1. These appeals by the department and the cross objections by the assessee have been heard together and are being disposed of by this common order.
2. We are here concerned with the assessment to wealth-tax. The assessment year is 1975-76. The original assessee was Gopalji Jagmal.
He filed return for the said assessment year on 24-2-1976. During the pendency of the assessment proceedings, he died on 11-7-1978. The assessment was completed on 22-3-1980 under Section 16(3) of the Wealth-tax Act, 1957 ('the Act'). In the assessment order, the name of the assessee was mentioned as follows: 3. In the assessment order, it has been mentioned that in response to notice under Section 16(2), Shri Mani from Gondalia & Mandviwala appeared. The assessment had been completed after giving reasonable opportunity of being heard to the said Shri Mani, who had appeared before the WTO.4. Smt. Dhangauri Gopalji, the wife of the deceased original assessee, was the executrix of the will of the said deceased. She filed appeal before the Commissioner (Appeals) against the assessment order. The first ground that was raised on her behalf before the Commissioner (Appeals) was that the whole assessment was bad and illegal, inasmuch as, it had been made in the name of the deceased and that the demand notice had also been issued in the name of the deceased. According to her, this was an assessment on dead person and, as such, was null and void. Reliance was placed by her on certain decisions. In the alternative, she raised objections on merit in respect of matters decided by the WTO in the assessment order.
5. The Commissioner (Appeals) noted in his order the first ground of appeal in which the validity of the assessment itself had been challenged and also the decisions cited on behalf of the executrix in support of the plea. However, he did not express any opinion on the question whether the assessment was valid or not and did not adjudicate the question of its legality. He decided the grounds pertaining to the merits of the findings recorded by the WTO and these grounds were decided in favour of the assessee. He, thus, allowed the appeal in part.
6. In the appeal filed by the department [WT Appeal No. 2380 (Bom.) of 1982], the findings recorded by the Commissioner (Appeals) in favour of the assessee on merit have been challenged. The executrix has filed cross-objection [CO. No. 323 (Bom.) of 1983], in which the contention was that the assessment was void ab initio and was liable to be cancelled on that ground, because of the fact that it had been made in the name of the deceased and that the notice of demand had also been issued in his name. In the cross-objection, certain other grounds had also been raised.
7. The WTO had made an order under Section 35 of the Act, by which additional wealth-tax on urban immovable property was levied. According to the WTO there was a mistake apparent from the record on this point in the original assessment order and, as such, the said mistake was liable to be rectified by an order under Section 35. The executrix filed an appeal against the said order under Section 35. The Commissioner (Appeals) allowed the appeal. The department has now come in appeal before us against the order of the Commissioner (Appeals).
That appeal is WT Appeal No. 2381 (Bom.) of 1982. The executrix has filed cross-objection [CO. No. 322 (Bom.) of 1983]. In this cross-objection, the original plea that the assessment was void ab initio because of the fact that it was made in the name of the deceased, has again been raised.
8. In the course of hearing of these appeals and cross-objections, the department raised an additional ground of appeal, which was to the effect that the executrix had no locus standi to file the appeal before the Commissioner (Appeals) and that only the legal heir of the deceased could have filed the appeal before the Commissioner (Appeals), with the result that the Commissioner (Appeals) should have dismissed the appeal in limine.
9. We shall first deal with the additional ground raised on behalf of the department. Since that ground raises a question of law, we shall consider that ground on merit. The said ground appears to be ex facie unsustainable. When the deceased had executed the will and had appointed the executrix it is the executrix who would be competent to take further action by way of filing appeal. There is no question of any other legal heir filing the appeal against the assessment order.
We, accordingly, reject the said additional ground.
10. The grounds as to the validity of assessment raised by the executrix in the two objections go to the very root of the matter and, as such, they should be considered at the outset. In fact, it was the duty of the Commissioner (Appeals) to consider the ground regarding the validity of assessment at the very outset and he should have considered the grounds on merit only after he was satisfied that the assessment order was not liable to be either cancelled or set aside. He failed to do so.
