Tribunal validates assessment in deceased's name, deems legal rep as assessee. Error found on tax deduction, compliance verification ordered.

The Tribunal upheld the validity of the assessment made in the name of a deceased person, emphasizing that the legal representative is deemed the assessee. The notice and order under section 263 issued in the name of the deceased were deemed valid as they were understood to be on the legal representative. Regarding non-deduction of tax at source on freight payments, the Tribunal found the assessment order erroneous and directed the Assessing Officer to verify compliance with the prescribed form in set-aside proceedings. The Tribunal dismissed the appeal and directed further proceedings for compliance verification.

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Issues Involved:
1. Validity of assessment made in the name of a deceased person.
2. Validity of the notice and order under section 263 issued in the name of the deceased.
3. Compliance with section 194C(7) of the Income Tax Act, 1961 regarding non-deduction of tax at source on freight payments.

Detailed Analysis:

1. Validity of Assessment Made in the Name of a Deceased Person:
The appellant argued that the assessment made in the name of his deceased father was a nullity in law, as his father had died during the assessment proceedings. The Tribunal agreed that an assessment made on a deceased person is a nullity but noted that the assessment in this case was initiated while the deceased was alive and was continued and concluded after hearing the legal representative (LR), i.e., the appellant. The Tribunal emphasized that the legal representative is deemed by law to be the assessee and is liable to be assessed in respect of the deceased's income. The assessment was considered valid as the LR participated in the proceedings, and the assessment was essentially on him as the representative of his late father. The Tribunal referenced several legal precedents to support this view, including CIT v. Kaushalyabai and Swarn Kanta v. CIT, and concluded that the assessment was legally firm and saved by section 292B of the Act.

2. Validity of the Notice and Order under Section 263 Issued in the Name of the Deceased:
The appellant contended that the notice and order under section 263 were invalid as they were issued in the name of the deceased. The Tribunal found this reliance misplaced, explaining that the notice under section 263 is not a jurisdictional notice but is meant to provide an opportunity of hearing to the assessee. The Tribunal referred to several Supreme Court decisions, including CIT v. Amitabh Bachchan, which clarified that section 263 does not require a specific show-cause notice but only an opportunity of hearing. The Tribunal also noted that the notice under section 263 was duly served on the appellant, and the proceedings were validly initiated. The Tribunal rejected the appellant's claim of non-receipt of the notice, finding positive material on record to establish service. The Tribunal concluded that the notice and order under section 263 were valid, as they were understood to be on the appellant in his capacity as the LR of the deceased.

3. Compliance with Section 194C(7) Regarding Non-Deduction of Tax at Source on Freight Payments:
The Tribunal examined the issue of non-compliance with section 194C(7) of the Act, which mandates furnishing particulars to the prescribed authority when claiming exemption from TDS under section 194C(6). The appellant argued that the short deduction of tax was due to a change in law and that the obligation to file the declaration in Form 15J became redundant. The Principal Commissioner of Income Tax (Pr. CIT) found the assessment order erroneous and prejudicial to the interests of the Revenue due to non-application of mind by the Assessing Officer (AO) and non-verification of facts. The Tribunal upheld the Pr. CIT's finding, noting that the AO's order lacked inquiry and verification. The Tribunal clarified that the prescribed form for compliance was Form 15-J, not Form 26Q as stated by the Pr. CIT. The Tribunal directed the AO to verify the relevant aspects in the set-aside proceedings and decide in accordance with the law. The Tribunal also rejected the appellant's claim that section 194C(7) is independent of section 194C(6), stating that the proper forum for this argument would be the assessing authority in the set-aside proceedings.

Conclusion:
The Tribunal found no reason to interfere with the impugned order and dismissed the assessee's appeal, upholding the validity of the assessment and the revision order under section 263. The Tribunal directed the AO to verify compliance with section 194C(7) in the set-aside proceedings.

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