Holding

Assessment orders made without notice to all legal representatives are not void; they are at most defective or irregular proceedings, and the revenue's right to assess remains.

Summary

The deceased B.N. Singh had not filed income‑tax returns for three assessment years and died leaving ten legal representatives. His eldest son, Jai Prakash Singh, filed the returns and the Income Tax Officer issued notices under sections 142(1) and 143(2) only to him, not to the other nine representatives, and proceeded to make assessment orders in the name of all ten legal representatives. Jai Prakash Singh later contended that the assessments were void because the other representatives were not served notice. The Appellate Assistant Commissioner and the Income Tax Appellate Tribunal held that the lack of notice was merely an irregularity, not a nullity, and remitted the matters for fresh assessment. The High Court reversed this view, declaring the assessments a nullity, but the Supreme Court reinstated the lower authorities' view, holding that procedural defects in notice do not erase the substantive tax liability and at most render the orders defective. Consequently, the revenue's appeal was allowed and the High Court judgment set aside.

Issues considered

Whether non‑service of notice under sections 142 and 143(2) to all legal representatives of a deceased assessee makes the assessment orders void or merely irregular.
Whether the omission to serve notice defeats the jurisdiction of the Income Tax Officer to assess tax liability.
Interpretation of section 159 of the Income Tax Act, 1961 regarding legal representatives as assessee.
Whether an assessment order defective in service of notice can be set aside as a nullity.

Legislation cited

Income Tax Act, 1961s. 139(4), s. 142, s. 143, s. 147, s. 159, s. 161, s. 162, s. 167, s. 2(29), s. 2(7)

Subjects

income tax assessmentlegal representativesnotice of assessmentprocedural irregularitynullity vs defectivenesssection 159tax liabilitynatural justice

Judgment

COMMISSIONER OF INCOME TAX, SHILLONG A
v.
),
JAi PRAKASH SINGH

MARCH 13, 1996

[B.P. JEEVAN REDDY AND S.B. MAJMUDAR, JJ.] B

Income Tax Act, 1961 :

-;· Ss.2(7),2(29), 142, 143, 159-Assessee-'Legal representatives'-Assess-
ment-Service of notice-Assessee died without filing retum~ne of legal
representatives filing retums-Notice served upon him but not issued to other
c
legal representatives-Assessment orders challenged as null and void for
non-_se1Vice of notice on all legal representatives--Held, omission to se11'e or
any defect in notices 111ay render assessnient order irregular but not void or
illegal.
D
The assessee, who had not filed returns for the assessment years
~
1965-66, 1966-67 amH967-68, died in 1967 leaving behind his legal repre-
sentatives. The eldest son' J' filed the returns for the aforesaid assessment
years. He was issued notices under ss.142(1) and 143(2) of Income Tax Act,
1961. Notices were not issued to other legal representatives nor any objec-
tion was raised that they should have been issued notices. Assessment
E
orders were made in the status of individual mentioning the names of all
the ten legal representatives against the column "Name of the assessee".
They were described as legal representatives of the deceased assessee. 'J'
filed appeals against the assessment order contending for the first time
1
~ that since all the legal representatives were not given notice of the assess- F
men! proceedings, the assessments made were illegal and void. The Appel-
late Assistant Commissioner held that non-service of notices npon all the
legal representatives was only an irregularity in completing the assess-
ment. He set aside the assessment orders and remitted the matters to the
Income Tax Officer for making fresh assessment after notice to all the legal
G
representatives. The further appeals filed by 'J' were dismissed by the
.,. ~ Income Tax Appellate Tribunal.

At the instance of the assessee a reference was made to the High
Court, which decided the reference in favour of the assessee holding that
in the absence of service of notice on all the representatives, the assessment H
377
378 SUPREME COURT REPORTS [1996] 3 S.C.R.

A made was a nullity and not a mere irregularity. Aggrieved, the Revenue
filed the present appeals.