11. We have heard the rival submissions at length on this question and we proceed to decide the same. The relevant provision is Section 19(2) of the Act, which, so far as material, is as follows: Where a person dies...after having furnished a return which the Wealth-tax Officer has reason to believe to be incorrect or incomplete, the Wealth-tax Officer may make an assessment of the net wealth of such person and determine the wealth-tax payable by the person on the basis of such assessment, and for this purpose may, by the issue of the appropriate notice which would have had to be served upon the deceased person if he had survived, require from the executor,...any accounts, documents, or other evidence which might under the provisions of Section 16 have been required from the deceased person.
It is clear from the above-mentioned provision that what has to be assessed is the wealth of the deceased person. If the return filed by the deceased is accepted by the WTO as correct, the assessment can be made on the basis of that very return. However, if the WTO is not satisfied about the correctness or completeness of the return, he has to issue notice to the executor to produce the necessary documents and evidence and then complete the assessment. Thus, the essential requirement is that the executor of the deceased should have been given an opportunity of producing the evidence before the assessment in respect of the wealth of the deceased is completed.
12. In the present case, it is admitted before us that the executrix, Smt. Dhangauri Gopalji, had given authority to the chartered accountant concerned and that she took part in the proceedings through the said chartered accountant. The only defects are that the name of the deceased has been mentioned as the assessee in the assessment order, whereas the name of the executrix should also have been mentioned and no formal notice, as required by Section 19(2), is said to have been issued against her. The contention on behalf of the executrix is that these defects rendered the whole assessment null and void because this assessment is an assessment of a dead person. The further submission on behalf of the executrix is that the said assessment is liable to be annulled. The submission on behalf of the department, on the other hand, that those defects do not render the assessment as void ab initio. The said defects constitute irregularities and inadvertent errors. The assessment was not of a dead person. What all had happened was that a dead person's name was mentioned. Reliance was placed on Section 42C of the Act, and also on the decision of the Tribunal in Third ITO v. Shivaji Park Gymkhana  4 ITD 462 (Bom.) (SB).
Reliance was also placed on certain observations at page 36 of V.S.Sundaram's Law of Income-tax in India. According to the learned departmental representative, this is a case where the assessment should not be annulled but it should be merely set aside with directions to complete the same after removing the above defects.
13. We have carefully considered the submissions. As already stated what Section 19(2) in substance requires is that the executrix should be given an opportunity of producing evidence and of being heard before the assessment in respect of wealth of the deceased is completed. In order that the executrix may be given such opportunity, provision has been made therein that notice should be issued to the executrix. In the present case, the notice has not been issued to the executrix. However, the executrix has appeared and opportunity of being heard has been given to her. In the circumstances, the assessment, in the present case, cannot be said to be void ab initio. What all that can be said is that a procedural irregularity has crept in the proceedings.
14. Similarly, the mere fact that the name of the deceased has been mentioned in the assessment order as the assessee does not mean that the assessment has been made on the dead person. The assessment can be said to have been made on a dead person when no notice is sent to the legal representative and the assessment is completed without giving an opportunity of being heard to the legal representative. Such is not the case here. Hence, we are unable to agree with the contention that the assessment was void ab initio merely because the name of the deceased was mentioned in the assessment order as the assessee and that the name of the executrix was not mentioned there, This also is a mere procedural irregularity.
15. Our attention was drawn by the learned Counsel for the assessee to the observations of Law and Practice of Income-tax by Kanga and Palkhivala, Seventh edn., Vol. 1, p. 943. What all that has been observed there is that Section 24B of the Indian Income-tax Act, 1922 ('the 1922 Act') which corresponded to Section 159 of the Income-tax Act, 1961 ('the 1961 Act') had been inserted in the 1922 Act, in the year 1933 because of the decision of the Bombay High Court in Ellis C.Reid v. CIT 5 ITC 100 to the effect that in the absence of express provision, the proceedings against an assessee could not be continued after his death. The said observations are of not any assistance in the present case. In the Act, there is an enabling provision in Section 19(2), under which the assessment in respect of the wealth of the dead person could be completed by issue of notice to the executor and by giving the executor an opportunity of being heard.
