TMI Blog2007 (6) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gift-tax Act and, accordingly, notice under section 16(1) of the Income-tax Act was issued to Smt. Jasbir Kaur. In response to the said notice, she filed a return of 'nil' gift on 10-12005. During the course of assessment proceedings, the assessee claimed that it was a case of inheritance and not that of gift. An oral will in favour of assessee was also pleaded. The Assessing Officer rejected these contentions and computed total value of gift made in assessment year 1995-96 at Rs. 2,40,000. 3. The assessment was challenged in appeal before the learned CIT (Appeals). It was claimed that order passed by GTO was defective both in law and on facts. It was not a case of gift. The notice issued under section 16(1) was also claimed to be issued without jurisdiction. It was alleged that notice was issued at the behest of the audit party. It was also submitted that GTO misunderstood the character of 'transfer' and wrongly charged the same to 'gift'. The learned CIT(A) did not find any force in any of the contentions raised on behalf of the assessee and dismissed her appeal. 4. The assessee being aggrieved has brought the matter in appeal before the Appellate Tribunal. The assessee v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival submissions of the parties. As seen above, the assessee has contended before the learned CIT (Appeals) that jurisdiction to issue notice under section 16(1) was not validly assumed by the GTO. In the additional ground, the assessee is trying to elaborate the point further. The matter can be decided on the basis of material already on record and on consideration of notice issued by the GTO. The plea sought to be raised is bona fide and would advance cause of justice if the same is permitted to be raised. Accordingly, we allow the assessee to raise this additional ground of appeal. In support of this additional ground, the assessee has contended that notice issued under section 16(1) of the Gift-tax Act does not specify as to in what status the said notice was issued. It is addressed as under: "Smt. Jasbir Kaur Bhatia, VPO Dharampur, Teh. Kasauli, Distt. Solan." He contended that notice should have been issued under section 19 of the Gift-tax Act. 7. It is further not made clear in the notice whether the Assessing Officer wished to assess the mother Smt. Gurcharan Kaur through the assessee or the assessee as alleged donee. The learned counsel further argued that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft-tax. Circle, Solan Dated: To Smt. Jasbir Kaur Bhatia, VPO Dharampur Teh. Kasauli Distt. Solan. I have reason to believe that gift chargeable to tax for the assessment year 1995-96 has escaped assessment within the meaning of section 16 of the Gift-tax Act. I, therefore, propose to assess the said gift that has so escaped assessment. I hereby request you to deliver to me not later than. . . . or within 30 days of the receipt of this notice, a return in the attached form of gift chargeable to tax, along with such other particulars as are required to complete the form for the said assessment year.This notice is being issued after obtaining the necessary satisfaction of the Joint Commissioner of Income-tax, Solan Range, Solan. Sd/ (R.C. BEAKTA) Asstt. Commissioner of Gift-tax Circle, Solan." 11. The aforesaid notice is not valid in law. On consideration of relevant provision of Gift-tax Act, it will be clear that notice under section 16(1) can be issued by the Assessing Officer where he has reason to believe that for any assessment year, there has been no assessment of gift or under-assessment of gift. 12. It is a general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly clear that notice to assess gift by a deceased person has to be served on all legal representatives of the deceased unless there is material that one individual represents the entire estate. It cannot be served on anyone, may be the donee, as gift-tax payable on the gift is to be recovered from the estate of the deceased. When estate of the deceased is involved, all the legal representatives interested in such an estate are required to be served the notice. Recovery from estate cannot be made without serving notice to all the persons interested in the estate. The aforesaid proposition is also supported by decision of Andhra Pradesh High Court in the case of Rangapalli Basamma v. GTO [1971] 81 ITR 391, wherein it is observed as under: "Section 19(3) makes sections 13 and 16 applicable to legal representatives. One of the results of the applicability of sections 13 and 16 to a legal representative is the necessity to give notices to all the legal representatives if action is proposed to be taken under section 16 on the ground that the gifts made by a deceased person have escaped assessment. There was no bona fide attempt by the GTO to ascertain the legal representatives of S. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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