- (1.) ON these applications under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for both the reference applications for the assessment years 1983-84 and 1984-85 for our opinion : "1. Whether, on the interpretation of Section 159 of the Income-tax Act, 1961, the finding of the Tribunal that the legal heir is fully responsible for the default committed by the deceased was patently on reasonable and/or sustainable in law ? 2, Whether, on the facts and in the circumstances of the case, the order of remand by the Tribunal was legal and valid ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal acted legally in sending back the matter to the Assessing Officer after having held that the illness of the deceased had been established by evidence ? 4. Whether, on the facts and in the circumstances of the case, the disposal of the appeal by the Tribunal was in accordance with law ? 5. Whether, the finding of the Tribunal that the factum of illness had been argued for the first time is perverse and/or inconsistent with the evidence on record ?"
(2.) NONE appeared for the assessee though the matter was adjourned for five times. Heard learned counsel for the Revenue. The assessee, Smt. Tapati Pal, is a legal heir of Dr. G. C. Nandi. Dr. G. C. Nandi died on July 28, 1985. The assessment years are 1983-84 and 1984-85 before us. The assessments were completed on March 25, 1986, on the legal heir, Smt. Tapati Pal, and the total income was computed at Rs. 1,88,110 and Rs. 2,18,470, respectively, for both the years. Thereafter the penalty proceeding under Section 271(1)(c) was initiated against the legal representative, i.e., this assessee. The penalty was imposed to the tune of Rs. 73,040 and Rs. 92,843 under Section 271(1)(c) for both the years respectively. In appeal the Commissioner of Income-tax (Appeals) has cancelled the penalties for both the years. In appeal before the Tribunal, the assessee has first time taken the plea that Dr. G. C. Nandi was ill during the relevant period and, therefore, the correct income could not be filed. As this plea was filed before the Tribunal, the Tribunal has restored the matter back to the Assessing Officer to find out the fact and consider the case of the assessee in case whether the assessee was ill. The Tribunal has concluded his reasoning in para. 4 of its order which reads as under : "We have considered the submissions, facts and materials on record. In our view, the issue should be restored back to the file of the Assessing Officer to examine the fact of illness which has been argued for the first time before us. In our view, the illness of the deceased had been established by this evidence. Moreover, it is seen penalties under Section 271(1)(a) were not levied for these two years considering the assessee's illness during the relevant time. However, we may make it clear that the legal heir is fully responsible for the default committed by the deceased as laid down in Section 159 in the following terms. Any proceeding which could have been taken against the deceased, if he had survived, may be taken against the legal representative and all the provisions of this Act shall apply accordingly and also the legal representative of the deceased shall for the purposes for this Act, be deemed to be an assessee. In view of this mandatory provision, it is difficult to appreciate the view of learned counsel for the assessee that the legal heir is not responsible for the default committed by the deceased. Though the liability of paying of penalties is limited to the value of the estate inherited by him or her."
(3.) WHEN the plea of illness was taken for the first time before the Tribunal which requires enquiry into the facts usually that should not be considered at the stage of second appeal before the Tribunal. WHEN any question or issue, is raised for the first time before the Tribunal, which required enquiry into facts. The Tribunal cannot make enquiry of facts in second appeal. However, when the Tribunal has entertained the plea which requires enquiry into facts, the Tribunal has no option but to remit the matter back to the Assessing Officer. Thus the Tribunal was fully justified in remitting the matter back to the Assessing Officer to give finding whether the assessee was ill during the relevant period. In view of the facts and the fact that the assessee is liable to pay the tax and be treated as deemed assessee after the death of her father under the provisions of Section 159 of the Income-tax Act, there is nothing wrong in initiating the penalty proceedings against the assessee after the death of her father.;