Law: Income Tax Act, 1961

Section: 159,271(1)(c).,254

(a) Income-tax----Penalty---Concealement of income---Legal representative--Assessment completed on legal heir of deceased---Penalty imposed on legal heir---Legal heir is a deemed assessee---Initiation of penalty proceedings against legal heir justified---Indian Income Tax Act, 1961, Ss. 159 & 271(1)(c). (b) Income-tax---Appeal to Appellate Tribunal----Powers of Tribunal---Power to remand--­New plea raised for first time before Tribunal in penalty proceedings that assessee was ill during relevant period---Tribunal justified in remanding matter to Assessing Officer---Indian Income Tax Act, 1961, S. 254. It was the legal heir of Dr. N. Dr. N died and the assessments were completed on the legal heir T. Penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961, were initiated against the legal representative. The Commissioner of Income-tax (Appeals) cancelled the penalties. On appeal to the Tribunal for the first time a plea was taken that the deceased was ill during the relevant period and hence the correct income could not be filed. The Tribunal restored the matter to the Assessing Officer to find out whether the assessee was ill. On a reference: Held, (i) that since the plea of illness was raised for the first time before the Tribunal which required enquiry into facts the remand was justified; (ii) that the heir was liable to pay the tax and treated as deemed assessee under section 159 of the Act after the death of her father and hence the initiation of penalty proceedings against the legal heir was justified. JUDGMENT On these applications under section 256(1) of the Income Tax Act, 1961, the Tribunal has referred the following questions for both the reference applications for the assessment years 1983-84 and 1984,85 for our opinion. "(1) Whether, on the interpretation of section 159 of the Income Tax Act, 1961, the finding of the Tribunal that the legal heir is fully responsible for the default committed by the deceased was patently on reasonable and/or sustainable in law? (2) Whether, on the facts and in the circumstances of the case, the order of remand by the Tribunal was legal and valid? (3) Whether, on the facts and in the circumstances…

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