R.K.AGARWAL, J. - (1.) THE Tribunal, Allahabad, has referred the following question of law under S. 256(2) of the IT Act, 1961, (hereinafter referred to as the 'Act'), for opinion to this Court : "Whether, on the facts and in the circumstances of the case was the Tribunal justified in law in quashing the assessments for the asst. yrs. 1971 72, 1973 74, 1975 76 and 1976 77 ?" The said question arises out of the order dt. 31st May, 1979, passed by the Tribunal in ITA Nos. 113 to 116 (Alld.) of 1979, relating to the asst. yrs. 1971 72, 1973 74, 1975 76 and 1976 77.
(2.) THE facts of the case are that the assessee, viz., Late Sri G.P. Verma through his son Sri C.L. Verma, who is an individual, derived income for the aforesaid assessment years from hire charges in respect of a cinema known as Uttam Talkies situate at Station Road, District Jaunpur. The return for these four years were due under S. 139(1) of the Act, on 30th Sept., 1971, 30th Sept., 1973, 30th Sept., 1975 and 30th June, 1976, respectively. As the returns were not filed, the ITO issued notices under S. 148 of the Act, which was followed by notice under S. 142(1). The notices were again issued on 27th Sept., 1977. The assessee sent a reply on 14th Oct., 1977, and after some correspondence, returns were ultimately filed by Sri C.L. Verma for each of the four assessment years in question on 17th Nov., 1977, declaring an income of Rs. 6,000 for each of these years. The ITO after making certain disallowances and addition completed assessment for these four years on an income of Rs. 31,476, Rs. 41,100, Rs. 44,100 and Rs. 48,800 respectively. The appeal filed by the assessee before the Asstt. CIT, failed. However, in the appeal before the Tribunal, a preliminary objection was raised on behalf of the assessee to the effect that the very initiation of the proceedings under S. 148 of the Act, in these cases was wrong. It was submitted that late Sri G.P. Verma started the business of Uttam Talkies, Jaunpur, as its sole proprietor in the year 1958 and it continued upto 27th July, 1976, when he died. The factum of death of Sri G.L. Verma was known to the Department and his legal heirs were not substituted on the record. It was submitted that the ex parte assessment orders for the year 1974 75, passed on 31st March, 1977, was served on one Sri Radhey Shyam Verma, who was the brother of the deceased. He was compelled to deposit tax for the asst. year 1974 75 on 7th Sept., 1977. Thereafter, the assessee was given notice in respect of the assessment years in question. It was pointed out that the assessee vide reply dt. 27th Sept., 1977 to the notices issued under S. 143(3) of the Act had given the names of all the heirs of late Sri G.P. Verma but even then the ITO continued to treat the assessee as the sole heir of late Sri G.P. Verma. In these circumstances, it was argued before the Tribunal that the assumption of jurisdiction by the ITO was wrong. The Tribunal accepted the preliminary objection raised on behalf of the assessee and quashed the assessment orders for all the assessments years in question. Thus, the assessee's appeal was allowed by the Tribunal. On these facts the Tribunal has referred the aforementioned question of law for opinion to this Court. We have heard Sri Ashok Kumar, learned standing counsel appearing for the Department. No one has appeared on behalf of the assessee, even though the case has been taken in the revised list.
(3.) IT is not in dispute that the assessment for the asst. yrs. 1971 72, 1973 74, 1975 76 and 1976 77 has been made in the name of Sri Chandra Mohan Verma who is one of the legal heirs of late Sri G.P. Verma. At the time of making the assessment no objection whatsoever was raised either by Sri Chandra Mohan Verma in whose names the assessment in respect of the aforementioned four assessments years have been made or by any other legal representative and heirs of Sri G.L. Verma, that the heirs and legal representatives ought to have been brought on the record before passing the assessment orders in the name of Sri Chandra Mohan Verma as legal heir and representative of late Sri G.L. Verma. In fact, except informing the names of all the legal heirs of late Shri G.L. Verma to the ITO on 27th Sept., 1977, the heirs and legal representatives did not take any objection about the requirement/necessity of bringing all the heirs and legal representatives of late Sri G.L. Verma on record. Sri Chandra Mohan Verma participated in the proceedings before the ITO. Even in the appeal filed by him before the AAC in respect of the aforementioned assessment years, no objection, whatsoever, was raised regarding the non impleadment of all the heirs and legal representatives of Sri G.L. Verma in the proceedings. It was raised only for the first time in the appeal before the Tribunal. Sec. 159 of the Act deals with legal representatives. It reads as follows : Legal representatives "159. (1) Where a person dies, his legal representatives 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 S. 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 s. (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 the 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. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or part with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub s. (2) of S. 161, S. 162 and S. 167 shall, so far as may be and to the extent, to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub s. (4) and sub s. (5), be limited to the extent to which the estate is capable of meeting the liability." ;