1988 (11) TMI 91 - HC - Income Tax

Summary

Issues involved: Validity of assessment order u/s 292B of the Income-tax Act, 1961 and applicability of section 159 regarding legal representative of deceased assessee.

Validity of Assessment Order: The case involved a situation where the original assessee passed away during the assessment proceedings, and the assessment was finalized with the legal heir being impleaded. The Appellate Assistant Commissioner annulled the assessment order on the grounds that it was made on a deceased person. However, the Tribunal reversed this decision, citing section 292B which states that a mistake in an assessment order does not invalidate it if the proceedings are in conformity with the Act's intent and purpose. The Tribunal found that the Income-tax Officer correctly pursued the case against the legal heir, impleading her and providing a hearing, thus the order was not passed on the deceased but on the legal heir. The Tribunal concluded that the clerical error in the heading of the assessment order did not affect the validity of the proceedings.

Applicability of Section 159: Section 159 of the Income-tax Act, 1961 deals with the liability of the legal representative of a deceased assessee. It states that any proceeding taken against the deceased before their death is deemed to have been taken against the legal representative, who becomes the deemed assessee for the purpose of completing the proceedings and tax recovery. The Income-tax Officer followed this procedure correctly in the case at hand. The legal representative is considered the assessee for the completion of proceedings and tax recovery from the deceased's estate. The Tribunal justified restoring the assessment order under section 292B, which protects assessments made in conformity with the Act's intent and purpose.

Conclusion: The High Court upheld the Tribunal's decision, stating that the assessment order was valid despite a clerical error in the heading. The Court emphasized the correct application of section 159 regarding the legal representative of the deceased assessee and the protection provided by section 292B for assessments made in accordance with the Act's intent and purpose. The judgment favored the Revenue and deemed the assessment order valid, rejecting the appeal against it.