1. This a reference under section 66(2) of the Indian Income-tax Act, 1922.
2. One Shewaram D. Bhatia was assessed to income-tax in respect of the two assessment years 1947-48 and 1948-49. In respect of each of those two years Shewaram had two different accounting years in respect of different sources of his income, the later of the two years ending on 31st March of each year. After the assessments were over, Shewaram died on 12th September, 1950. He left him surviving as his only heirs his wife, an adopted son and a daughter. Both the latter were minor at all times material to this reference. After his death, a notice was issued under section 34(1) (b) of the Income-tax Act. The notice was addressed to 'late Shri Shewaram D. Bhatia by legal heir, his widow, Parmeshwaribai.' The notice was served on one Pessumal on 29th March, 1956. Thereafter, Parmeshwaribai with her letter dated 29th October, 1956, sent two returns, one in respect of each of the said two years. IN the covering letter she took certain objections to the assessment proceedings started under section 34.
3. In the assessment proceedings which have gone through before the Income-tax Officer, the Appellate Assistant Commissioner and the Income-tax Tribunal, she had raised certain objections. One of the objections was that the notice having been served on Pessumal was not validly served as required by section 24B(2). The other objection was that the notice itself should have been addressed to Shewaram as represented by all his three heirs and should not have been addressed to Parmeshwaribai alone as if she was the only legal heir.
4. The Tribunal held that the service of the notice on Pessumal was valid service. As regards Parmeshwaribai's second contention, the Tribunal held that the son and the daughter were minors, that Parmeshwaribai was their guardian, that there was no conflict of interest between her an the two children, that there was nothing to suggest that the Income-tax Officer could not have believed bona fide that she could represent the estate, that he could bona fide entertain the belief that she could represent the estate and that the assessment proceedings were valid and binding on all of them. As both these points were decided against Parmeshwaribai, this reference has been made at the instance of Parmeshwaribai.
5. Three questions of law have been referred and they are :
'1. Whether, in the facts and circumstances of the case, the assessment is bad in law for want of service of notice under section 34 to the remaining two legal representatives of the deceased assessee as required under section 24B(2) of the Indian Income-tax Act, 1922 ?'
2. Whether, in the facts and circumstances of the case, the Tribunal is justified in allowing the appeal of the respondent without giving a finding that the service of the notice under section 34 on Shri Pessumal is legal
3. Whether, in the facts and circumstances of the case, the service of notice on Shri Pessumal is legal ?'
6. Questions Nos. 2 and 3 depend upon a decision whether the service of notice on Pessumal is valid under section 24B(2). It is true that the notice was served upon Pessumal. The notice, however, came to the notice of Parmeshwaribai and she in fact filed returns for both the above assessment years. In view of this fact, Mr. Ramchandani, the learned counsel for the assessee, stated that he did not press the point which is covered by question Nos. 2 and 3 and that question Nos. 2 and 3 may be answered in the affirmative. We, therefore, answer questions Nos. 2 and 3 in the affirmative. What will survive for our decision is question No. 1 only.
7. Now, up to the stage of the decision of the Tribunal this matter has proceeded on the basis that all the three, viz., the widow, the son and the daughter, were the heirs and legal representatives of the deceased Shewaram. In the beginning Mr. Ramchandani argued that according to the principles of Hindu law which were applicable at the time relevant to the facts of this case, the son alone would be the heir of Sehwaram and therefore, the only legal representative of the estate of Shewaram. In view of the provisions of the Hindu women's Rights to Property, Act, 1937, and particularly section 3 thereof, it is clear that Shewaram's widow, Parmeshwaribai was entitled to the same share as that of his son, although three would be restrictions on her enjoying that share. It is, therefore, clear that Parmeshwaribai and the son each had a half share in the estate of Shewaram and were therefore his only legal representatives. On the provisions of this Act being brought to his notice. Mr. Ramchandani conceded that what we have just stated is the correct position in law. Nonetheless, the question which survives for determinations is whether the notice ought to have been addressed to and served on the son also, in addition to Parmeshwaribai, as being the legal representative of Shewaram.
