Assessment after death between hearing and order: court applies continuance principle to sustain assessment while deeming representatives liable

Where death of an assessee occurs between conclusion of hearing and making of assessment, section 159 deems the legal representative to be an assessee and proceedings to continue against them; nevertheless the court applied the principle underlying Order 22, rule 6 of the CPC to tax proceedings and held that an assessment pronounced after death without fresh notice to legal representatives is not automatically nullity but may be a curable defect, thereby sustaining the assessment and ruling against the assessee with the effect that revenue's assessment stands.

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Issues: (i) Whether the Tribunal was correct in setting aside the Commissioners order and directing the Assessing Officer to issue notice to the legal representatives and bring them on record; (ii) Whether the assessment order made without issuing notice to the legal representatives, where death occurred after conclusion of hearing but before pronouncement of assessment, is invalid or merely a curable defect.

Issue (i): Whether the Tribunal was correct in setting aside the Commissioners order and directing the Assessing Officer to issue notice to the legal representatives and bring them on record.

Analysis: Section 256(1) reference and section 159 establish liability and procedure regarding legal representatives; principles underlying Order 22, Rule 6 CPC permit pronouncement of orders notwithstanding death occurring between conclusion of hearing and pronouncement where public policy dictates avoidance of prejudice by delay. Precedents applying the principle to statutory proceedings support extending the Rule 6 principle to assessment proceedings under the Act where proceedings had commenced during the deceased's lifetime and hearing had concluded before death.

Conclusion: The Tribunal was not correct to set aside the Commissioners order in favour of the assessee; the direction to annul the assessment in those circumstances is not justified.

Issue (ii): Whether the assessment order made without issuing notice to the legal representatives, where death occurred after conclusion of hearing but before pronouncement of assessment, is invalid or merely a curable defect.

Analysis: Section 159 deems proceedings against the deceased to continue against the legal representative and deems the legal representative an assessee for purposes of the Act. Where hearing has been concluded during the life of the assessee, applying the policy underlying Order 22, Rule 6 CPC supports validating continuation and completion of the proceeding without abatement; failure to issue fresh notice to legal representatives in such circumstances is a curable defect, correctable by issuing notice and bringing them on record, rather than rendering the assessment void ab initio.

Conclusion: Non-issuance of notice to the legal representatives in the specified facts does not invalidate the assessment; it is at best a curable defect to be rectified by issuing notice and bringing legal representatives on record.

Final Conclusion: The reference questions are answered against the assessee; the assessment proceedings where death occurred after conclusion of hearing may be continued and finalized, and defects arising from omission to issue fresh notice to legal representatives are remediable rather than fatal to the assessment.

Ratio Decidendi: Where death occurs after conclusion of hearing but before pronouncement of an assessment, the principle underlying Order 22, Rule 6 CPC applies to Income-tax proceedings: such proceedings do not abate and an assessment made without fresh notice to legal representatives is a curable defect, correctable by issuing notice and bringing legal representatives on record.

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