Author Topic: Assessement U/s.144 r.w.s. 147 on L/R of the Deceased with out PAN  (Read 8538 times)

ckrao09

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The Assesseing officer completed the assessement on the Legal Representative with out PAN of the Deceased, and raised tax demand. Does the Assessement Valid and if valid how to pay taxes with out PAN of the deceased.

What is the procedure for invoking Legal Representative, of the deceased, if there are four sons and all have inherited the property, which in court of law.

pawansingla

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Re: Assessement U/s.144 r.w.s. 147 on L/R of the Deceased with out PAN
« Reply #1 on: July 16, 2015, 01:15:38 PM »
Honourable ITAT, Ahmedabad in the case of ITO Vs Shri Akhter Nooruddinahmed Saiyed in ITA No. 837/Ahd/2013 has held that assessment made on a dead person would be a nullity in law. For the perusal of your honour, we are reproducing herewith observation of the bench,
“It may be recalled that in the case of Ellis C. Reid v. CIT 5 ITC 100 the Bombay High Court had held that where a person died after the commencement of the assessment year but before his income of the previous year was assessed, his executor was not liable to pay the tax and that if the death occurred while assessment proceedings were pending, the proceedings could not be continued and the assessment could not be made after the person's death: This view of the Bombay High Court led the Legislature to introduce Section 24B in the1922 Act in 1933. Section 24B corresponds to Section 159 of the present Act. The relevant part of Section 159 reads as under:-
159. (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.
(2)   For the purpose of making an assessment (including an assessment, reassessment or recomputation under Section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of Sub-section (1)- (a) 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 the death of deceased;
(b) Any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and
(c) All the provisions of this Act shall apply accordingly.
(3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.
A study of Sub-section (1) of Section 159 clearly shows that it is by a legal fiction created in the provision that the legal representative of a deceased person had been made liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. The legal representative of the deceased, as has been laid down in Sub-section (3) of Section 159 are, by such legal fiction, deemed to be the assessees. Sub-section (2) of Section 159 lays down the conditions of applicability of the provisions of Section 159. Clause (a) of Sub-section (2) says that any proceedings 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 the death of the deceased. For the applicability of this clause the proceedings for making an assessment or for the purpose of levying any sum should have been taken against the deceased in his lifetime and these would be such proceedings which may be continued against the legal representative from the stage at which such proceedings stood on the date of the death of the deceased. Clause (b) of Sub-section (2) says that any proceedings which could have been taken against the deceased if he had survived may be taken against the legal representative. This clause obviously deals with the situation where the proceedings are contemplated to be taken against the estate of the deceased after his death. Since the legal representative of the deceased represents his estate such proceedings may be taken against them. The study of these provisions clearly brings us to hold that only those proceedings for making assessment or levying any sum may be taken against the deceased, so that they may be continued after his death, which have been taken in his lifetime. In his lifetime such proceedings would necessarily be taken against and in the name of the deceased. However, if the deceased had died before any such proceedings could have been taken against him, the proceedings may be taken against the legal representative of the deceased under the provisions of Sub-clause (b) of Sub-section (2) of Section 159. It is clearly inferred that assessment under the Act can only be made against an individual assessee who must be a living person.
In the case of CIT v. Amarchand N. Shroff [1963] 48 ITR 59 the Supreme Court held that the individual has ordinarily to be a living person and there could be no assessment on a dead person. With regard to the legal fiction, as has been created Under Section 159 of the Act, their Lordships of the Supreme Court referring to their earlier decision in the case of Bengal Immunity Co. Ltd. v. State of Bihar (sic.) observed that legal fictions are only for a definite purpose for which they are created and should not be extended beyond that limited field. The same principle was reiterated by the Supreme Court in the case of First Addl. ITO v. Mrs. Suseela Sadanandan [1965] 57 ITR 168 where it was held that on the death of a person the Income-tax Officer has to proceed against the executor and/or legal representative of the deceased. The proposition laid down by the Supreme Court in the above cases was followed by the Calcutta High Court in the case of CIT v. Shantilal C. Mehta [1978] 113 ITR 79 where it was held that on the death of an assessee, his estate remains liable for payment of taxes accruing both before and after his death. After the death of the assessee, the assessment proceedings can only continue in the name of his legal representative. The Andhra Pradesh High Court in the case of CIT v. C.V. Raghava Reddy [1984] 148 ITR 385 following the same principle held that Under Section 159 a proceeding could be continued against the legal representative of the deceased assessee only if it had been initiated when the assessee was alive. It is thus well settled that an assessment made on a dead person would, on the face of it, be a nullity in law.”
TO vs. Late Som Nath Malhotra (ITAT Delhi)

S. 148/ 292BB: Issue of notice in the name of the deceased person renders the assessment order null and void even if the order is passed in the name of the legal heir. The fact that the legal heir attended the proceedings does not make it a curable defect u/s 292BB

The AO issued notice dated 31.03.2010 u/s 148 of the Act in the name of the deceased assessee and also mentioned in the body of the assessment order that the notice u/s 148 of the Act was issued and served upon the assessee by Post within the statutory time period prescribed. Though the legal heir of the deceased assessee informed the AO that the assessee had expired and the return in the name of deceased assessee was filed by the legal heir, the AO did not issue any notice u/s 148 of the Act or 143(2) of the Act in the name of the legal heir. Therefore, the assessment framed by the AO on the basis of the notice issued u/s 148 of the Act in the name of the deceased assessee was invalid and void ab initio