Law:

Section:

Section 246(n) [as it stood prior to 10-7-1978], read with sections 237, 239 and 240, of the income-tax act, 1961-Appeal to appellate assistant commissioner-Appealable orders-Tax deposited by assessee as per provisional assessment-Assessee died before regular assessments were made-On appeal by assessee legal representatives against regular assessments, tribunal set aside regular assessments as ito had not noticed legal representatives-In consequential order, ito found no liability for tax but ordered non-refund of deposit-Whether an appeal lay against ito's order-Held, on facts, yes Facts For the assessment years 1962-63 and 1963-64, provisional assessments under section 141 were made on the basis of the returns of the assessee, who died in 1964. Regular assessments qua those years were made after the assessee's death. On appeal by the assessee's legal representatives against the regular assessments, the AAC though reduced the taxable income yet did not set aside the regular assessments. A further appeal to the Tribunal was then filed by the legal representatives. The Tribunal cancelled the regular assessments for both the years on the ground that legal representatives were not noticed by the ITO before making the regular assessments after the death of the assessee. The ITO then made a consequential order for both the assessment years showing therein the revised income as nil. However, a notice was also appended to this order, passed by the ITO, in which it was stated that the tax deposited by the assessee, as a result of the provisional assessments during his lifetime, was not to be refunded. Thereupon, the legal representatives filed appeal before the AAC against the ITO's order of not refunding the tax deposited. The AAC held that the appeal was not maintainable and, accordingly, the same was dismissed. The Tribunal sustained the AAC's order in a further appeal. On reference, the assessee contended that the appeal was maintainable by virtue of clause (n) of section 246, which provided for an appeal against 'an order under section 237'. He argued that section 237 had to be read along with section 240 and if that was done, the ITO's direction to not to refund…

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