Legal representative notice valid, but reassessment failed for want of approval by the statutorily required higher authority.

In tax proceedings after an assessee's death, "legal representative" under the Income-tax Act has a wider meaning than "legal heir" under succession law, and notice served on a person who had already represented himself as legal representative was not invalid merely because he was not a Class I heir. However, where reassessment was sought under the extended limitation regime, approval had to be granted by the higher authority specified by section 151(ii); approval by the Principal Commissioner was not in conformity with that requirement and was therefore invalid. As a result, the reassessment notice could not be sustained because the mandatory approval condition was not met.

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Issues: (i) Whether notice issued in the name of a deceased assessee was invalid on the ground that it was served upon a person claiming only as legal representative and not as a legal heir; (ii) Whether approval for initiation of reassessment proceedings, when extended limitation was invoked, was required to be granted by the Principal Chief Commissioner of Income Tax rather than the Principal Commissioner of Income Tax.

Issue (i): Whether notice issued in the name of a deceased assessee was invalid on the ground that it was served upon a person claiming only as legal representative and not as a legal heir.

Analysis: Section 159 of the Income-tax Act, 1961 contemplates proceedings against the legal representative of a deceased assessee, and the expression "legal representative" is given the wider meaning under Section 2(11) of the Code of Civil Procedure, 1908. The concept is not confined to succession under the Hindu Succession Act, 1956 and does not require the recipient to be a Class I heir. Since the person concerned had himself responded in the capacity of legal representative and had projected himself as such before the Revenue, service of notice upon him could not be treated as void merely because he was not shown to be a legal heir in the strict succession-law sense.

Conclusion: The challenge to service of notice failed and the issue was decided against the assessee.

Issue (ii): Whether approval for initiation of reassessment proceedings, when extended limitation was invoked, was required to be granted by the Principal Chief Commissioner of Income Tax rather than the Principal Commissioner of Income Tax.

Analysis: For invocation of the extended period of limitation, the statutory safeguard under Section 151(ii) required approval from the higher designated authority. Approval granted by the Principal Commissioner of Income Tax was therefore not in conformity with the statutory scheme when the case attracted the extended limitation regime.

Conclusion: The approval was invalid and the issue was decided in favour of the assessee.

Final Conclusion: The reassessment notice could not be sustained because the mandatory approval requirement was not satisfied, even though the objection based on service on the legal representative was rejected.

Ratio Decidendi: For tax proceedings following the death of an assessee, "legal representative" under the Income-tax Act has a broader meaning than "legal heir", and where extended limitation is invoked for reopening, approval must be obtained from the authority specified by the statute for that situation.

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