Allowing the appeals, this Court

HELD : 1.1. The High Court was not right in holding that the assess-
B ment orders made are null and void. They are not. At the worst, they are
derective proceedings - or irregular proceedings - as has been rightly held
by the Appellate Assistant Commissioner and the Tribunal. (383-H; 384-A]

1.2. An omission to serve or any derect in the service or notices
provided by procedural provisions does not efface or erase the liability to
C pay tax where such liability is created by distinct substantive provisions
(charging sections). Any such omission or derect may render the order
made irregular - depending upon the nature or the provision not complied
with - but certainly not void or illegal. (387-F-G]

D Chatturam and Others v. Commissioner of Income Tax, Bihar, (1947)
15 l.T.R. 302 and Estate of Late Ranga/al Jajodia v. Commissioner of
Income-tax, Madras, (1971) 79 l.T.R. 505, relied on. ,

Maharja ofPatia/a v. Commissioner of Income Tax, (Central) Bombay,
(1943) 111.T.R. 202, rererred to.
E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2542-44
or 1977.

From the Judgment and Order dated 24.3.77 of the Assam High
Court in l.T.R. No. 39 of 1974.
F
)
.
Dr. V. Gauri Shankar Ms. A Subhashini and S.N. Terdol for the
Appellants.

N.R. Choudhary and D.N. Mukherjee for the Respondents.

G The Judgment of the Court was delivered by

B.P. JEEVAN REDDY, J. These appeals are preferred against the , J
judgment of the Gauhati High Court answering the following question in
favour of the assessee and against the revenue :

H "Whether on the facts and in the circumstances of the case, the
-?
C.l.T. v. JAIPRAKASHSINGH [B.P.JEEVAN REDDY,J.] 379

Tribunal was correct in holding that non-service of notice under A
section 143(2) of the Income-tax Act, 1961, against nine out of the
ten legal representatives of the deceased Shri B.N. Singh did not
invalidate the assessment orders of the Income-tax Officer relating
to the assessment years 1965-66, 1966-67, and 1967-68 and that it
was at best an irregularity for which the Appellate Assistant
Commissioner was justified in setting aside the assessments and it
B
was not a case fit for cancellation of the assessments"

One B.N. Singh had extensive business interests. He did not file a
return for the Assessment Years 1965-66, 1966-67 and 1967-68. He died on
April 16, 1967. He left behind ten legal representatives comprising three c
widows, four sons and three daughters. The eldest son, Jai Prakash Singh,
filed the returns for the said three assessment years on March 17, 1970,
November 12, 1970 and October 27, 1971 respectively. The returns were
signed by Jai Prakash Singh alone - not by other legal representatives. In
these returns, Jai Prakash Singh disclosed the income received by late B.N. D
Singh from all his business interests and properties. (It may be emphasised
( that B.N. Singh died after the close of the accounting year relevant to
Assessment Year 1967-68 - in fact, sixteen days after the commencement
of the Assessment year 1967-68). The returns filed by Jai Prakash Singh
were scrutinised by the Income Tax Officer who also issued notices under
Sections 142(1) and 143(2) to him, to appear and produce documents, E
accounts and other material. He complied with the same. No objection was
raised by Jai Prakash Singh before the Income Tax Officer in the said
assessment proceedings that notice must be given to the other legal repre-
sentatives of late B.N. Singh. Assessment orders were made mentioning the
i ~ names of all the ten legal representatives against the column "Name of the F
Assessee". They were described as "legal representatives of late B.N.
Singh". Assessment was made in the status of "individual" Appeals were
filed by Sri Jai Prakash Singh contending for the first time therein that
inasmuch as all the legal representatives of B.N. Singh were not given
notice of the assessment proceedings, the assessments made were illegal

•
. '
and void and must be so declared. The Appellate Assistant Commissioner
rejected the contention. While taking note of the fact that "B.N. Singh's
death and the names of his legal representatives were intimated to the
Income Tax Officer shortly after his death", he held that completing the
G

assessment without serving notices upon all the legal representatives was
only an irregularity in completing the assessment. Accordingly, he set aside H
380 SUPREME COURT REPORTS (1996] 3 S.C.R.

A the assessment orders and remitted the matters to the Income Tax Officer
for making fresh assessments after notice to all the legal representatives.
Jai Prakash Singh filed further appeals before the Tribunal raising the very
same contention but to no avail. It is then that the aforesaid question was
referred for the opinion of the High Court.

