Sh Hari Om Gupta V. Commissioner Of Income Tax, Alawar and The Income Tax Officer, Ward (3), Bharatpur

CW/19926/2019

AI Insights

The case involves a dispute over the remaining balance of an income tax refund due to the petitioner, Sh. Hari Om Gupta, related to assessments of the late Sh. Murari Lal Gupta. The petitioner received partial refunds over the years but claimed a balance amount was still outstanding. The respondents adjusted some amounts against demands from assessments made on the late Sh. Murari Lal Gupta, both as an individual and as part of an Association of Persons (AOP). The legal contention centered on whether these adjustments were valid under Section 159 of the Income Tax Act, which holds legal representatives liable for the deceased's tax liabilities. The court's decision hinged on verifying the existence and details of any such demands against the late Sh. Murari Lal Gupta.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 796676 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 09-10-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI; ANUSHKA JAIN
• Assessee Lawyers: P K KASLIWAL
• Keywords: Income Tax Refund; Legal Representative Liability; Assessment Adjustment
• Section: 158BC; 158BD; 159

Judgement Text

"[2023:RJ-JP:27913-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 19926/2019 Sh Hari Om Gupta S/o Shri Murari Lal, Aged About 70 Years, Kumher, Bharatpur. ----Petitioner Versus 1. Commissioner Of Income Tax, Alawar 2. The Income Tax Officer, Ward (3), Bharatpur. ----Respondents For Petitioner(s) : Mr. PK Kasliwal For Respondent(s) : Mr. Anuroop Singhi with Ms. Anushka Jain HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Order 09/10/2023 Heard. The issue is only with regard to payment of balance amount of refund payable to the petitioner. Learned counsel for the petitioner referring to various averments made in the petition, orders passed by various authorities and also averments in the rejoinder would submit that out of total refund amount of Rs.17,64,487/- payable to him under various orders upon final adjudication between the parties, he has been paid Rs.3,85,770/- on 13.04.2011, Rs.4,82,910/- on 14.06.2013 and a further amount of Rs.2,41,157/- on 08.05.2023 thus total amount of refund which he has received is Rs.11,09,837/-. According to the petitioner, balance amount of Rs.6,54,650/- is still outstanding. [2023:RJ-JP:27913-DB] (2 of 4) [CW-19926/2019] According to the learned counsel for the respondents, appropriate adjustment toward demand against Late Sh. Murari Lal Gupta, both in individual and AOP capacity has been done with prior intimation to the petitioner. The only issue of fact, which arises for consideration as to whether demand was issued in respect of an assessment made against Late Sh. Murari Lal Gupta in his capacity as individual and then as AOP. In reply to averment in the writ petition para (5 (ii) ) it has been stated that after carrying out the assessment in respect of Sh. Murari Lal Gupta under Section 158BD (158BC r.w.s. 158BD) in respect of the period 01.04.1986 to 12.09.1995 in the status of individual and then for period 13.09.1995 to 25.02.1997 in the status of AOP, demands were created. In the rejoinder there is no specific denial to this fact. The stand taken by respondent is based on the provision contained Section 159 of the IT Act. Section 159 of the IT Act reads as under: “159. Legal representatives.—(1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),— (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at [2023:RJ-JP:27913-DB] (3 of 4) [CW-19926/2019] which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section 161, section 162, and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of subsection (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.” Obviously, if a demand has already been created after a completed assessment, the department is entitled to carry out necessary adjustments in view of provision contained Section 159 of the IT Act. In view of the aforesaid legal position, the factual aspects of the matter need to be verified by the respondent authority. As the date on which the demand was created as alleged in the pare 5.2 of the reply, is not placed on record, the respondent authority shall verify whether a demand was created against Sh. Murari Lal [2023:RJ-JP:27913-DB] (4 of 4) [CW-19926/2019] Gupta. If there was no demand created against Sh. Murari Lal Gupta, the provisions contained Section 159 of IT Act would not be taken recourse to with the result that the balance amount of refund as stated by the petitioner in his rejoinder, i.e. Rs.6,54,650/- shall be liable to be paid to the petitioner along with interest as payable under the law. The aforesaid exercise is required to be completed by the respondent No.2 within a period of 45 days from the date of receipt of copy of this order and the necessary order is required to be passed forthwith. In case grievance is not redressed, it will be open for the petitioner to take appropriate remedy available under the law. The writ petition is disposed of. (PRAVEER BHATNAGAR),J (MANINDRA MOHAN SHRIVASTAVA),J 108- Mohit Kumar "