1. The Income-tax Appellate Tribunal has referred the following questions of law under Section 66(1) of the Indian Income-tax Act, 1922, to this court:
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the return filed suo motu for the assessment year 1956-57 beyond the period of four years from the expiry of that assessment year was invalid and that no fresh assessment could be made thereon for that year ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Commissioner of Income-tax couldnot initiate proceedings under Section 33B of the Indian Income-tax Act, 1922, against the legal representatives of the deceased assessee and that as such the order of the Commissioner of Income-tax under the said Section 33B was bad in law ?'
2. On March 31, 1962, the Income-tax Officer received the voluntary returns of income for the assessment years 1956-57 to 1961-62, filed by the assessee and on the same day he handed over the notices under Section 23(2) of the Act to the assessee's authorised representative, who was present before him, and completed the assessments for all those years on the very same day and issued demand notices, challans and copies of the assessment orders on that day.
3. The Commissioner of Income-tax then issued a show-cause notice under Section 33B of the Act, addressed to the assessee on February 28, 1964. Sri Bissessar Lal Gupta, the husband of the assessee, wrote to the Commissioner on March 6, 1964, informing him that the assessee had died on February 2, 1964, and he and his son were the legal representatives of the deceased assessee. On March 7, 1964, the Commissioner issued a fresh notice under Section 33B addressed to Bissessar Lal Gupta and his son as the legal representatives of the deceased assessee and fixed the hearing of the case on March 19, 1964. They appeared and contended before him that after the death of the assessee no proceeding could be taken against them under Section 33B of the Act, but it was rejected by the Commissioner who, on merits, held that the assessments were made by the Income-tax Officer without jurisdiction and they were done with undue haste and without making proper enquiries and investigation and those assessments were erroneous and prejudicial to the interests of the revenue. The Commissioner, therefore, set aside the said assessments and directed the Income-tax Officer to make fresh assessments in accordance with the law.
4. The Appellate Tribunal allowed the appeal filed by the legal representatives of the assessee by holding that the Commissioner had no jurisdiction to issue the said notice under Section 33B of the Act on the legal representatives of the assessee, for they were not the assessee within the meaning of that expression used in that Section in view of its understanding of a decision of the Supreme Court hereinafter mentioned.
5. No one has appeared for the legal representatives of the assessee. Mr. B. L. Pal, the learned counsel for the revenue, in his usual fairness has drawn our attention to a decision of this court in the case of Commissioner of Income-tax v. Minabati Agarwalla, : 79ITR278(Cal) which is against the revenue on question No. 1. Hence, our answer to question No. 1 is in the affirmative and in favour of the assessee.
6. We are, however, unable to accept the reasons of the Tribunal on question No. 2 for, in our opinion, the Tribunal has failed to appreciate the decision of the Supreme Court in the case of Additional Income-tax Officer v. E. Alfred, : 44ITR442(SC) . It has been held by the Supreme Court in that case that the legal representative of a deceased assessee is an assessee within the meaning of that expression used in the Act. There the respondent was the son of the deceased assessee and a notice was issued to him under Section 22(2} of the Indian Income-tax Act, 1922, with regard to the assessee's income and the respondent was assessed under Section 24B(2) of the Act. The respondent, however, did not pay the assessed tax and, therefore, penalty was imposed upon him under Section 46(1) of the Act. The High Court quashed the order imposing penalty by holding that the respondent being the legal representative of the deceased assessee was not an assessee under the Act. The Supreme Court, however, set aside the said decision of the High Court and speaking for the Supreme Court, at page 445 of the report, on Sub-section (1) of Section 24B of the Act, Hidayatullah J. (as he then was) said as follows:
'By this sub-section, a legal representative is made liable to pay the tax which might have been assessed but not paid by the deceased person or which might be assessed after his death. It, covers all situations and contingencies and makes the liability absolute, limited, however, to the extent to which the estate of the deceased is capable of meeting the charge. The sub-section does not provide for issue of notices, assessment, collection or anything connected with the imposition, levy and collection of the tax.'
7. Thereafter, his Lordship at page 446 of the report said as follows:
'The word 'assessment' bears different meanings, and, in one sense, it comprehends the entire process of computation and levy of the tax. It is in this sense that the legal representative becomes an assessee by the fiction, and it is this fiction which has to be fully worked out, without allowing the mind 'to boggle'..... If we turn to the definition of'assessee', it says that an assessee means a person, by whom income-tax is payable. A legal representative, who, by fiction, is deemed to be an assessee, therefore, comes within this definition, because he is a person by whom income-tax is payable, though out of the assets left by a deceased person.'
8. In no uncertain terms the Supreme Court has laid down that the legalrepresentative of a deceased assessee is an assessee within the meaning of that term used in the Act. The liability of the legal representative of the deceased assessee is a statutory liability and it does not flow from the service of any notice, ordinary or special. This liability of the legal representative is not confined to Section 24, but it extends to all liabilities under the Act. No doubt, it is a legal fiction, but the Supreme Court has unequivocally said at page 447 of the report that' the fiction has to be worked out to its logical conclusion'.
9. The liability of the legal representative of a deceased assessee does not flow from the service of notice on him either under Section 24B(2) or Section 24B(3) of the Act. Those two sub-sections relate to the procedure regarding the assessment of tax in the hands of the legal representative. Section 33B of the Act confers jurisdiction on the Commissioner to call for and examine the records of 'any proceedings under the Act'. In exercise of that jurisdiction if he is of the opinion that any order passed in any proceedings by the Income-tax Officer is erroneous and is prejudicial to the interests of the revenue, he may, 'after giving the assessee an opportunity of being heard' and after making or causing to be made such enquiries as he deems necessary, pass such order thereon as the circumstances of the case may justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing'a fresh assessment. This section speaks of 'after giving the assessee an opportunity of being heard'. The legal representative of the deceased assessee, in our opinion, is an assessee within the meaning of this expression used in the section, for this expression has been defined in Section 2(2) of the Act, and in no uncertain terms the Supreme Court has laid down that the legal representatives of a deceased assessee is an assessee within the meaning of this expression as defined by Section 2(2) of the Act.
10. The question of service of notices under Section 24B(2) or Section 24B(3) of the Act can only come after a person is found to be the legal representative of the deceased assessee under Section 24B(1) of the Act. Therefore, the Tribunal went wrong in confining the above decision of the Supreme Court only to those cases that come under Sub-sections (2) and (3) of Section 24B of the Act. In this view of the matter, we are unable to agree with the Tribunal and our answer to question No. 2 is in the negative and in favour of the revenue.
11. The revenue will get the costs of this reference.
12. Certified for two counsel.
13. I agree.