ORDER
A.V. Balasubramanyam, Judicial Member
1. All these appeals were consolidated for a common hearing since they arise out of the same set of facts.
2. The appellants are one V. Ratna and V. Sridhar who are the legal heirs of a certain deceased by name Venkatadri. The appeals relate to assessment years 1961-62 and 1964-65. Venkatadri was doing business and was assessed to tax. The original assessments for 1961-62 and 1964-65 had been completed on 26-12-1961 and 21-3-1969 respectively. Venkatadri died on 23-1-1970.
3. The assessment for 1961-62 had to be reopened for certain reasons. A notice under Section 148 was issued on the eldest son of Venkatadri on 27-3-1970. The eldest son is V. Vijaykumar. The re-assessment proceeding was conducted against the estate of Venkatadri which had been represented by the eldest son Vijaykumar and concluded under Section 144 read with Section 147. The assessment for 1964-65, the original assessment was set aside by the Tribunal and the matter was remitted to the Income-tax Officer to re-do the same. As records show, there was no proper co-operation by Vijaykumar. The re-assessment was made under Section 144. The Income-tax Officer raised demands and a property in Bangalore was attached and sought to be sold. Venkatadri had left behind other heirs and they challenged legality of the recovery proceeding in writ petitions filed in the High Court of Karnataka. There were two questions in those writ petitions. One was that the property in Bangalore did not belong to the estate of late Venkatadri and the claim was that it belonged to Anusuya wife of Venkatadri. The other point raised was that all the legal heirs had not been served with notice in re-assessment proceedings. The High Court passed the following order: “I quash Notice No. T.R. Out/V7 etc. dated nil (Exhibit D) and the order of even number dated 2-3-1976 (Exhibit-F, which however does not preclude the appropriate authorities from issuing a notice of demand, treating the petitioner as ‘an assessee in default’ and recover the amounts that are found due in accordance with law. But, till fresh proceedings are initiated by the respondents or by such other competent officers or for a period of six months from this day, whichever is later, the attachment of immovable property bearing No. 228, IX Cross, N.R. Colony, Bangalore specified in Exibit -F shall subsist, which however does not prevent the respondents or the appropriate authority from effecting a fresh attachment of the said property at any time, in accordance with law.” Subsequently, the Recovery Officer issued demand notice against the other legal representatives. V. Ratna and V. Sridhar (among others) are such legal representatives to whom demand notice had been served pursuant to the order passed by the High Court of Karnataka. V. Ratna and V. Sridhar filed appeals challenging the re-assessments passed. The contention raised in the appeals was that no notice had been issued to them before the reassessments were made and that the assessment against the estate represented by Vijaykumar should not be made operative as against these legal representatives. The Commissioner of Income-tax (Appeals) passed identical orders in all the appeals rejecting the contention. The said legal representatives are on further appeal to the Tribunal.
4. Late Venkatadri left behind the following seven heirs:
V. Vijaykumar (son)
V. Bhaskar (son)
V. Sridhar (son)
V. Shantha (Married daughter)
V. Subba Lakshmi (Married daughter)
V. Ratna (Married daughter)
V. Anusuya (wife).
As mentioned earlier, V. Vijaykumar, the eldest son, had been noticed under Section 148. At the hearing, we verified the fact and notice issued under Section 148 had been received by Vijaykumar. Shri Prasad, the learned counsel for the assessees, contended that there was no full and proper representation of the estate by all the legal heirs and that the assessments framed should not be enforced as against these legal representatives who had not received a notice. In this connection, he cited the decision of the Supreme Court in the case of ITO v. Maramreddy Sulochanamma [1971] 79 ITR 1; First Addl. ITO v. Mrs. Suseela Sadanandan [1965] 57 ITR 168; the decision of the Mysore High Court in the case of C.N. Nataraj v. Fifth ITO [1965] 56 ITR 250 and the decision of the Karnataka High Court in the case of K. Ashok Kumar v. CIT [1986] 162 ITR 543/29 Taxman 173. For the revenue, it was argued that the eldest son Vijaykumar had substantially represented the estate and that the re-assessment made against the estate of Venkatadri is capable of being enforced against all the legal representatives subject to their liability under law.
5. The doctrine of legal representation has been succinctly stated by the Supreme Court in the case of Daya Ram v. Shyam Sundari AIR 1965 SC 1049. A decree or order of the Court would bind not merely those impleaded but also the entire estate including those not brought on record if the legal representative brought on record had sufficiently represented the estate there being no oblique motive to leave away the others from bringing on record. This principle stated in the context of suits and appeals is one of general application, that it may be applied even in tax proceedings as pointed out by the Supreme Court in the case of Mrs. Suseela Sadanandan (supra) the relevant observation being in page 174.
