TMI Blog1997 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act. 2. The brief facts of the case which are relevant for the disposal of these petitions may be set out as hereunder: 3. The petitioner in both the petitions was a member of the HUF consisting of himself and his wife Smt. Godavari Bai and they were assessed as HUF till the asst. yr. 1991-92. The said Godavari Bai expired on 19th Sept., 1991. The return for the asst. yr. 1991-92 was filed on 30th Dec., 1991 declaring total income of Rs. 1,49,960 in the status of HUF. Return for the asst. yr. 1992-93 was filed on 8th Feb., 1993 declaring total income of Rs. 77,390 in the status of HUF. The returns filed by the petitioner for the years 1991-92 and 1992-93 were processed by the first respondent on 22nd March, 1993, accepting the income shown in the returns filed and an intimation under s. 143 (1)(a) was issued to the petitioner along with the challan for Rs. 16,154 for the asst. yr. 1991-92 and intimation was also issued for the asst. yr. 1992-93 along with the challan for Rs. 3,645. 4. Aggrieved by the intimation issued by the first respondent, as stated above for the asst. yrs. 1991-92 and 1992-93, the petitioner filed two applications seeking for rectification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the learned Senior Counsel, since it was the case of the petitioner that the intimation given was one without the authority of law and the petitioner was not liable to be assessed for tax and the petitioner was not liable to pay the amount in question, the question of petitioner paying amount in question before filing the appeal did not arise for consideration and therefore the interpretation placed by the second respondent on sub-s. (4) of s. 249 of the Act is erroneous in law. 7. Sri M.V. Seshachala, learned counsel appearing for the respondents strongly supported the orders impugned. He submitted that the first respondent has accepted the returns filed and consequently sent the intimation to the petitioner asking him to pay the balance tax after adjusting advance tax as per the return submitted and, therefore, no fault can be found with regard to the intimation issued by the first respondent in exercise of the power conferred on him under s. 143(1) (a) of the Act. Therefore, he would further submit that the first respondent was also fully justified in rejecting the applications filed for rectification of the intimation issued under s. 154 of the Act. It is his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of advance tax which was payable by him: Provided that, in a case falling under cl. (b) and on an application made by the appellant in this behalf, the Dy. CIT(A) or, as the case may be, the CIT(A) may, for any good and sufficient reason to be recorded in writing, exempt him from the operation of the provisions of that clause". Sub-s. (4) of s. 249 of the Act, extracted above, provides that no appeal under Chapter XX is admitted unless at the time of filing of the appeal, where the return is filed by the assessee, the assessee has paid the tax due on the income, or where no return has been filed by the assessee, the assessee has paid an amount equal to the amount of the advance tax which was payable by him. 10. Relying upon cl. (a) of sub-s. (4) of s. 249, Sri Seshachala submitted that since the petitioner has filed the return and as per the return filed the petitioner was liable to pay the tax notified in the intimation issued and the same has not been paid, the appellate authority was justified in not admitting the appeal on the ground that the petitioner has not paid the tax due on the income returned by him. I am unable to accept the submission of Sri Seshachala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be quashed. 11. So far as the second question is concerned, I find considerable force in the submission of Sri Sarangan, learned senior counsel appearing for the petitioner. In the case of CWT vs. G.E. Narayana , this Court while considering the provisions of the WT Act, took the view that the existence of the assessee as an HUF at the time of making the assessment order was an absolute necessity and where it is not in existence, in the absence of specific provisions to assess the income of the erstwhile HUF, it is not permissible to assess the erstwhile HUF or a member of the erstwhile HUF. In the present case, admittedly, Smt. Godavari Bai who was a member of the HUF expired on 19th Sept., 1991. No doubt, return of income for the asst. yrs. 1991-92 and 1992-93 were filed on 31st Dec., 1991 and 8th Feb., 1993 respectively i.e., after the death of Smt. Godavari Bai, treating the status of the assessee as HUF as was done for the earlier period. The first respondent accepting the return filed by the petitioner issued intimations as per Annexures B and C for the years 1991-92 and 1992-93. The petitioner aggrieved by the intimations, Annexures B and C, filed applications under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return was also not altered. The only point which was not taken into consideration was the note of the assessee in the statement of total income, since it has nothing to do with the adjustment under s. 143(1)(a), the intimation under s. 143(1)(a) was accordingly issued for the tax on the income returned by the assessee". 12. Similar is the view expressed in Annexure G for the year 1992-93. The first respondent further proceeded to distinguish the decision of this Court in the case of CWT vs. G.E. Narayana on the ground that the facts of the said case are different from the facts of the present case, inasmuch as, in the case of CWT vs. G.E. Narayana the return was filed at the time when the HUF was still in existence, but was reduced to a singular member at the time of passing of the assessment, whereas in the case of the petitioner, the return itself was filed when the HUF consisted of only one member. I am of the view that both the reasons assigned by the first respondent refusing to rectify the intimations issued are unsustainable in law and in that view of the matter I am unable to accede to the strenuous submissions made by Sri Seshachala in support of the orders imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the valuation date under the WT Act, an order of assessment cannot be made if there is no HUF on the said date. In the said decision, this Court, at page 47, has observed thus : "The forerunner to this principle is found in the decision of the Bombay High Court in Ellis C. Reid vs. CIT AIR 1931 Bom 333 : (1930) 5 ITC 100, wherein the Bombay High Court held that, when a person died after the commencement of the assessment year but before his income for the relevant accounting year was assessed, his executor was not liable to pay the tax. After this decision, s. 24B was introduced in the earlier IT Act, 1922 (similar to the present s. 159). That the existence of the assessee at the time of the assessment order is an absolute necessity is a matter which has been recognised in all these decisions and if the assessee is not in existence, there should be a specific provision to assess the said income which was liable to be taxed under the provisions of the IT Act. The same logic governs the WT Act also. In CWT vs. Keshub Mahindra (1983) 139 ITR 22 (Bom), the Bombay High Court has pointed out the distinction between the IT Act and the WT Act and there is an observation that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or continued against a proper successor. Sec. 19 is one such provision which enables the initiation of proceedings against the legal representatives of the deceased person who was liable to pay the tax under the Act. Secs. 19A, 20 and 21 are also enacted to provide for certain similar contingencies. But, nowhere is a provision found in the Act, enabling the AO to make an order of assessment against the person who succeeded to the wealth of an erstwhile HUF which was in existence on the date of the valuation date, but ceased to exist by the time the order of assessment is made, the said cessation being due to natural causes as happened in the instant case. Sec. 20 covers an entirely different field wherein the HUF ceases to exist by act of parties". 15. The first respondent has also distinguished the decision of this Court in the case of CWT vs. G.E. Narayana on the ground that in the said case on the date of filing of the return the HUF was in existence and the same ceased to exist at the time of passing an order of assessment, which is not the position in the present case. I am of the view whether the HUF was in existence on the date of filing of the return and ceased to be i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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