1999 (9) TMI 67 - HC - Income Tax

Summary

Issues involved: Interpretation of section 159 of the Income-tax Act, 1961 regarding legal heir's responsibility for deceased's default; Validity of Tribunal's remand order; Legality of Tribunal's action in sending matter back to Assessing Officer; Compliance of law in Tribunal's appeal disposal; Perversity of Tribunal's finding on illness plea timing.

Interpretation of section 159 - The High Court considered the case where the legal heir was held responsible for the deceased's default under section 159 of the Income-tax Act, 1961. The Tribunal had remanded the matter back to the Assessing Officer to investigate the deceased's illness plea raised for the first time. The Court upheld the legal heir's responsibility for the default and deemed the legal representative to be an assessee u/s 159. The Court found the legal heir liable for penalties limited to the estate inherited.

Validity of Tribunal's remand order - The Court reviewed the Tribunal's decision to remand the matter back to the Assessing Officer due to the illness plea raised for the first time. It was noted that the Tribunal was justified in remanding the case for further investigation into the deceased's illness, as such factual inquiries are not typically conducted at the second appeal stage.

Legality of Tribunal's action - The Court examined whether the Tribunal acted legally in sending the matter back to the Assessing Officer after acknowledging the deceased's illness. While the Tribunal accepted the illness, the exact period and severity were not clearly established, leading the Court to support the Tribunal's decision to remand the case for further clarification.

Compliance with law in appeal disposal - The Court confirmed that the Tribunal's disposal of the appeal was in accordance with the law, finding no illegality in the order issued by the Tribunal.

Perversity of Tribunal's finding - The Court addressed the challenge to the Tribunal's order regarding the timing of the illness plea. It was observed that the plea was not raised before the Assessing Officer or the Commissioner of Income-tax (Appeals) during the penalty proceeding. Consequently, the Court deemed the Tribunal's finding not perverse.

Conclusion: The High Court upheld the legal heir's responsibility for the deceased's default u/s 159, supported the Tribunal's remand order for further investigation into the deceased's illness plea, and found no illegality in the Tribunal's actions or disposal of the appeal. The Court also rejected the challenge to the Tribunal's finding on the timing of the illness plea.