Law: Income Tax Act, 1961

Section: 256

Income-tax---Reference---Assessment---Return filed by assessee---Death of assessee before completion or assessment ---AA.C. setting aside assessment and directing fresh assessment---Assessment order whether void ab initio and Tribunal whether justified in setting aside order of A.A.C. and in not directing fresh assessment are questions of law fit to be referred. The assessee filed a return of his income but before the completion of the assessment, he died. The Appellate Assistant Commissioner set aside the order of assessment and directed the Income-tax Officer to make a fresh assessment after giving sufficient opportunity to the legal representatives of the deceased to be heard. The legal representatives of the deceased-assessee preferred a second appeal. The Tribunal allowed the appeal and set aside the order of the Appellate Assistant Commissioner. On a reference application under section 256(2) of the Indian Income-tax Act, 1961: Held, that the questions whether the Tribunal was justified in holding that the order passed by the Income-tax Officer was void ab initio and whether the Tribunal was justified in setting aside the order passed by the Appellate Assistant Commissioner and in not directing the Income-tax Officer to frame the assessment afresh, were questions of law fit to be referred. JUDGMENT G.G. SOHANI, ACTG. C.J.--By this application under section 256(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Revenue has prayed that the Income-tax Appellate Tribunal be directed to refer the following questions of law to this Court for its opinion: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessment order passed by the Income-tax Officer was ab initio void for his omission to include the legal heirs of the deceased in the assessment order? (2) Whether the Appellate Tribunal was right in setting aside the order of the Appellate Assistant Commissioner and in not passing a further order directing the Income-tax Officer to proceed with the assessment against the legal representatives of the assessee?" The material facts giving rise to this application, briefly,…

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