Law:

Section:

Section 24B(3) of the indian income-tax act, 1922 [Corresponding to section 159 of the Income-tax Act, 1961]-Legal representatives-Tax liability of deceased-After reopening assessment for escapement of income of over Rs. 1 lakh, and service of notice under section 22(4) for failure to file return under section 34(1a) assessee died-Reassessment completed after serving fresh notice under section 22(4) on legal representatives-Whether assessment could be validly completed on legal representatives under section 24b(3) without a fresh notice under sections 22(2) and 22(4)-Held, yes Facts For escapement of income of over Rs. 1 lakh, the assessment for the assessment year 1945-46 was reopened by issue of a notice under section 34(1A) of the 1922 Act on 29-3-1956. As no return was filed, a notice under section 22(4) of the 1922 Act was served on 12-7-1956 which was not complied with till 19-1-1958 when the assessee died. After his death, the ITO reassessed the income at Rs. 22,18,546. For not giving reasonable opportunity to the legal heirs and representatives, the AAC directed the ITO to make a fresh assessment. The ITO then issued to the legal representatives a notice under section 22(4) and its non-compliance culminated in the reassessment at Rs. 22,46,546. The legal representatives application under section 27 for reopening the assessment was rejected by the ITO. In appeal before the AAC against the rejection, the assessee challenged the legality of the assessment on the grounds that section 24B could not be invoked and that a fresh notice was not issued and that service of notice under section 22(4) was improper. The AAC allowed the appeal and directed the ITO to make a fresh assessment. On appeal, the Tribunal finally held that the legal fiction in section 34(1) that a notice under that section would be deemed to be a notice under section 22(2) was also applicable to section 34(1A) and, therefore, section 24B could be invoked to complete the assessment on the legal representatives without issue of any fresh notice under section 34(1A). On reference : Held 1.Since a notice under section 34(1A) was served on the deceased assessee, it was not necessary to serve a…

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