6. In the present case, the eldest son Vijaykumar had represented the estate. It is not as though notice had been issued only to the eldest son Vijaykumar and it is necessary to extract the following facts found by the Commissioner of Income-tax (Appeals). His order reads:
… The show-cause notices have been issued to both for all the assessment years in question. However, the assessment order for 1961-62 and 1964-65 mentions only Sri Vijaykumar and the orders have been served on him…. The ITO had acted in a bonafide manner by impleading Smt. Anusuya as well as B. Vijaykumar as the legal heirs of the estate of the deceased. The mere mention of Vijaykumar in the assessment order cannot invalidate the assessment….
The widow of the deceased had some time petitioned to the Commissioner of Income-tax (a copy is on record) which does not say that there is any dispute among the several legal heirs. All that she was contending was that the property in Bangalore sought to be sold for recovery of the amount due did not belong to the deceased Venkatadri and it was her personal property. Even the assessees before us (V. Ratna and V. Sridhar) do not say that there is any dispute between them and Vijaykumar or the mother. All of them are only interested in contending that the property in Bangalore did not belong to the deceased Venkatadri. We do not also find from the record that the Income-tax Officer had with any design not issued a notice to the other legal representatives. While Vijaykumar resided at Madras where the re-assessments were made, the others were residing at far off places. All the daughters had been married and in the absence of proper co-operation by Vijaykumar, the Income-tax Officer must have been compelled to proceed with the re-assessments after issuing notice only to the eldest son and the wife. In the circumstances, it cannot be said that there was any oblique motive on the part of the Income-tax Officer in not issuing notices to all the legal representatives. There being no dispute between the various legal heirs inter se, we are of the view that the representation by the eldest son Vijaykumar was substantial so as to bind the assessments against legal representatives not served.
7. The facts in the case of Maramreddy Sulochanamma (supra) are entirely distinguishable. There were misunderstandings amongst the several heirs of the deceased. Further, the Supreme Court remitted the matter to the High Court for re-determination with directions to conduct certain inquiry.
8. The facts in the case of Mrs. Suseela Sadanandan (supra) are also distinguishable. In that case, a person had executed a will binding more than one executor and as the facts were inadequate, the matter was remanded to the High Court to enable it to come to a definite conclusion.
9. In the case of C.N. Nataraj (supra), notice issued to minors had been served on persons not authorised to receive notices.
10. In the case of K. Ashok Kumar (supra), the eldest son to whom notice had been issued had raised a ground that the other legal representatives also must be notified and that the estate had not been properly represented by him. Since the eldest person had himself taken a plea in the assessment proceedings, a direction was issued to issue notices to the other legal representatives. It is worth of note that Vijaykumar, the eldest son, had not raised an objection that there were other legal heirs who should have been brought on record, as pointed out by the Commissioner of Income-tax (Appeals). This case law is not an authority where the eldest son had substantially represented the estate of the deceased. Whether there was substantial representation of the estate by one legal heir is essentially a question of fact to be decided in reference to peculiar facts of that case. On the legal issue, the leading precedent is that of the Supreme Court in the. case of Daya Ram (supra), which has been subsequently referred to in Mrs. Suseela Sadanandan’s case (supra).
11. In the light of these decisions, we are clearly of the view that the eldest son Vijaykumar had substantially represented the estate of the deceased Venkatadri and the assessments are binding on all the legal heirs.
12. So far as the liability of the legal representatives, Section 159(6) is clear in terms and it is limited to the extent to which the estate is capable of meeting the liability. Even the order of the Commissioner of Income-tax (Appeals) observes this fact. Whether a particular asset or property belongs to the estate of the deceased or not, it is a question to be decided independently and this is wholly immaterial for the sake of assessments. The Commissioner of Income-tax (Appeals) has, in paragraph 5 of the order stated:
… It is open to the legal heirs to prove by evidence before the appropriate authorities that they have not received any property from the estate of the deceased and the entire exercise towards the realisation of tax is an exercise in futility. Thus the appellant should seek remedy by proving by positive evidence regarding the extent of the estate received from the deceased so that the liability to tax, etc., can be regulated in accordance with Section 159(6) of the Act.
Shri Prasad contended that the above observation should be expunged. While dealing with a quantum appeal it is not necessary to decide what property belongs to the estate of the deceased and how a dispute in this regard should be resolved. While it is enough to observe that all the properties which belonged to the estate of Shri Venkatadri should be amenable for meeting the liability under the assessment, it is unnecessary to make any comment in this regard and the observation of the Commissioner of Income-tax (Appeals) extracted by us above requires to be expunged. We do so. The gravamen of the legal heirs, including the wife Anusuya, seems to be that the property in Bangalore City and sought to be sold in the recovery proceedings was the personal property of Anusuya. While not mentioning anything in regard to this dispute as being not relevant for the present appeals, we need not observe that the liability of the legal representatives is limited to the extent the assets of the estate (if any) of Venkatadri for meeting the outstanding demand as provided in Section 159(6). With this observation, we dispose of the appeals by the following order.
13. The appeals are dismissed, subject to the observations in paragraph 12.