ORDER
U.B.S. Bedi, J.M.
1. These two appeals of the assessee are directed against the consolidated order passed by the learned CIT(A), Jammu, with headquarters at Amritsar, dt. 23rd March, 1998, relevant to the asst. yrs. 1989-90, 1990-91 and 1991-92 whereas these appeals concern the asst. yrs. 1989-90 and 1990-91.
2. The assessee has raised the following identical grounds of appeals :
“1. That the learned CIT(A) has in view of the facts and circumstances of the case, grossly erred in law and fact in upholding assessment proceedings started under Section 147 by issuing notice under Section 148 to ‘S. Swaran Singh, manager and attorney of Shri Mohan Singh (Deceased)” through L/H (authorising Sh. Swaran Singh general attorney).
2. That the proceedings started are illegal and bad in law and do not confer lawful jurisdiction on the ITO. Again the assessment made is also illegal, inoperative and unlawful, being against the provisions of law. The same has been wrongly upheld.
3. That the learned CIT(A) has, in view of the facts and circumstances of the case, further erred in confirming the action of the ITO in making the assessments in the status of individual and in not accepting the status of HUF as claimed.
4. That the learned CIT(A) has, in view of the facts and circumstances of the case, further erred in law in confirming the AO’s action in assessing the rental income as ‘income from house property’ and not accepting the appellant’s claim that the same was agricultural income.
5. That the learned CIT(A) has further erred in upholding the estimate of agricultural income,
6. That the observations made are against facts and are based on surmises and conjectures and do not afford any legal justification to the assessment made. The explanations given and the evidence placed on record has not been judiciously considered.
7. That the amounts of interests under Sections 234A, 234B and 234C have been wrongly charged and upheld.”
3. The assessee has challenged before the learned CIT(A) initiation of assessment proceedings under Section 147 on the legal ground that issuance of notice under Section 148 to Shri Swaran Singh, manager and attorney of Shri Mohan Singh (Deceased) through legal heir (authorising Shri Swaran Singh, general attorney) is illegal and bad in law as it does not confer lawful jurisdiction on the AO to either initiate proceedings under Section 147 or make assessment on the basis of such illegal notice. Assumption of jurisdiction by issuance of invalid notice vitiated the proceedings so assessment framed consequent upon such notice is bad in law and could not be sustained. It was further stated that return of income filed by Shri Swaran Singh as general attorney was not a valid return. It was further submitted that after the death of Shri Mohan Singh on 2nd Feb., 1991, there could not be any attorney entitled to act on his behalf and, therefore, status of Shri Swaran Singh as attorney of Shri Mohan Singh would not be relevant for the purpose of income-tax proceedings.
4. The learned CIT(A) while considering but not accepting the plea of the assessee has concluded to reject such plea as per paras 2.2 to 2.4 of his order as under:
“2.2 I have considered the above facts and arguments. In this case, returns of income have been filed by Shri Swaran Singh after the death of Shri Mohan Singh. These returns of income pertaining to the income earned by Shri Mohan Singh have been filed voluntarily.
2.3 It is admitted by the appellant that Shri Swaran Singh is holding general power of attorney from Shri Gurbilas P. Singh and Shri Ranjit Singh sons of Shri Daljit Singh and grandsons of Shri Mohan Singh (Deceased). These grandsons are two of the legal heirs of Shri Mohan Singh (Deceased). Since Shri Swaran Singh is a legal representative of the deceased, notices under Section 148 could be legally and validly served upon Shri Swaran Singh. Legal representative for the purpose of Section 159 has been defined in terms of Section 2(11) of the CPC and it includes legal heirs as well as general attorney for any legal heir. Shri Swaran Singh, therefore, is covered by the definition of legal representative for the purpose of Section 159. Moreover, in his capacity as general attorney for legal heirs of Shri Mohan Singh, Shri Swaran Singh was competent to sign the returns of income.
2.4 It is further seen that during the course of assessment proceedings no such dispute was raised and Shri Swaran Singh by his consent conferred validity upon the returns, notices as well as upon the proceedings. The error in the description of Shri Swaran Singh in the notices in my view is not material keeping in view the facts that Shri Swaran Singh is legally liable to be treated as a representative assessee. Moreover, the technical error stands validated by Shri Swaran Singh when he filed the returns, accepted the notices, acted upon the notices, as well as participated in the assessment proceedings. Accordingly, I hold that proceedings initiated by issue of notices to Shri Swaran Singh are valid. The first two grounds of appeal, therefore, rejected.”
