any person " occurring in the second proviso to section 34(3) of the Act could not be referable to a stranger and that Aruna Devi was a stranger. In support of that proposition reliance was placed on the decision of this court in S. C. Prashar v. Vasantsen Dwarkadas. The facts of that case are entirely different and are of no assistance for the reason that in the present appeals Aruna Devi was impleaded as a party to the assessment proceedings as a legal representative of Rangalal Jajodia. The words " any person " were construed in Murlidhar's case , to be confined to a person intimately connected with the assessment year under appeal. It was said in that case that : " Modification or setting aside of assessment made on a firm, joint Hindu family, association of persons, for a particular year may affect the assessment for the said year on a partner or partners of the firm, Member or members of the Hindu undivided family or the individual, as the case may be. In such cases though the latter are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court correctly held that section 24B of the Act applies to the present case. The third sub-section of section 24B deals with a case of a person dying after having furnished a return. Further, in the present case the Income-tax Officer had reason to believe the return to be incorrect or incomplete, and he called upon the deceased to furnish evidence. The Act further confers power on the revenue to make the assessment and determine the tax payable by the deceased on the basis of the assessment and for that purpose to issue approriate notice which would have had to be served upon the deceased had he survived and in that behalf to require from the executor, administrator or other legal representative of the deceased person any accounts, documents or other evidence which he might under the provisions of sections 22 and 23 require from the deceased person. These provisions adequately answer the contention of the appellant, Aruna Devi. For these reasons we hold that the High Court was in error in holding that the second proviso to section 34(3) of the Act did not save the assessments and, therefore, we set aside the judgment of the High Court and allow the appeals of the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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