2025 (7) TMI 1172 - AT - Income Tax

Reopening of assessment against dead asseesee - tax authorities to issue notice of proceedings under the Act on the correct person i.e. all the legal representatives of the deceased assessee in this case - locus standi as the legal representative of the deceased-assessee) for purpose of invoking this tribunal s sec.254(1) jurisdiction -determination of status of the latter s legal representative at this stage u/sec.2(29) Difference of opinion among the Hon ble Members the matter was referred before the Hon ble President HELD THAT - Third Member after hearing both the parties concurred with the view expressed by the Hon ble Judicial Member held that once the reassessment proceedings are held to be not in accordance with law and are liable to be quashed in view of decision of Hon ble Jurisdictional High Court in light of CIT Vs. Jet Airways (I) Ltd 2010 (4) TMI 431 - BOMBAY HIGH COURT and since the legal heirs had participated in the appeal proceedings there is no need to bring the legal representatives on record in terms of section 159 r.w.s.2(29) of the Act r.w.s.2(11) of CPC issue notice on the legal representatives of the deceased assessee. In consequence of the same and in view of the majority opinion the appeal of the assessee is allowed.

Summary

ISSUES:

Whether the appellant, as the son and legal representative of the deceased assessee, can be denied legal representative status under section 2(29) of the Income Tax Act, 1961 read with section 2(11) of the Code of Civil Procedure, 1908, for purposes of the appeal'Whether the appellant has locus standi as the legal representative of the deceased assessee to invoke the Tribunal's jurisdiction under section 254(1) of the Income Tax Act, despite contradictory findings by the NFAC on his status'Whether the appellant is barred from invoking the Tribunal's appellate jurisdiction under section 254(1) in the absence of other legal heirs of the deceased assessee'Whether an order dismissed as infructuous by the first appellate authority under section 250(6) of the Act due to non-compliance with section 159 read with section 2(29) of the Act is appealable and maintainable under section 253(1)(a) of the Act'Whether an appeal filed without compliance of section 159 read with section 2(29) of the Act is maintainable in law'Whether the appellant is entitled to prosecute the appeal without establishing on record, with cogent evidence, that he solely represents the estate of the deceased assessee among multiple legal heirs'Whether the reassessment proceedings are in accordance with law where the additions made are unrelated to the grounds of reopening of assessment?

RULINGS / HOLDINGS:

The appellant, as the son and legal representative of the deceased assessee, could not be denied status under section 2(29) of the Income Tax Act read with section 2(11) of the CPC at this stage.The appellant could not be held as not having any locus standi as the legal representative to invoke the Tribunal's section 254(1) jurisdiction despite contradictory findings by the NFAC.The appellant is not barred from invoking the Tribunal's appellate jurisdiction under section 254(1) in the absence of other legal heirs.The impugned order dismissed as infructuous under section 250(6) due to non-compliance of section 159 read with section 2(29) is appealable and maintainable under section 253(1)(a) of the Act.An appeal filed without compliance of section 159 read with section 2(29) is not maintainable in law, as per the precedent rendered in Yogesh Bhomraj Ponval Vs PCIT.The appellant is not required to establish on record with cogent evidence that he solely represents the estate of the deceased among other legal heirs to prosecute the appeal.The reassessment proceedings are not in accordance with law and liable to be quashed where no addition has been made on the basis of the reopening grounds, but other unrelated additions were made.

RATIONALE:

The legal framework relied upon includes section 2(29) of the Income Tax Act, 1961 (definition of legal representative), section 159 read with section 2(29) of the Act (procedure for notice to legal representatives), section 254(1) (appellate jurisdiction of the Tribunal), section 250(6) (dismissal of appeal as infructuous), and section 253(1)(a) (appeal to Commissioner of Income Tax (Appeals)).The Tribunal applied the principles established in the jurisdictional High Court decision in CIT vs. Jet Airways (I) Ltd., which held reassessment proceedings are invalid if additions are unrelated to the grounds of reopening.The majority view rejected the Accountant Member's approach requiring all legal heirs to be brought on record and notices issued to them, holding that such requirement should not be used to prolong litigation once one legal heir has participated and the reassessment is quashed.The Tribunal emphasized that contradictory findings by the NFAC on legal representative status cannot deprive the appellant of locus standi under section 254(1).The decision aligns with precedent that non-compliance with procedural requirements under section 159 and section 2(29) may render appeals non-maintainable, but in the present facts, the appeal was held maintainable due to participation of a legal heir and quashing of reassessment.The dissenting view by the Accountant Member was overruled by the majority, which viewed the insistence on strict compliance with section 159 and section 2(29) as a means to unnecessarily prolong litigation and harass the appellant.