Punjab-Haryana High Court
Swaran Kanta vs Commissioner Of Income-Tax on 16 November, 1988
Equivalent citations: [1989]176ITR291(P&H)
JUDGMENT Gokal Chand Mital, J.
1. The Income-tax Appellate Tribunal, Amritsar, has referred the following question for the opinion of this court:
"Whether, in the circumstances and facts of the case, the Tribunal is correct in holding that the assessment order as passed by the Income-tax Officer is a valid assessment ?"
2. For the assessment year 1975-76, Sain Dass Abbi filed a return of his income on September 4, 1975, which he later on revised. However, during the pendency of the assessment proceedings, he died on March 7, 1977. In the assessment proceedings, his widow, Smt. Swaran Kanta, was impleaded and notice was issued to her as legal heir of the deceased. In her presence, assessment was finalised on March 10, 1978. In the assessment order which was passed, the fact of death of the original assessee and bringing on record the legal heir, issue of notice to her and taking proceedings in her presence were all noticed. However, in the heading of the order, which is generally prepared by the office people, against item No. 2, the name of the assessee was shown as Sain Dass Abbi, instead of mentioning Sain Dass Abbi, deceased through his legal heir, Smt. Swaran Kanta. Smt. Swaran Kanta, his legal heir, filed an appeal against the assessment order and claimed that the same be declared null and void as it was made on a dead person. The Appellate Assistant Commissioner agreed with this, vide order dated August 26, 1978, and annulled the assessment.
3. On the Revenue's appeal to the Tribunal, the order of the Appellate Assistant Commissioner was reversed and the order of the Income-tax Officer stood restored with the following observations :
"Drawing our attention to the provisions of Section 292B which was inserted in the statute with effect from October 1, 1975, Shri Bali argues that the name of the deceased was written in the assessment order simply by virtue of a mistake which is covered by the provisions of Section 292B. His argument is that the proceedings in this case being in substance and effect in conformity with and according to the intent and purpose of this Act, the order will not become invalid simply by virtue of the mistake which is fully covered by the provisions of Section 292B. We agree with him that the proceedings are in substance and effect in conformity with and according to the intent and purpose of the Act. The intent of the Act is that when an assessee dies, the case be pursued against his legal heir. The Income-tax Officer followed the same course. When the assessee, Shri Sain Dass Abbi died, he impleaded Swaran Kanta as legal heir of the deceased and gave a hearing to her through her son being her representative in the case. If the Income-tax Officer were to make an order on the deceased, he would not have impleaded his legal heir and would not have given any hearing to her. The fact that Smt. Swaran Kanta was impleaded as legal heir and the hearing was given to her makes it clear that the Income-tax Officer did not intend to pass the order on the deceased but he wanted to make the assessment on the legal heir. Admittedly, Smt. Swaran Kanta is the legal representative of the deceased.
The situation would have been different if the Income-tax Officer had not impleaded the legal heir and if he had not given any hearing to the legal heir. In that event, it could have been said that the order was passed on the deceased. Since the legal heir was impleaded and she was heard, it could not be said that the order was passed on the deceased. The order would be deemed to have been passed on the person who was heard. In the instant case, the legal heir was heard by the Income-tax Officer through her representative. The Appellate Assistant Commissioner has proceeded on the assumption that the order was passed on the dead person. From the facts of the case, it is clear that the order was not passed against the dead person. No doubt, an order passed on a dead person is null and void but in the case in hand, the order was not passed on the dead person but on the legal heir of the deceased. We agree with the departmental representative that merely by virtue of a mistake, the name of the deceased was written at the top of the assessment order. It is simply a clerical error which has no adverse effect on the proceedings within the meaning of Section 292B."
4. We are of the opinion that the Tribunal came to the correct conclusion. There is clearly a clerical error or omission in the heading of the assessment order. The correct description of the assessee to be given in the heading against item No. 2 should have been Sain Dass Abbi, deceased, through Smt. Swaran Kanta, legal heir. It has to be seen whether an order could be read to mean to the aforesaid effect on the peculiar facts of this case. Section 159 of the Income-tax Act, 1961 (for short "the Act"), relates to the liability of the legal representative of the deceased assessee. According to Section 159(2)(a) of the Act, any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of death of the deceased and for completing the proceedings by virtue of Section 159(2)(c) of the Act, the provisions thereof are to be applied accordingly, Sub-section (3) of Section 159 of the Act further provides that the legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. Therefore, the deceased is an original assessee and the legal representative becomes the deemed assessee for the purposes of completion of the proceedings and for recovery of any tax from the estate of the deceased in the hands of the legal representative. The Income-tax Officer followed the procedure correctly as provided by Section 159 of the Act and completed the proceedings.
5. Section 154 of the Act authorises the income-tax authority, referred to in Section 116 of the Act, to rectify any mistake apparent from the record and amend the order accordingly. The slight mistake, if any, could be rectified under this provision. The law-framers were not satisfied with this provision alone and inserted Section 292B of the Act, which came into effect from October 1, 1975. It, inter alia, provided that an assessment made in pursuance of any of the provisions of the Act shall not be invalid nor deemed to be invalid merely by reason of any mistake, defect or omission in the assessment if the assessment is in substance and effect in conformity with or according to the intent and purpose of the Act. As already noticed, the entire proceedings were conducted after the death of the original assessee in accordance with law. After death, the legal representative is also deemed to be an assessee. Therefore, the title of the order, which was not happily worded, would not make the assessment order invalid as was sought to be declared by the Appellate Assistant Commissioner. The Tribunal was fully justified in restoring the order of assessment in exercise of its powers under Section 292B of the Act.
6. Learned counsel for the assessee has cited some cases to support the order of the Appellate Assistant Commissioner but none of those cases is close or relevant to the facts of this case, and, therefore, it would be futile to notice or discuss them.
7. For the reasons recorded above, we answer the question in the affirmative, that is, in favour of the Revenue and against the assessee but with no order as costs.