5. Still aggrieved by the order of the learned CIT(A), the assessee is in further appeal and while reiterating the submissions as made before the lower authorities, it was pleaded for quashment of the assessment order. It was also submitted that assessment can only be framed against legal representative and Section 2(11) of the CPC defines “legal representative”. By placing reliance on Rawatmal Harakchand v. CIT (1981) 129 ITR 346 (Cal) and Jindal Photo Films Ltd v. Dy. CIT (1998) 234 ITR 170 (Del), it was emphatically argued that estate of deceased could not be represented by any outsider without having legal authorisation for the same, so issuance of notice under Section 148 in the name of so-called manager and attorney as well as assessment framed in his name as legal heir is unwarranted and not called for, which should be quashed. It was also submitted that in case the assessee’s first ground is accepted, he will not press for other grounds, which may be dismissed.
6. The learned Departmental Representative, while relying upon the orders of the authorities below has pleaded for confirmation of the order of the learned CIT(A). It was further submitted that since all the legal heirs of the deceased, Shri Mohan Singh, have authorised Shri Swaran Singh as general attorney, therefore, initiation of assessment proceedings as well as assessment made is legal and proper, therefore, the same has rightly been made by the AO and confirmed by the learned CIT(A) and it was urged for further confirmation of the impugned order for all the two years. It was also submitted that for the asst. yr. 1991-92 initiation of proceedings as well as assessment was made in the similar manner and the assessee has paid the taxes by availing KVSS, therefore, in this way, the assessee has also accepted the orders passed by the tax authority, therefore, the impugned order should be upheld.
7. In order to counter the submissions as made by the learned Departmental Representative, the learned counsel for the assessee submitted that merely by paying the tax under KVSS cannot make the invalid order as valid order. Since initiation of the proceedings in the name of attorney of deceased person are bad in law, therefore, consequential proceedings are also bad in law and cannot sustain in the eye of law, as such, liable to be quashed.
8. After hearing both the sides and considering the material on record, I find that Mr. Mohan Singh has expired on 2nd Feb., 1991, and notices under Section 148 for the asst. yrs. 1989-90 and 1990-91 have been issued by the ITO, Ward-2(8), Amritsar, on 30th March, 1993, which are addressed as under :
Shri Swaran Singh,
Manager & Attorney of
Shri Mohan Singh (deceased)
C/o M.B.M. Farms,
Opp. Rajiv Cold Storage & Ice Factory,
G.T. Road,
Amritsar.
and assessment has been framed in the name of Shri Swaran Singh (deceased) through L/H (authorising Shri Swaran Singh, general attorney), M.B.M. Farms, Opp. Rajiv Cold Storage & Ice Factory, G.T. Road, Amritsar, vide consolidated order for the asst. yrs. 1989-90, 1990-91 and 1991-92 on 25th March, 1997 determining total aggregating income of Rs. 1,49,334, Rs. 1,66,000 and Rs, 1,66,000 for the asst. yrs. 1989-90, 1990-91 and 1991-92, respectively.
9. So far as the assessment on legal representative is concerned, the specific provision in Section 159 reads as under:
“159(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 deceased.
(2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under s, 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of Sub-section (1),–
(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 representative from the stage at which it stood on the date of the death of the deceased;
(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.
(3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be 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 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.
(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, 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.”
10. Since Shri Swaran Singh is neither a legal representative nor could be said to be manager and attorney holder of the deceased after his death on 2nd Feb., 1991 and moreover, he has not been authorised as such by all the legal heirs with respect to the estate of the deceased. Therefore, issuance of notice in his name as indicated in the preceding paragraph cannot be held to be a valid notice to tax the estate of the deceased. Law is very clear on this point and there is no doubt that assessment can be framed against the legal representative and Section 2(29) of the IT Act refers to the meaning of “legal representative” as assigned to it in Clause (11) of Section 2 of CPC, and Section 2(11) of CPC reads as under:
“(11) ‘legal representative’ means a person who in law represents the estate of a deceased person, and includes any person who inter-meddles 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:”
Conjoint reading of Section 159 of the IT Act and Clause (11) of Section 2 of CPC would make it clear that Shri Swaran Singh cannot be held to be legal representative of Shri Mohan Singh (Deceased) nor would he represent the estate of the deceased in the correspondent explanation. Therefore, proceedings under Section 147/148 cannot be initiated in the manner in which these are initiated in this case. As such assessment framed on the basis of such illegal notice cannot be held to be valid. Therefore, while accepting the plea of the assessee, I quash the assessments framed by the AO and confirmed by the learned CIT(A). Since the assessments are being quashed on the very first legal ground, therefore, other grounds are dismissed as alternatively pleaded by the learned counsel for the assessee.
11. As a result, both the appeals of the assessee are accepted.