B The High Court referred to the definitions of "assessee" and "legal
representatives" in Clauses (7) and (29) of Section 2 as well as to Section
159 of the Act and held that in the absence of service of notice on all the
legal representatives, the assessment made upon them is a nullity and not
a mere irregularity. It has accordingly set aside the direction of the Appel-
C late Assistant Commissioner (affirmed by the Tribunal) remitting the mat-
ters to the Income Tax Officer for making fresh assessments after notice
to all the legal representatives.

The question that arises in these appeals is whether in the facts and
circumstances of the case, the orders of assessment made by the Income
D Tax Officer without notice to all the legal representatives of B.N. Singh are
null and void in law or merely irregular/defective proceedings which can
be set right by remitting the matters to Income Tax Officer for making fresh >
assessments with notice to all legal representatives.

E The expression 'assessee' is defined in Clause (7) of Section 2 in the
following words :

'"assessee' means a person by whom any tax or any other sum of
money is payable under this Act, and includes :

F (a) Every person in respect of whom any proceeding under
this Act has been taken for the assessment of his income or
of the income of any other person in respect of which he is
assessable, or of the loss sustained by him or by such other
person, or of the amount of refund due to him or to such
. other person:
G
(b) every person who is deemed to be an assessee under any
provision of this Act;

(c) every person who is deemed to be an assessee in default
H under any provision of this Act."
C.I.T. v. JAI PRAKASH SINGH [B.P. JEEVAN REDDY, J.] 381

Clause (29) in Section 2 defines the expression "legal representative" A
in the following words :

"2 (29) 'legal representative' has the meaning assigned to it in
Clause (11) of Section 2 of the Code of Civil Procedure, 1908 (5
of 1908)."
B
Section 2(11) of the Code of Civil Procedure defines the said expres-
sion as follows :

"2. (11) 'legal representative' means a person who in law represents
the estate of a deceased person, and includes any person who C
intermeddles with the estate of the deceased and where a party
sues or is sued in a representative character the person on whom
the estate devolves on the death of the party so suing or sued."

Section 159 of the Income Tax Act, which is relevant in this behalf,
reads: D
"159. Legal representatives. (1) where a person dies his legal
representative shall be liable to pay any sum which the deceased
would have been liable to pay if he had not died, in the like manner
and to the same extent as the decease.
E
(2) For the purpose of making an assessment (including an assess-
ment, re-assessment or recomputation· under Section 147) of the
income of the deceased and for the purposes oflevying any sum
in the hands of the legal representative in accordance with the
provisions of sub-section (1)-,
F
(a) any proceeding taken against the deceased before his
death shall be deemed to have been taken against the legal
representative and may be continued against the legal repre-
sentative from the stage at which it stood on the date of the
death of the deceased; G

(b) any proceeding which could have been taken against the
deceased if he had survived, may be taken against the legal
representative; and

( c) all the provisions of this Act shall apply accordingly. H
382 SUPREME COURT REPORTS [1996)3 S.C.R.

A (3) The legal representative of the deceased shall, for the purposes
of the Act, be deemed to an assessee.

(4) Every legal representative shall be personally liable for any tax
payable by him in his capacity as legal representative if, while his
liability for tax remains undischarged, he creates a charge on or
B disposes of or parts with any assets of the estate of the deceased,
which are in, or may come into, his possession, but such liability
shall be limited to the value of the asset so charged, disposed of
or parted with.

c (5) The provisions of sub-section (2) of Section 161, Section 162
and Section 167, shall, so far as may be and to the extent to which
they are not inconsistent with the provisions of this section, apply
in relation to a legal representative.

(6) The liability of a legal representative under this section shall,
D subject to the provisions of sub-section (4) and sub-section (5), be
limited to the extent to which the estate is capable of meeting the
liability."

