TMI Blog1996 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... the ten legal representatives of the deceased, Shri B. N. Singh, did not invalidate the assessment orders of the Income-tax Officer relating to the assessment years 1965-66, 1966-67 and 1967-68 and that it was at best an irregularity for which the Appellate Assistant Commissioner was justified in setting aside the assessments and it was not a case fit for cancellation of the assessments ? " One B. N. Singh, had extensive business interests. He did not file a return for the assessment years 1965-66, 1966-67 and 1967-68. He died on April 16, 1967. He left behind ten legal representatives comprising three widows, four sons and four daughters. The eldest son, Jai Prakash Singh, filed the returns for the said three assessment years on March 17, 1970, November 12, 1970, and October 27, 1971, respectively. The returns were signed by Jai Prakash Singh alone --- not by the other legal representatives. In these returns, Jai Prakash Singh disclosed the income received by the late B. N. Singh from all his business interests and properties, (It may be emphasised that B. N. Singh died after the close of the accounting year relevant to the assessment year 1967-68 --- in fact, sixteen days afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, the orders of assessment made by the Income-tax Officer without notice to all the legal representatives of B. N. Singh are null and void in law or merely irregular/defective proceedings which can be set right by remitting the matters to the Income-tax Officer for making fresh assessments with notice to all legal representatives. The expression "assessee" is defined in clause (7) of section 2 in the following words : " 'assessee' means a person by whom any tax or any other sum of money is payable under this Act, and includes (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person ; (b) every person who is deemed to be an assessee under any provision of this Act ; (c) every person who is deemed to be an assessee in default under any provision of this Act." Clause (29) in section 2 defines the expression "legal representative" in the following words : " 2. (29) 'legal representative' has the meaning assigned to it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability." Dr. Gauri Shankar, learned counsel for the Revenue, contended that in the facts and circumstances of the case the assessment orders cannot be said to be null and void. At worst, they are irregular orders. This is not a case where no notice was served upon the legal representatives and an assessment made. Even before service of any notice, returns were filed by one of the legal representatives [Jai Prakash Singh] voluntarily. The returns were filed by Jai Prakash Singh taking advantage of the provisions contained in sub-section (4) of section 139 ; actually the time for filing the returns had expired by the time they were filed. The violation, if any, was not serious enough to declare the entire proceedings a nullity. Sri N. R. Choudhary, learned counsel for the assessee, on the other hand, submitted that an assessment made on persons without notice to them is a clear case of violation of the principles of natural justice and, hence, the assessments are null and void. Since the proceedings are a nullity i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Commissioner and thereafter before the Tribunal. It appears rather curious that Jai Prakash Singh who had voluntarily filed the returns of income should raise this issue ; no other legal representative of B. N. Singh has come forward with such a plea. We do not wish to go into the question whether jai Prakash Singh should at all have been allowed to so turn round and raise this plea in appeal, for the reason that the said issue is not before us in these appeals. We are of the opinion that the High Court was not right in holding in the above circumstances that the assessment orders made are null and void. They are not. At the worst, they are defective proceedings --- or irregular proceedings --- as has been rightly held by the Appellate Assistant Commissioner and the Tribunal. In Chatturam v. CIT [1947] 15 ITR 302, it has been held by the Federal Court that the liability to pay the tax arises by virtue of sections 3 and 4 of the Indian Income-tax Act, 1922 (charging sections), and that section 22 and other sections of the said Act are merely machinery provisions to determine the quantum of tax. The following observations are apposite (at page 307) : " The income-tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities under the Act as well as by the High Court on a reference. The Division Bench comprising Beaumont C. J. and Kania J. held that inasmuch as the present Maharaja (who raised the contention of nullity) was the legal representative of the late Maharaja of Patiala and because the return of the late Maharaja's income was made by the Foreign Minister on his behalf and because he knew perfectly well that what was being assessed was the income of his predecessor, the assessment made, though not complying strictly with section 24B (corresponding to section 159 of the present Act), is yet valid. The following observations of Beaumont C.J., are relevant for our purpose (at page 228) : " In this case, the person to be assessed was the late Maharaja, who had died before he was served with any notice under section 22, and, therefore, the provisions of section 24B(2) apply, and the Income-tax Officer was entitled to serve on the executor, administrator or other legal representative of the deceased Maharaja a notice under section 22(2) or under section 34 as the case might be, and then proceed to assess the total income of the deceased Maharaja as if such executor, administrator or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Before the assessments were completed, he died (on January 11, 1946). Rangalal had a son, Shankar Lal, by his pre-deceased wife. He married a second time and had children from the second wife, Aruna Devi. Rangalal executed a will totally disinheriting Shankar Lal and appointing Aruna Devi and another as executors of his will. The Income-tax Officer, probably unaware of the will, gave notice to Shankar Lal, who objected that he is not the legal representative of the deceased and that the second wife [Aruna Devi] and the other executor are the proper persons to be notified. The Income-tax Officer called for a copy of the will but it was not produced. The Income-tax Officer thereupon completed the assessment describing the assessee as " the estate of the late Sri Rangalal Jajodia by legal heirs and representatives, Sri Shankar Lal Jajodia, son of Rangalal Jajodia, Smt. Aruna Devi, wife of Rangalal Jajodia and her children ". Appeals were preferred by the second wife, Aruna Devi, contending, inter alia, that the assessments having been made without notice to her or the other executor were illegal and invalid. This plea was rejected by the Appellate Assistant Commissioner and the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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