ANGURI DEVI KHANDELWAL (RADHA MOHAN KHANDELWAL (LEGAL HEIR),JAIPUR V. DCIT CIRCLE-4, JAIPUR, JAIPUR

ITA 391/JPR/2025

AI Insights

The case revolves around an appeal by Radha Mohan Khandelwal, the legal heir of the late Smt. Anguri Devi Khandelwal, against the assessment order passed by the DCIT Circle-4, Jaipur, and upheld by the CIT(A), NFAC. The original assessment order, dated 28.09.2021, made significant additions to the income of the deceased, citing low gross profit and unexplained cash credits under sections 68 and 115BBE of the Income Tax Act. The primary contention was that the assessment was erroneously made in the name of a deceased person, despite the Assessing Officer being informed of her death during the proceedings. The Tribunal found that the assessment order was issued without proper legal basis, as the deceased could not be assessed posthumously, leading to the setting aside of the order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780290 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 11-03-2025
• Other Referred Cases: PCIT vs. Maruti Suzuki India Ltd., Spice Entertainment Ltd. Vs. Commissioner of Service Tax, Late Sh. Birdi Chand vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM; GAURAV AWASTHI
• Assessee Lawyers: ROHAN SOGANI
• Keywords: Set aside; Gross profit estimation; Scheme of amalgamation; Procedural lapse
• Section: 143(3); 142(1); 68

