Assessment proceedings against deceased assessee and continuation against legal heirs where notice served on authorised representative requires record update

Assessment proceedings initiated while the assessee was alive do not become a nullity solely because legal heirs failed to notify the tax department of the assessees death; where notices were duly served on the authorised representative, the assessing officer may continue proceedings against the legal heirs and pass assessment after affording opportunity of hearing. The surrounding facts and conduct are relevant to whether proceedings proceed against successors. The matter was remitted for the assessing officer to bring legal heirs on record, continue proceedings in accordance with law and permit the legal heirs to present their case on merits.

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Issues: Whether an assessment order framed in the name of a deceased assessee (death occurring after initiation of proceedings but before completion) is null and void ab initio or is a curable defect requiring issuance of notice to legal heirs and continuation of proceedings.

Analysis: At the time when assessment proceedings were initiated the assessee was alive and notices were served on the authorised representative; the Department had no knowledge of the death. Judicial authorities recognise that where the Department has been informed of death before framing assessment, an assessment in the name of the deceased without bringing legal representatives on record is void ab initio. However, where death occurs after proceedings are initiated and the Department was unaware, the defect of not issuing notice to legal representatives is susceptible of cure under section 159 and by applying the policy principle reflected in Order 22 Rule 6 CPC. Authorities hold that proceedings commenced against a living assessee are, by fiction, treated as having been taken against legal representatives and that the proper remedy is to bring legal representatives on record and afford opportunity of hearing rather than treating the assessment as an absolute nullity. In the present case the legal heirs filed appeal after assessment, and there was no intimation of death to the Department during assessment; on these facts the defect was curable and not a ground to strike down the assessment as void ab initio.

Conclusion: The assessment is not null and void; the defect of framing assessment in the name of the deceased is curable. The matter is restored to the Assessing Officer to bring the legal heirs on record, issue necessary notices and proceed afresh after giving opportunity of hearing.

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