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Issues: (i) Whether an assessment/reassessment completed in the name of a deceased person is void ab initio when the reassessment proceeding was validly initiated while the assessee was alive; (ii) Whether, having regard to section 159 of the Income-tax Act, 1961, the correct remedy is to quash the assessment or to restore the matter to the Assessing Officer to bring legal representatives on record and proceed afresh.
Issue (i): Whether an assessment/reassessment completed in the name of a deceased person is void ab initio when the proceeding was validly initiated while the assessee was alive.
Analysis: The notice under section 148 was issued while the assessee was alive and subsequent proceedings were begun; the assessee died during pendency of the proceedings and the Assessing Officer completed assessment in the name of the deceased. Section 159 governs continuation of proceedings against legal representatives where proceedings were initiated before death. Judicial precedents distinguish cases where notices were issued to a deceased person from cases where proceedings commenced during the life of the assessee and continued after death.
Conclusion: The assessment completed in the name of the deceased is an irregularity and not void ab initio where jurisdiction was validly assumed while the assessee was alive.
Issue (ii): Whether the appropriate remedy is quashing the assessment or restoring the matter to the Assessing Officer to implead legal representatives and proceed.
Analysis: Applying section 159(2)(a) and relevant precedents, continuation of proceedings against legal representatives is permissible from the stage at which they stood on the date of death. Where legal heirs were aware of proceedings and made some compliance but did not timely provide full details or formally get impleaded, the defect is curable. The competent course is to direct the Assessing Officer to bring legal representatives on record, afford them opportunity of hearing, and reframe the assessment in their names.
Conclusion: The matter is to be restored to the Assessing Officer with directions to implead the legal representatives, provide opportunity of hearing, and reframe the assessment in accordance with law; quashing of the assessment is not warranted.
Final Conclusion: The appeal is allowed for statistical purposes and the matter is restored to the file of the Assessing Officer to bring the legal representatives on record and proceed to reframe the assessment after giving them proper opportunity of being heard.
Ratio Decidendi: Where a valid notice under section 148 is issued during the life of the assessee, continuation of proceedings after the assessee's death is governed by section 159 and an assessment made in the name of the deceased is a curable irregularity, not a nullity, and the proper remedy is to implead legal representatives and proceed rather than quash the assessment.
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