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘’B-Bench” JAIPUR Jh xxu Xkks;y] ys[kk lnL; ,oa Jh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM vk;dj vihyla-@ITA No. 391 /JPR/2025 fu/kZkj.ko\"kZ@AssessmentYear : 2018-19 Anguri Devi Khandelwal through Radha Mohan Khandelwal (legal heir) 674, Khandaka Mansion, Bordi Ka Rasta, Kishanpole Bazar, Jaipur. cuke Vs. The DCIT Circle-4 Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIHPK4203A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Rohan Sogani, C.A. jktLo dh vksjls@Revenue by: Mrs. Alka Gautam, CIT & Shri Gaurav Awasthi, JCIT lquokbZ dh rkjh[k@Date of Hearing : 06 109/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 06/10/2025 PER: NARINDER KUMAR, JUDICIAL MEMBER Appellant claims himself to be the legal heir of Smt. Anguri Devi Khandelwal since deceased (assessee). He is feeling aggrieved by order dated 15.01.2025, passed by Learned CIT(A), National Faceless Appeal Centre, Delhi, relating to the assessment year 2018-19. Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 2 2. Vide impugned order, Learned CIT(A) dismissed the appeal filed against assessment order dated 28.09.2021, whereby two additions i.e. Rs. 5,46,15,000/- on account of low gross profit, and another addition of Rs. 4,17,80,000/-, u/s 68 r.w.s. 115BBE of the Act have been upheld. 3. The only contention raised by Ld. AR for the appellant before us is that this is a matter where the assessment order dated 28.09.2021, came to be passed against a dead person, namely, Smt. Anguri Devi Khandelwal, the original assessee. Ld. AR has submitted that Smt. Anguri Devi Khandelwal passed away on 10.03.2021 and this fact was brought to the notice to the Assessing Officer, while furnishing submissions on merits, along with copy of death certificate, but the Assessing Officer proceeded to pass the assessment order against Smt. Anguri Devi Khandealwal, and as such, the impugned order deserved to be set aside, being null and void. In support of the only ground i.e. ground No. 1 raised, ld. AR for the appellant has put forth following written submissions:- “GROUND NO 1 ASSESSMENT ORDER PASSED IN THE NAME OF A DEAD PERSON IS A NULLITY 1. ASSESSING OFFICER AND NATIONAL FACELESS APPEAL CENTRE Ld. AO passed the assessment order under Section 143(3) of the Act on 28.09.2021 in the name of the dead person i.e., Anguri Devi Khandelwal Ld. CIT(A)/NFAC dismissed the ground of the assessee. 2. SUBMISSIONS Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 3 2.1. During the pendency of the assessment proceedings, the assessee passed away on 10.03.2021. Copy of death certificate placed at PB 158. 2.2. In the reply to the show-cause notice dated 19.04.2021 [PB 140-157] the fact of the assessee's demise was clearly communicated to id. AO. 2.3. Despite being duly intimated of the assessee's death, Id. AO proceeded with the assessment by issuing further notices under Section 142(1) and finally passed the assessment order under Section 143(3) on 28.09.2021. all in the name of the dead person. This action renders the entire process a nullity [PB 93] 2.4. Detailed submissions were filed before Id. NFAC [PB 360-384] stating the fact that the assessment order was passed in the name of dead person. A screenshot of the said submission dated 19.04.2021 was placed before the Ld. CIT(A)/NFAC during the appellate proceedings. This screenshot was direct evidence that the assessing authority had been informed of the death. 2.5. Ld. CIT(A)/NFAC has erred in overlooking the said evidence and has incorrectly held that the communication was not proven since this was already on record. 2.6. Since the fact of death was duly intimated to Id. AO, the assessment order framed in the name of a dead person is a nullity in the eyes of the law. Therefore, the said assessment order is illegal and void-ab-initio, and deserves to be quashed on this ground alone. 2.7. Reliance is placed on the following judicial pronouncements: Hon'ble Supreme Court in the case of PCIT vs. Maruti Suzuki India Ltd. [2019] 107 taxmann.com 375 (SC) [CLC 1-15] Hon'ble Supreme Court affirmed the legal position that an assessment order passed in the name of a non-existent company is without jurisdiction and void ab initio. The Court held that framing an assessment against an entity that has ceased to exist is a \"substantive illegality\" and not a mere procedural violation that can be cured under the provisions of Section 292B of the Act. Despite the fact that the Assessing Officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Hon'ble Delhi High Court in the case of Spice Entertainment Ltd. Vs. Commissioner of Service Tax [ITA 475 and 476 of 2011] [CLC 16-21] The framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but al jurisdictional defect as there cannot be any assessment against a \"dead person. Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 4 Jurisdictional Hon'ble ITAT, Jaipur Bench in the case of Late Sh. Birdi Chand vs. ITO [ITA No.502/JPR/2023] [CLC 22-52] This decision by the Jurisdictional Tribunal is directly on point. The proceedings were validly initiated against the assessee when he was alive. However, the assessee expired during the proceedings, and his legal heir repeatedly informed the AO of this fact. Despite these intimations, the AO issued further notices under Section 142(1) and passed the final assessment order in the name of the deceased. The Hon'ble Tribunal held that framing the assessment and raising a demand on a dead person, after the AO has knowledge of the death, is not legal and must be quashed. It was held that this is a jurisdictional defect and not a mere technicality curable under Section 292B . In view of above assessment order passed in the name of dead person is a nullity and therefore entire proceedings deserves to be quashed.” 4. A perusal of the submissions available at page 157 of the paper book dated 12.09.2025, would reveal that same were submitted to the Assessing Officer- National e-assessment Centre. Therein, it was also submitted that Smt. Anguri Devi Khandelwal had died on 10.03.2021. This fact was brought to the notice of National e- assessment Centre on 19.04.2021. Copy of death certificate of Smt. Anguri Devi Khandelwal is available at page 158 of the paper book. Name of Radha Mohan Khandelwal as legal heir of Smt. Anguri Devi Khandelwal also finds mentioned in copy of power attorney submitted before National e-assessment Centre, ( page 159 of the paper book). 5. Once the factum of death of Smt. Anguri Devi Khandelwal was brought to the notice of the Assessing Officer-National e-assessment Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 5 Centre, it was the duty of the Assessing Officer to take steps to find out as to who were to be allowed to be brought on record as legal heirs of Smt. Anguri Devi Khandelwal-the assessee. However, from the assessment order, it appears that no attention was paid to the said fact of departure of the Smt. Anguri Devi Khandelwal. Rather, on 28.09.2021, the assessment order came to be passed, making the two additions shown therein. 6. In the given situation, even when the appellate proceedings were going on before Learned CIT(A), NFAC, the factum of departure of Smt. Anguri Devi Khandelwal should have been considered from the point of bringing on record legal heirs, but, it appears that Learned CIT(A) rejected the contention raised on behalf of the appellant that the assessment order was null and void, same having been passed against a dead person. Learned CIT(A) dealing with ground No. 1 raised therein, observed as under:- “ Decision: Ground No. 1 In the first ground the appellant has taken the plea that the AO has passed order on a dead person which is void ab initio. Appellant has contented that the AO was informed of the death of the the assessee in course of assessment proceedings, however, the AO chose to ignore the same and went ahead and passed the order in the name of Late Smt Anguri Devi Khandelwal. As evidence, the appellant has enclosed a screenshot wherein it is written that Sri Anguri Devi Agarwal died on 10.3.21 and that her death certificate is enclosed. Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 6 I have gone through the submission of the appellant and the evidence enclosed. This screenshot is a part of the submissions of the appellant which have been reproduced above in this order. On going through the screenshot, I find that it is just a sentence with no evidence that the same was given to the AO. Further, the appellant has not filed any copy of the submission that was given to the AO. Rather, the appellant has simply filed a copy of the Death certificate, and a screenshot of two lines. While it does prove that the assessee passed away on 10.03.2021, it nowhere proves that this information was given to the AO. In the absence of any concrete evidence that the fact of the death of the assessee was communicated to the AO, I do not find any merit in the contention of the appellant. Hence this ground of the assessee is dismissed. Ground No 1 is dismissed.” 7. Ld. DR for the department has not disputed that factum of death of Smt Anguri Devi Khandelwal, was brought to the notice of the Assessing Officer- National e-assessment Centre, during pendency of the assessment proceedings. Once the factum of death of the assessee was brought to the notice of the department, it was for the department to take appropriate steps after enquiry, in connection with bringing on record legal heirs of the assessee. However, the Assessing Officer proceeded to pass the assessment order, without following due process of law. 8. Having regard to the settled legal proposition on this point, we hold that the assessment order passed against Smt. Anguri Devi Khandelwal (since deceased) is null and void. Consequently the impugned order passed by learned CIT(A), NFAC deserves to be set aside. Printed from counselvise.com ITA No. 391/JPR/2025 Anguri Devi Khandelwar, L/H Radha Mohan Khandelwal, Jaipur 7 Result 9. In view of the above findings, this appeal is allowed and the impugned assessment order, and the impugned order passed by Learned CIT(A)-NFAC are hereby set aside. File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 06/10/2025. Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 06 /10/2025 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Anguri Devi Khandelwal, L/H Radha Mohan Khandelwal, Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Circle-4, Jaipur. 3. vk;djvk;qDr@ Theld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 391/JPR/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar Printed from counselvise.com "