Punjab-Haryana High Court
Commissioner Of Income Tax vs Smt. Asha Rani. on 26 August, 1996
Equivalent citations: (1998)146CTR(P&H)541
ORDER
N. K. AGRAWAL, J. :
By this application, under s. 256(2) of the IT Act, 1961 (for short, the Act), the CIT has sought a direction to the 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 the learned 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 M/s. Parbhat Rubber Industries. The accounting year ended on 31st March, 1988. A search and seizure operation took place under s. 132 of the Act at the residential premises of the assessee on 19th October, 1987. Return of income-tax was filed by the assessee, Pran Nath Dhawan (since deceased), on 9th June, 1988 for the asst. yr. 1988-89 showing income of Rs. 95,858. A revised return was filed on 4th February, 1991 by Smt. Asha Rani, widow and L/H of Shri Pran Nath Dhawan, showing income of Rs. 1,87,590. Assessment was made on 31st December, 1992 on an income of Rs. 11,16,700.
The assessee went in appeal and raised a legal issue before the CIT 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 CIT (A) who noticed that initially notice had been issued by the AO to the assessee, the late Pran Nath Dhawan, on 19th September, 1988 but thereafter notices had also been issued by the earlier ITO to the legal heirs of the deceased assessee. The CIT (A) 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. Representation had been duly made on behalf of the legal heirs before the AO.
Smt. Asha Rani, the legal heir of the deceased-assessee, challenged the order of the CIT (A) 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, 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.
3. 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 AO under s. 142(1) and 143(2) of the Act on 30th October, 1991, 14th November, 1991 and 2nd March, 1992 to the legal heirs. It is stated that annulment was not at all valid inasmuch as assessment had been completed on the basis of the revised return and in the presence of the legal heirs.
4. From the controversy as emerging from the facts of the case, the 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.