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of <h1>Court rules in favor of legal representatives, stresses procedural compliance under Income-tax Act</h1> The High Court of Madhya Pradesh ruled in favor of the deceased's legal representatives, emphasizing the importance of following procedural requirements. ... 'Whether, Tribunal was justified in annulling the assessment framed by AO against a dead person without bringing the LRs on record?' - In a case where an assessee dies pending any assessment proceedings, the provisions of section 159 get attracted. It is the duty of the Assessing Officer to ensure compliance with sub-section (2) of section 159 before any orders are passed. - In our opinion, the Tribunal while deciding the appeal ought to have taken note of section 159 ibid and should have accordingly, remanded the case to the Assessing Officer for ensuring compliance with section 159 for passing appropriate orders of assessment after due notice to the legal representative of the deceased assessee. Indeed, once the assessment order is held to be a nullity then in such event consequential direction as contemplated under section 159 should have been given to the Assessing Officer so that proper assessment order could be passed – Thus, we answer the question against the Revenue Issues:Annulling assessment against a deceased person without bringing legal representatives on record.Analysis:The High Court of Madhya Pradesh addressed an income-tax reference made by the Income-tax Appellate Tribunal regarding an assessment order against a deceased individual. The court highlighted that the Assessing Officer had knowledge of the death of the assessee before passing the assessment order but failed to notify any legal representatives as required by section 159 of the Income-tax Act. The court emphasized that in cases where an assessee dies during assessment proceedings, section 159 should be followed to involve the legal representatives in the process. The court noted that the Tribunal should have considered section 159 and remanded the case to the Assessing Officer to ensure compliance and issue proper assessment orders after notifying the legal representatives. It was concluded that the assessment order against the deceased person was a nullity, and directions under section 159 should have been given for a valid assessment order. Therefore, the court ruled in favor of the deceased's legal representatives, highlighting the importance of following procedural requirements in such cases.
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