Father Of Deceased Taxpayer Can Be Treated As Legal Representative Despite Not Being Legal Heir: Delhi HC

The Delhi High Court has held that the father of a deceased assessee can be treated as a “legal representative” under the Income Tax Act even if he is not a Class-I heir under the Hindu Succession Act.

A Division Bench of Justices Dinesh Mehta and Amit Mahajan observed,

“A person need not be a legal heir, much less a Class I heir under the Hindu Succession Act to fall within this definition. The test is not one of inheritance; it is one of representation vis-à-vis the estate of the deceased.”

The Court made the observation while dealing with a challenge to reassessment proceedings initiated against a deceased assessee under Sections 148 and 148A(d) of the Income Tax Act, 1961.

The petitioner had challenged the reassessment proceedings on two grounds — first, that the notice was issued against a dead person, and second, that the approval for reopening was granted by the wrong authority.

Revenue argued that father of the deceased assessee had himself responded to the notice in the capacity of a “legal representative” and therefore could not later challenge the validity of service.

Accepting this contention, the Court clarified that the expressions “legal heir” and “legal representative” are legally distinct concepts operating in different statutory domains.

The Bench observed that Section 159 of the Income Tax Act uses the expression “legal representative” and not “legal heir.”

“If the petitioner‟s argument were that he, being the father of the deceased-assessee, cannot be said to be a Legal Heir, the same would have been correct, as per the provisions and schedule of Hindu Succession Act, 1956, which clearly provide that the father of the deceased appears only as entry 1 in Class II of the Schedule, and is entitled to a share in the estate only in the absence of Class 1 heirs. The petitioner‟s plea is premised on conflation of two legally distinct expressions: „legal heir‟ and „legal representative‟. These two terms operate in entirely different statutory domains and do not bear the same meaning.”

It further noted that Section 2(29) of the Act adopts the definition of “legal representative” from Section 2(11) of the Code of Civil Procedure, which has a much wider scope.

Quoting the CPC definition, the Court explained that a “legal representative” includes not only a person who inherits the estate, but also anyone who represents or intermeddles with the estate of the deceased.

The Court said,

“The definition is both inclusive and wide. It is not confined to persons who inherit the estate of the deceased. It embraces three distinct categories: first, a person who in law represents the estate of the deceased; second, any person who intermeddles with the estate of the deceased; and third, the person on whom the estate devolves on the death of the party.”

The Bench further observed that the father had, “by his conduct,” assumed the role of legal representative by filing replies before the tax authorities in that capacity. Accordingly, it rejected the challenge to the service of notice.

However, it ultimately quashed the reassessment proceedings on the ground that the Revenue had invoked the extended limitation period without approval from the Principal Chief Commissioner of Income Tax under Section 151(ii) of the Act.

For Petitioner: Advocates Pankaj Kumar Saxena, Keshav Dwivedi, Divyanshee Singh and Ashish Kumar Sing

For Respondent: Shlok Chandra, Sr. Std.with Naincy Jain, Madhavi Shukla, Jr. SCs and Advocates Udit Dad