Dr. Gauri Shankar, learned counsel for the Revenue, contended that
in the facts and circumstances of the case th., assessment orders cannot be
E said to be null and void. At worst, they are irregular orders. This is not a
case where no notice was served upon the legal representatives and an
assessment made. Even before service of any notice, returns were filed by
one of the legal representatives (Jai Prakash Singh) voluntarily. The returns
were filed by Jai Prakash Singh taking advantage of the provisions con-
F tained in sub-section (4) of Section 139; actually the time for ftling the
return had expired by the time they were filed. The violation, if any, was
not serious enough to declare the entire proceedings a nullity. Sri N.R.
Choudhary, learned counsel for the assessee, on the other hand, submitted
that an assessment made on persons without notice to them is a clear case
G of violation of principles of natural justice and, hence, the assessments are
null and void. Since the proceedings are a nullity in law there was no
question of sending the matters back to the Income Tax Officer for making
fresh assessments. The learned counsel commended the reasoning and
conclusion of the High Court for our acceptance.

H Before we proceed to answer the question it is necessary to keep in
C.l.T. v. JAI PRAKASH SINGH [B.P. JEEVAN REDDY. J.] 383

mind the facts of this case. B.N. Singh died on April 16, 1967. He failed lo A
file a return for the Assessment years 1965-66 and 1966-67 within the time
prescribed. So far as the Assessment Year 1967-68 is concerned, he, -of
course, died before the expiry of the period prescribed for filing the return.
No return was filed for the Assessment Year 1967-68 also within the
prescribed period. Jai Prakash Singh, however, wanted to take advantage B
of the provision contained in Section 139(4) which enables an assessee to
"furnish the return for any previous year at any time before the end of the
period specified in clause (b)" provided the assessment is not made by the
time of filing the return. (Clause (b) of the said sub-section specifies
various periods of limitation; in respect of the assessment years concerned
herein, it is four years from the end of the relevant assessment year.) The C
returns were filed voluntarily disclosing the income received by B.N. Singh
during the relevant accounting years by one of his legal representatives
inviting an assessment. The names of all the legal representatives were
already intimated to the Income Tax Officer (as found recorded in the
orders of the Appellate Assistant Commissioner and the Tribunal though D
the occasion for giving such information is not evident from the record. It ·
is also not clear who gave the information regarding the death of B.N.
Singh and his legal representatives and in what connection.). It is true that
the returns were signed only by J ai Prakash Singh and not by the other
nine legal representatives, but it should also be remembered that when
notices under Sections 142(1) and 143(2) were issued to Jai Prakash Singh, E
he appeared through his Authorised Representative and produced the
relevant books and accounts on the basis of which assessments were made.
Jai Prakash Singh did not raise an objection before the Income Tax Officer
that unless and until notices to all the other legal representatives are sent,
assessment orders cannot be made. He raised this question for the first F
time in the appeals preferred by him before the Appellant Assistant
Commissioner and thereafter before the Tribunal. It appears rather curious
that Jai Prakash Singh who had voluntarily filed the returns of income
should raise this issue; no other legal representative of B.N. Singh has come
forward with such a plea. We do not wish to go into the question whether

.
'
Jai Prakash Singh should at all have been allowed to so turri round and G
raise this plea in appeal, for the reason that the said issue is not before us
in these appeals.

We are of the opinion that the High Court was not right in holding
in the above circumstances that the assessment orders made are null and H
f
384 SUPREME COURT REPORTS (1996] 3 S.C.R.

A void. They are not. At the worst, they are defective proceedings - or
irregular proceedings - as has been rightly held by the Appellate Assistant
Commissioner and the Tribunal. In Chatturam and Others v. Commissioner
of Income Tax, Bihar, (1947) 15 I.T.R. 302, it has been held by the Federal
Court that the liability to pay the tax arises by virtue of Sections 3 and 4
of the Indian Income Tax Act, 1922 (charging sections) and that Section
B 22 and other Sections of the said Act are merely machinery provisions to
determine the quantum of tax. The following observations are apposite :

"The income-tax assessment proceedings commence with the issue
of a notice. The issue or receipt of a notice is not, however, the
c foundation of the jurisdiction of the Income-tax Officer to make
the assessment or of the liability of the assessee to pay the tax. It
may be urged that the issue and service of a notice under Section
22(1) or (2) may affect the liability under the penal clauses which
provide for failure to act as required by the notice. The jurisdiction
to assess and the liability to pay the tax, however, are not conditional
D
011 the validity of the notice. Suppose a person, even before a notice
is published in the papers under Section 22(1), or before he
receives a notice under Section 22(2) of the Income-tax Act, gets
a form of return from the Income-Tax Officer and submits his
return, it will be futile to contend that the Income-tax Officer is
E not entitled to assess the party or that the party is not liable to pay
any tax because a notice had not been issued to him. T7le liability
to pay the tax is founded in Sections 3 and 4 of the Income Tax Act,
which are the charging sections, Section 22 etc. are the machineiy
sections to detennine tile aniount of tax."
F I
(Emphasis added)

