Rajesh Balia, J. - (1.) HEARD learned counsel for the Revenue. None appeared for the respondent in spite of service.
(2.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, by its order dated July 13, 1994, has referred the following two questions of law arising out of two separate appeals filed by the assessee and the Department for the assessment year 1985-86 : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in holding that the action of the Assessing Officer in non-issuing of notices of one LH was not bona fide and diligent ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in annulling the assessment order passed by the Assessing Officer ?" The relevant facts for the present purposes are that the assessee who was liable to be assessed for the assessment year 1985-86 was Kantilal Saraf an individual who was deriving income as partner from a registered firm, Usha Bleaching Centre, Pali, and also from tuitions, He died on July 9, 1986, leaving behind him the following legal heirs and representatives, namely : 1. Smt. Pushpadevi (widow), Shri Dileep Kumar (son), Smt. Usha (daughter), Kumari Raj Kumari (daughter), Shri Praveen Kumar (son), Shri Rakesh Kumar (son) and Kumari Pooja (daughter). It appears that because of the death of Kantilal no return was filed initially by the deceased for the assessment year 1985-86. However, in pursuance of a letter dated September 26, 1986, and the notices under Sections 142(1) and 143(2) both dated December 15, 1986, his widow, Smt. Pushpa Devi, filed a return on July 30, 1987, declaring the income of the deceased assessee for the assessment year 1985-86 at Rs. 19,020. The Income-tax Officer completed the assessment under Section 143(3) on March 30, 1988, assessing the deceased on a total income of Rs. 1,46,590. Smt. Pushpa appealed against that order before the Commissioner of Income-tax (Appeals) challenging the validity and legality of the assessment order dated March 30, 1988, of the deceased assesses through Pushpa Devi one of his legal representatives. Smt. Pushpa raised the ground that all the legal representatives of the deceased had not been made party to the proceedings hence the assessment order made without notice to all the legal representatives was invalid. The learned Commissioner of Income-tax (Appeals) finding that the factual position is true that the notices were not issued to the legal representatives held that it was a case of procedural irregularity rectifiable by issue of notices to all the legal representatives of the deceased assessee. For reaching this conclusion he relied upon the decision of the Calcutta High Court in Sajjan Kumar Saraf v. CIT [1978] 114 ITR 155. He, therefore, set aside the assessment and remanded the case back to the Income-tax Officer for making fresh assessment in accordance with law. The order of the Commissioner of Income-tax (Appeals) was passed on August 3, 1989, which was made the subject-matter of the appeal by the assessee which was Appeal No. 1409 of 1989. Meanwhile, in compliance with the order passed by the Commissioner of Income-tax (Appeals), dated August 3, 1989, the Income-tax Officer, issued notice to the five legal representatives out of seven legal representatives of the deceased assessee. By his letter dated November 12, 1990, Shri Arvind Bhatt, advocate, appeared before the Income-tax Officer and requested to keep the proceedings in abeyance as an appeal against the order dated August 3, 1989, was pending for the decision of the Tribunal. The Income-tax Officer did not accept the request letter because the same was not accompanied by the power of attorney in favour of Shri Bhatt and she completed the assessment under Section 144 on December 18, 1990. She again assessed the income of the assessee at the same figure as Rs. 1,46,590. The five legal representatives approached the Commissioner of Income-tax (Appeals) in appeal once again. The validity of the order passed by the Assessing Officer was challenged on the ground that the composite notice in the name of five legal representatives in one envelop sent to and delivered at the wrong address did not amount to sufficient compliance with the Commissioner of Income-tax (Appeals) earlier order. It was contended that two of the legal representatives were issued no notices at all. In sum it was submitted that no proper opportunity of being heard was given to the legal representatives representing the estate of the deceased. The learned Commissioner of Income-tax (Appeals) found substance in these submissions. He pointed out that no notice had been issued to Smt. Usha and Kumari Puja and that the remaining legal representatives had complied with the notices issued to them but the Income-tax Officer had not even marked their attendance in the order sheet. He, therefore, held that the order made by the Income-tax Officer under Section 144 was bad and the assessment so made was not proper. He, however, once again set aside the assessment and sent it back to the Income-tax Officer directing him to again issue the notices to all the legal representatives in accordance with law and then complete the assessment afresh in accordance with law after considering the material on record and giving proper opportunity of being heard to all the legal representatives.
(3.) AGAINST the order passed by the Commissioner of Income-tax (Appeals) on March 13, 1991, both the assessee as well as the Revenue preferred their respective appeals before the Tribunal. The five legal representatives of the deceased contended that the order passed by the Income-tax Officer, was without notice to the legal representatives a second time and was void ab initio. The contention of the Department in its appeal was that the Commissioner of Income-tax (Appeals) should have confirmed the assessment order instead of setting aside the same and sending it back to the Income-tax Officer for assessment. The Tribunal found that despite clear direction by the Commissioner of Income-tax (Appeals), the Income-tax Officer had not brought all the legal representatives of the deceased on record by issuing requisite notice to them particularly when the Income-tax Officer was having full knowledge of the legal representatives of the deceased assessee. Not issuing requisite notice to all the legal representatives, separately and individually the Income-tax Officer had not acted bonafide and diligently and the Income-tax Officer had proceeded to complete the assessment in the manner she has in spite of objections having been made and raised before her, the heirs cannot be deemed to have waived their rights. In this connection, it was concluded by both the authorities, namely, the Commissioner of Income-tax (Appeals) as well as the Tribunal, that two minors were not at all brought on the record and not even their natural guardians were informed of the pending proceedings. With these findings, the Tribunal held the second assessment to be void ab initio and annulled the same. In the aforesaid facts and circumstances, the two questions referred to above have been raised for the opinion of this court. The real controversy is contained in question No. 2, whether, on the facts and circumstances of the case, the Tribunal was justified in annulling the assessment order passed by the Income-tax Officer. The fact of the acceptance of the finding that the Income-tax Officer has not acted bonafide and diligently in not issuing notice to all the legal representatives cannot be effaced. They are accepting that no notice at all was served to them. ;