Punjab-Haryana High Court
Commissioner Of Income-Tax vs Smt. Asha Rani (Legal Heir Of Pran Nath ... on 26 August, 1996
Equivalent citations: [1997]226ITR881(P&H)
Author: Ashok Bhan
Bench: Ashok Bhan
JUDGMENT N.K. Agrawal, J.
1. By this application, under Section 256(2) of the Income-tax Act, 1961 (for short "the Act"), the Commissioner of Income-tax has sought a direction to the Income-tax Appellate Tribunal (for short "the Tribunal"), to refer the following two questions of law relating to the year 1988-89 :
" 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in annulling the assessment ?
2. Whether, on the facts and in the circumstances of the case, the findings of learned Income-tax Appellate Tribunal are not perverse ?"
2. The assessee, in the status of an individual, carried on the business of manufacture and sale of rubber chappals, etc., under the name and style of Parbhat Rubber Industries. The accounting year ended on March 31, 1988. A search and seizure operation took place under Section 132 of the Act at the residential premises of the assessee on October 19, 1987. The return of income was filed by the assessee, Pran Nath Dhawan (since deceased), on June 9, 1988, for the assessment year 1988-89 showing an income of Rs. 95,858. A revised return was filed on February 4, 1991, by Smt. Asha Rani, widow and legal heirs of Shri Pran Nath Dhawan, showing the income of Rs. 1,87,590. The assessment was made on December 31, 1992, on an income of Rs. 11,16,700.
3. The assessee went on appeal and raised a legal issue before the Commissioner of Income-tax that the assessment had been framed against a dead person and was, therefore, void ab initio. The plea, however, did not find favour with the Commissioner who noticed that initially notice had been issued by the Assessing Officer to the assessee, the late Pran Nath Dhawan, on September 19, 1988, but thereafter notices had also been issued by the earlier Income-tax Officer to the legal heirs of the deceased assessee. The Commissioner of Income-tax (Appeals) took the view that though the assessment had been framed in the name of Pran Nath Dhawan but that was a mistake which cannot be said to be fatal and so rectifiable as an irregularity. The representation had been duly made on behalf of the legal heirs before the Assessing Officer.
4. Smt. Asha Rani, the legal heir of the deceased assessee, challenged the order of the Commissioner of Income-tax (Appeals) before the Tribunal with the plea that no assessment could be framed against a dead person. The Tribunal took the view that, since the revised return was substituted for the original return, the assessment could be framed only against the legal heirs who had filed the revised return. Since the assessment had been framed against the deceased assessee, it was annulled.
5. Shri R.P. Sawhney, senior advocate, learned counsel for the petitioner, has argued that the revised return had been filed by the widow of the deceased assessee and, therefore, the widow, being the legal heir was duly represented at the time of assessment. Notices had been duly issued by the Assessing Officer under Sections 142(1) and 143(2) of the Act on October 30, 1991, November 14, 1991 and March 2, 1992, to the legal heirs. It is stated that the annulment was not at all valid inasmuch as the assessment had been completed on the basis of the revised return and in the presence of the legal heirs.
6. From the controversy as emerging from the facts of the case, the Income-tax Appellate Tribunal is directed to state the case and refer the following" question of law to this court for opinion :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in annulling the assessment ? Ordered, accordingly. No costs.