In Maharaja of Patiala v. Commissioner of Income Tax, (Central)
Bombay, (1943) 11 I.T.R. 202, a decision rendered by the Bombay High
Court, the facts were these: the late Maharaja of Patiala had income from
G property and business in British India. He died on March 23, 1938. On
November 23, 1938, the Income Tax Officer, Bombay sent two notices
under Sections 22(2) and 38 of the Indian Income Tax Act, 1922 addressed • •
to the Maharaja of Patiala requiring him to make a return of his income
from all sources for the Assessment Years 1937-38 and 1938-39. They were
H served upon the successor Maharaja. Returns were filed, signed by the
C.I.T. v. JAi PRAKASH SINGH [B.P. JEEVAN REDDY, J.] 385

Foreign Minister of Patiala. The Income Tax Officer passed assessment A
orders describing the assessee as "His Highness ..... .late Maharaja of
Patiala". The succeeding Maharaja appealed against the assessment orders
contending that inasmuch as the notices were sent in the name of Maharaja
of Patiala and not to him as the legal representative of the Maharaja of
Patiala, the assessments made were illegal. The contention was that the B
notices were really addressed to the late Maharaja, who was not alive when
the said notices were issued and that they were wrongly served upon him.
The argument was rejected by the authorities under the Act as well as by
the· High Court on reference. The Division Bench comprising Beaumont,
CJ. and Kania, J. held that inasmuch as the present Maharaja, (who raised
the contention of nullity) was the legal representative of the late Maharaja C
of Patiala and because the return of the Late Maharaja's income was made
by the Foreign Minister on his behalf and because he knew perfectly well
that what was being assessed was the income of his predecessor, the
assessment made, though not complying strictly with Section 24-B (Cor-
responding to Section 159 of the Present Act), is yet valid. The following D
observations of Beaumont, CJ., are relevant for our purpose :

"In this case the person to be assessed was the late Maharf!ja, who
had died before he was served with any notice under Section 22,
and, therefore, the provisions of Section 24B(2) apply, and the
Income-tax Officer was entitled to serve on the executor, ad- E
ministrator or other legal representative of the deceased Maharaja
a notice under Section 22(2) or under Section 34 as the case might
be, and then proceed to assess the total income of the deceased
Maharaja as if such executor, administrator or other_ legal repre-
sentative were the assessee. As observed by the president of the F
Tribunal in his judgment, the Income-tax officer made no attempt
to observe the provisions of that sub-section. He served the notice
on the present Maharaja, without showing in what capacity . But
the Tribunal have found, as a fact, that the present Maharaja is
the legal representative of the deceased Maharaja, and although
it would obviously have been better so to describe him in the notice, G
I am not prepared to say that the notice was bad, if it was served
on the legal representative, merely because it omitted to state that
it was served in that capacity. It should have been stated that it
was served on the legal representative of the late Maharaja, and
that the return required was of the late Maharaja's income. It was H
386 SUPREMECOURTREPORTS (1996] 3 S.C.R.

A not so stated, and the present Maharaja himself may have had
taxable income for the years in question; but I think there is a good
deal· of force in the contention of the Tribunal that any ir-
regularities in this respect were waived by the Maharaja, because
returns of the late Maharaja's income were made by the Foreign
Minister on behalf of the Maharaja, and then subsequently correc-
B
tions were made in the assessment at the instance of the Maharaja.
There is no doubt that the present Maharaja knew perfectly well
that what was being assessed was the income of his predecessor."

To the same effect are the observations of Kania, J. in his separ~te
C but concurring opinion. The decision, one of the earliest on the subject,
shows that an assessment made without strictly complying with Section
24-B (Section 159 in the present Act) is not void or illegal and that any
infractions in that behalf can be waived by the assessee.

