Shahid Atiq L/H Of Late S.H. ... vs Commissioner Of Income Tax
2005 Latest Caselaw 1579 Del

ORDER

1. The assessed, late S.H- Atiquer Rehman, had filed returns for the asst. yrs. 1992-93 and 1993-94 declaring an income of Rs. 65,000 for the asst. yr. 1992-93 and Rs. 72,580 for the asst. yr. 1993-94. The returns were processed under Section 143(l)(a) of the IT Act. Shri S.H. Atiquer Rehman passed away on 9th Feb., 1997. A notice under Section 148 was issued to the appellant Sh. Shahid Atiq, son of the deceased assessed, on 26th March, 1997, which was served upon him on 27th March, 1997, proposing to reopen the assessment for both the assessment years mentioned earlier. The appellant, it is common ground, appeared before the AO through Sh. R. Balasubramanian, chartered accountant, and furnished the requisite explanations which were taken into consideration and a reassessment order made by the AO for both the assessment years determining the taxable income of the deceased assessed at Rs. 2,25,550 for the asst. yr. 1992-93 and Rs. 2,30,630 for the asst. yr. 1993-94.

2. Aggrieved by the said orders, the appellant preferred appeals before the CIT(A) inter alia, contending that since a notice had not been issued to other legal heirs left behind by the deceased assessed namely, his widow, sons and daughter, the orders of reassessment made by the AO were illegal and unsustainable. The CIT(A) found favor with that contention and allowed the appeals. The reassessment, orders were on that reasoning annulled by the CIT(A). The Revenue assailed the said orders before the Tribunal reported as ITO v. Shahid Atiq L/H of Late Atiquer Rehman (2004) 82 TTJ (Del) 429--Ed. who relying upon the decisions of the Supreme Court in CIT v. Jai Prakash Singh , Estate of Late Rangalal Jajodia v. CIT and A.K.M. Govinda Swamy Chettiar and Ors. v. ITO held that non-service of notice upon all the LRs of the deceased assossee was an irregularity which was curable and not an illegality sufficient for annulling the assessment or reassessment proceedings.

3. We have heard Mr. Prakash Kumar, learned Counsel for the appellant, and Mr. Jolly appearing for the respondent. The material facts are not in dispute before us. That returns for the assessment under question had been filed by the deceased assessed S.H. Atiquer Rehman and duly processed is not in dispute. It is also not disputed that after the death of the deceased assessed, the AO had issued a notice under Section 148 proposing to reopen the assessments and served the same upon the appellant who happens to be one of the LRs left behind by the deceased assessed. It is also common ground that the appellant had pursuant to the service of notice upon him, appeared before the AO and provided the requisite explanations with the help of his chartered accountant. The plea regarding non-service of notices upon other LRs was not at any stage advanced before the AO. The same was urged by the appellant for the first time in appeal before the CIT(A) who had permitted an additional ground to be urged at that stage. The Tribunal has in our view correctly held that the matter stands authoritatively concluded by the judgment of the Supreme Court in CIT v. Jai Prakash Singh (supra). The apex Court has in the said case noticed a similar argument and held that non-issue of notices to other LRs of the deceased assessed was not sufficient to avoid the assessment or reassessment orders made by the AO. In the light of the said decision, the CIT(A) was indeed in error in upsetting the reassessment orders passed by the AO.

4. Mr. Prakash Kumar strenuously argued that non-service of notices upon other LRs amounted to a clear violation of the principles of natural justice qua the said LRs, inasmuch as no assessment order could be validly made without first serving a notice upon the LRs who are themselves assesseds within the meaning of Section 159(3) of the IT Act. A similar contention has been repelled by the Supreme Court in CIT v. Jai Prakash Singh (supra) in the following words :

...It is true that the returns were signed only by Jai Prakash Singh and not by the other nine legal representatives, but it should also be remembered that when notices under Sections 142(1) and 143(2) were issued to Jai Prakash Singh, he appeared through his Authorised Representative and produced the relevant books and account on the basis of which assessments were made. Jai Prakash Singh did not raise an objection before the ITO that unless and until notices to all the other legal representatives are sent, assessment oiders cannot be made. He raised this question for the first time in the appeals preferred by him before the AAC and thereafter before the Tribunal. It appears rather curious that Jai Prakash Singh who had voluntarily filed the returns of income should raise this issue; no other legal representative of B.N. Singh has come forward with such a plea. We do not wish to go into the question whether Jai Prakash Singh should at all have been allowed to so turn round and raise this plea in appeal, for the reason that the said issue is not before us in these appeals.

We are of the opinion that the High Court was not right in holding in the above circumstances that the assessment orders made are null and void. They are not. At the worst, they are defective proceedings--or irregular proceedings--as has been rightly held by the AAC and the Tribunal....

...The principle that emerges from the above decision is that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions (charging sections). Any such omission or defect may render the order made irregular--depending upon the nature of the provision not complied with--but certainly not void or illegal.

5. That apart, the contention that the order of reassessment is bad on account of non-service of a notice or violation of principles of natural justice may be open to a party who has suffered on account of any such irregularity. That contention may not be open to the appellant before us who had admittedly received a notice and appeared before the AO and participated in the reassessment proceedings.

6. In the light of what has been stated above, no substantial question of law arises for our consideration. The appeal fails and is accordingly dismissed.