SAJJAN KUMAR SARAF Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) It appears that Shri B. L. Saraf died on 9th of July, I960, and a notice under section 22(2) of the Indian Income-tax Act, 1922, calling upon him to file the return of income for the assessment year 1961-62 was issued on 7th July, 1961. The said notice was issued in the name of Shri B. L, Saraf who had already died on the 9th July, 1960. On 2nd of June, 1965, Sajjan Kumar Saraf, in his capacity as "the legal representative" of the deceased, filed the return of income for the assessment year 1961-62, Notices under section 143(2} and 142(1) of the Act were issued to Sri Sajjan Kumar Saraf as the legal representative of the late Shri B. L. Saraf. For the assessment year 1959-60 also an ex parte assessment was raised against the deceased on 3rd of March, 1962. Against this ex parte order, Shri Sajjan Kumar Saraf filed a petition under section 27 of the Indian Income-tax Act, 1922, as the legal representative of the deceased on 23rd April, 1962. We are concerned in this reference with the assessment for the assessment year 1961-62 and the same was completed on a total income of Rs. 95,495 on 21st March, 1966. At this stage, no question as to the liability of Shri Sajjan Kumar Saraf as a legal representative of the deceased was raised before the Income-tax Officer. The Appellate Assistant Commissioner did not deal with the validity of the assessment though this issue was raised before him.

(2.) Before the Tribunal, however, an argument was specifically taken up. It was urged that the notice under section 22(2) of the Indian-Income-tax Act, 1922, was issued to a dead person and as such was bad in law and the return filed by Shri Sajjan Kumar Saraf in 1965 was also invalid as it was filed in pursuance of an invalid notice. Therefore, it was urged that the entire assessment proceeding deserved to be quashed as the very foundation of the jurisdiction of the Income-tax Officer had been vitiated on account of the invalid notice under section 22(2) of the Indian Income-tax Act, 1922. The Accountant Member of the Tribunal accepted the assessee's view but the Judicial Member did not. The Judicial Member, however, thought that there were other legal representatives whose names could have been gathered. He, therefore, directed that the assessment should be re-done by the Income-tax Officer after giving notice to all the legal representatives. He set aside the assessment order and directed the Income-tax Officer to complete the assessment in accordance with law and after bringing on record all the legal representatives of the deceased. As there was difference of opinion the matter was referred to the third Member and he agreed with the Judicial Member and, according to the majority decision of the Tribunal, the assessment for the assessment year 1961-62 was set aside directing the Income-tax Officer to make a fresh assessment in accordance with law and after impleading all the legal representatives of the deceased.

(3.) In the premises under section 256(2) of the Income-tax Act, 1961, as directed by the High Court, the following two questions have been referred to this court :