8. Now the Federal Court has in its judgment in Tirtha Lal v. Bhusan Moyi Dasi pointed out that if there are two or more legal representatives of a deceased person, all must be impleaded to make the representation of the estate complete. That would unquestionably be so in normal circumstances. Mr. Joshi, the learned counsel for the department, has not even disputed that position. As pointed out by the Supreme Court in its judgment in First Additional Income-tax Officer v. Mrs. Suseela Sadanandan, there is a consensus of opinion of all the High Courts that where a plaintiff or an appellant, after diligent and bona fide inquiry, ascertains who the legal representatives of the deceased defendant or respondent are and brings them on the record within the time limited by law there is no abatement of the suit or appeal, that the legal representatives brought on the record effectively represent the estate of the deceased and that the decision obtained with them on record will bind not merely those impleaded but the entire estate, including those no brought on the record. This exception presumes a diligent and bona fide inquiry about the legal representatives. In the case before us it has been pointed out that before the notice under section 34 was issued and served on the 29th of March, 1956, the Income-tax authorities knew that Shewaram had died, that his window, son and daughter were his three legal representatives and that as a matter of fact an assessment had already been made and completed on that basis on 24th March, 1955, in respect of the assessment year 1951-52. Mr. Joshi has not disputed that in view of this prior knowledge of the Income-tax Officer the notice under section 34 issued subsequently must be deemed to have been issued with knowledge that Parmeshwaribai was not the only legal representatives of Shewaram, but that this son and daughter also were his legal representatives. In the present case, however, there is another aspect which has to be considered and borne in mind. What Mr. Ramchandani has contended is that the notice ought to have been addressed to the son also as being a legal representative along with Parmeshwaribai and further that the notice ought to have been served on the son, but the son being a minor, it ought to have been served on his behalf on Parmeshwaribai as his natural guardian. The contention that the notice ought to have been addressed to the son also is justified. Moreover, his existence as a legal representative of the deceased Shewaram was known to the department. But even if the notice had been addressed to the son also, it would have had to be served on Parmeshwaribai as his guardian and whatever was required to be done on behalf of the son would have been done by Parmeshwaribai as his natural guardian. The interests of Parmeshwaribai and the son did not conflict and were as a matter of Parmeshwaribai and the son did not conflict and were as a matter of fact identical at least in so far as the questions relating to the two assessments under section 34 were concerned. What has been omitted to be done which ought to have been done is to state in the notice that it was addressed to the minor son through his natural guardian, Parmeshwaribai, and it ought to have been served separately on Parmeshwaribai as representing the minor son. Now, in Sheik Abdul Sattar v. District Collector, Masulipatam, Seshachelapati J., as single judge, of the Andhra Pradesh High Court, has held that giving notice to one legal representative, who is also the guardian of all the other legal representatives of a deceased assessee is substantial compliance with the requirements of section 24B(2) of the Income-tax Act. The learned judge has, in similar circumstances as those in our case, held that the notice having been given to the mother who was the guardian of the other legal representatives was substantial compliance with the requirements of the section. In the case before us, if the son was a major, different considerations would have arisen. But such is not the case. The son is a minor. Even if the notice was addressed to the son, it would have had to be stated therein that it was addressed to him through his mother as the natural guardian and it would have had also to be served on the mother in her capacity as the natural guardian of the son. The omission happens to be, on the facts and the circumstances of this case, of no significant importance. As there was no conflict between the interests of the mother and son, whatever the mother would have done as the natural guardian of the son was in fact done by her in her personal capacity, though not as the guardian of the son, but, of course as a legal representative of Shewaram. We, therefore, respectfully accept the principal laid down in the above Andhra Pradesh case and hold that, on the facts and the circumstances of this particular case, though the notice was addressed to and served on Parmeshwaribai alone, there was substantial compliance with the requirements of section 24B(2) of the Income-tax Act. We, therefore, answer question No. 1 in the negative.
9. There will be no order as to costs.