D In Estate of Late Rangalal Jajodia v. Commissioner of Income-Tax,
Madras, (1971) 79 l.T.R. 505, it was held by this Court :

"The lack of a notice does not amount to the revenue authority
having had no jurisdiction to assess, but that the assessment was
defective by reason of notice not having been given to her. An
E assessment proceeding does not cease to be a proceeding under
the Act merely by reason of want of notice. It will be a proceeding
liable to be challenged and corrected."

The facts in this case are telling. They are : Rangalal J ajodia filed his
income tax return for the Assessment Years 1942-43 and 1943-44 under the
F
Income Tax Act as well as under the Excess Profits Tax Act. Before the f

assessments were completed, he died (on January 11, 1946). Rangalal had
a son, Shankar Lal, by his pre-deceased wife. He married a second time
and had children from the second wife, Aruna Devi. Rangalal executed a
will totally disinheriting Shankar Lal and appointing Aruna Devi and
G another as executors of his Will. The Income Tax Officer, probably un-
aware of the Will, gave notice to Shankar Lal, who objected that he is not
the legal representative of the deceased and that the second wife (Aruna • ,,.
Devi) and the other executor are the proper persons to the notified. The
Income Tax Officer called for a copy of the Will but it was not produced.
H The Income Tax Officer thereupon completed the assessment describing
j
\

C.l.T. v. JAi PRAKASH SINGH [B.P. JEEV AN REDDY, J.] 387

the assessee as "the estate of late Sri Rangalal J ajodia by legal heirs and A
representatives Sri Shankar Lal Jajodia son of Rangalal Jajodia, Smt.
1
.Aruna Devi wife of Rangalal Jajodia and her children". Appeals were
preferred by the second wife, Aruna Devi, contending inter alia that the
assessments having been made without notice to her or the other executor
were illegal and invalid. This plea was rejected by the Appellate Assistant B
Commissioner and the Tribunal, who remitted the matters to the Income
Tax Officer to complete the assessments after notice to Aruna Devi. The
High Court too rejected the said contention whereupon the matter was
brought to this Court, which held that absence of notice to Aruna Devi
makes the assessment merely defective but not null and void. It is in this
connection that the aforesaid observation was made. This Court sustained C
the direction given by the Appellate Assistant Commissioner to the Income
Tax Office to make fresh assessment on Aruna Devi in accordance of the
provisions of the Act. This decision, in our opinion, is sufficient to reject
the assessee's contention herein. If an assessment made with notice to
Shankar Lal (who was not really the legal representative of the deceased D
Rangalal) and without serving notice upon the lawful legal representatives
(Aruna Devi, the other executor or Aruna Devi's children) - that too,
despite the objection of Shankar Lal that he is not the legal representative
and that notice must be sent to Aruna Devi etc., who are the legal
representatives of the deceased Rangalal - is only "defective" and not null E
and void, ,it would be rather odd to contend that assessments made on the
basis of returns filed by one of the legal representatives (disclosing the total
income received by the deceased) is nuli and void ·on .the ground that
notices were not sent to other legal representatives. The principle that
emerges from the above decision is that an omission to serve or any defect
in the ~ervice of notices provided by procedural provisions does not efface F
or erase the liability to pay tax where such liability is created by distinct
substantive provisions (charging sections). Any such omission or defect
may render the order made irregular - depending upon the nature of the
provision not complied with - but certainly not void or illegal.
G
:;,,· • In this view of the matter, we do not think it necessary to refer to
certain other decisions of the High Courts cited before us which have
turned mainly on the basis of facts in each case. It is equally unnecessary
for us to go into the meaning of the expressions "void11 , "void ab initio",
"voidable" or 11 a nullity11 - a fairly complicated exercise. H
388 SUPREME COURT REPORTS [1996] 3 S.C.R.

A The appeals are accordingly allowed, the judgment of the High Court
set aside and the question referred answered in the affirmative, i.e., in
favour of the Revenue and against the assessee. The Revenue shall be
entitled to its costs which are quantified at Rupees ten thousand con-
solidated.

B R.P. Appeal aI:owed.