Income-tax assessment after taxpayer's death: no legal heir substituted or noticed u/s159, so assessment void and quashed.

Where an assessee dies, s.159 of the Income-tax Act fastens liability on the legal representative to the same extent as the deceased, but a valid assessment must be made after bringing the legal heir on record and issuing notice to the legal heir. Since, after the assessee's death, no legal heir was substituted and no notice was issued in the legal heir's name, the assessment framed in the deceased's name was void ab initio and non est in law. Consequently, the impugned assessment order was quashed and the appeal was allowed.

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Issues Involved:
The judgment involves issues related to completion of assessment in the name of deceased assessee, legal heir's liability, validity of notice u/s 147/148, addition on account of non-genuine purchases.

Completion of Assessment in the Name of Deceased Assessee:
The appeal was filed by the legal heir of the assessee challenging the order passed u/s 250 of the Income Tax Act, 1961 by the learned Commissioner of Income Tax (Appeals). The main grievance raised was against the completion of assessment in the name of the deceased assessee. The legal heir contended that the assessment order against the deceased person was null and void, and thus, impugned. The legal heir also argued that the legal representative was not brought on record, which was necessary as per previous judgments. The tribunal observed that the legal heir was not brought on record and no notice was issued in the name of the legal heir, making the assessment order framed in the name of the deceased assessee non-est in law, and hence quashed.

Legal Heir's Liability:
The legal heir of the assessee specifically submitted that the assessee had passed away before the assessment order was issued. The Death Certificate and medical report were furnished as evidence. The tribunal noted that the legal representative did not inform the Assessing Officer about the demise of the assessee. Citing a judgment, it was observed that in the absence of a statutory provision, it is not obligatory for legal representatives to inform the tax department about the death of the assessee. However, as per section 159 of the Act, the legal representative is liable to pay any sum the deceased would have been liable to pay. In this case, since the legal heir was not brought on record and no notice was issued in their name, the assessment order in the name of the deceased was deemed non-est in law and quashed.

Validity of Notice u/s 147/148:
The legal heir contended that the notice u/s 147/148 issued by the Assessing Officer was not valid as there was only mechanical approval by the Principal Commissioner of Income Tax without proper application of mind. The tribunal, however, focused on the issue of completion of assessment in the name of the deceased assessee and did not delve into the validity of the notice u/s 147/148.

Addition on Account of Non-Genuine Purchases:
The Assessing Officer had made an addition of Rs. 1,12,06,190 to the total income of the assessee on account of non-genuine purchases. The legal heir challenged this addition, but the tribunal, after quashing the assessment order due to procedural irregularities, did not delve into the merits of this specific addition.

In conclusion, the appeal was allowed by the tribunal based on the procedural irregularity of completing the assessment in the name of the deceased assessee without involving the legal heir. The other grounds raised in the appeal were rendered academic and kept open due to the primary issue being resolved.

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