16. Reliance was also placed on the decision of the Gauhati High Court in the case of Jai Prakash Singh v. CIT  111 ITR 507. It was laid down therein that if notice under Section 143(2) of the 1961 Act had been issued to only one of the several legal representatives, the assessment was not valid. The ratio of that decision is that the estate of the deceased must be fully represented and when notice is not issued to all the legal representatives, but only to some of them, the estate could not be said to be fully represented. The said principle would not apply here. In the present case, the executrix would represent the estate of the deceased fully. The issue of notice is not material when the executrix herself had appeared.
17. Reliance was also placed on behalf of the assessee on the decision in Umashankar Mishra v. CIT  136 ITR 330 (MP). In that case notice to show cause why the penalty should not be imposed had not been signed by the concerned officer. It was held that the notice and the consequent levy of penalty was not valid. The ratio of that decision would not be applicable in the present case because in that case the concerned officer acquired jurisdiction to initiate proceedings only on issue of notice signed by him and since the notice was not signed by him, the defect pertained to the jurisdiction. In the present case return was filed by the deceased and, hence, jurisdiction to assess was there. The subsequent defect was not jurisdictional defect but was a procedural one.
18. In this connection, we may refer to the decision of the Gujarat High Court in CIT v. Sumanthbhai C. Munshaw  128 ITR 142. In that case, after filing of the return, the assessee had died. Thereafter notice had been issued and assessment proceedings continued in the name of the deceased assessee. The legal representative was not issued any notice, but he appeared and did not raise any objection. It was held that the assessment proceedings and order in the name of the deceased was not null and void and that the legal representative could not question the validity of the assessment after limitation for making assessment had expired. This decision was given in the income-tax appeal in income-tax reference. However, the principle laid down therein would be equally applicable to the wealth-tax proceedings.
19. We may also refer to the decision of the Supreme Court in Guduthur Bros. v. ITO  40 ITR 298. In that case, after issue of notice to show cause why penalty should not be imposed, the ITO proceeded to impose penalty without giving opportunity of being heard. The AAC set aside the order imposing penalty as defective and directed refund of any penalty that might have been recovered. After receipt of the AAC's order, the ITO issued a further notice calling upon the assessee to appear before him so that an opportunity of being heard could be given.
It was held that since the illegality which vitiated the proceedings had occurred after the proceedings were lawfully initiated, it was open to the ITO to take up the matter at the point at which the illegality supervened and to correct the proceedings. The ITO, therefore, had jurisdiction to continue the proceedings from the stage at which the illegality had occurred.
20. In the present case, the grievance of the executrix is that no specific notice was issued to her although she appeared voluntarily and that the name of the deceased was mentioned as the assessee in the assessment order. It is, thus, obvious that some illegality had supervened in the course of the assessment proceedings. The whole assessment proceedings were not null and void and as such, there is no question of its annulment. In the circumstances, the proper course would be to set aside the assessment with the direction to the WTO to continue the proceedings by issue of fresh notice under Section 19(2) to the executrix and complete the assessment in accordance with law.
21. For the reasons given above, we hereby set aside the assessment and restore the matter to the WTO to complete the same in accordance with law. Since the assessment has been set aside on the basis of cross-objection of the assessee, the appeals of the department against the decisions of the Commissioner (Appeals) on merits of the claim as well as in the order under Section 35 do not survive. The other grounds raised in the cross-objection also do not survive.
22. Accordingly, the cross-objections filed by the assessee are allowed, while the appeals filed by the department are dismissed as infructuous.