BALLAGERE RANGEGOWDA SHARADA LEGAL HEIR OF LATE DEBBUR SIDDAIAH DEVARAJ,BENGALURU V. INCOME TAX OFFICER, WARD-6(3)(1), BENGALURU

ITA 1957/BANG/2025

AI Insights

The case involves an appeal by the legal heir of the late Debbur Siddaiah Devaraj against the orders of the Income Tax Officer and the Commissioner of Income-tax (Appeals). The primary contention was that the assessment was erroneously made in the name of the deceased without involving the legal heirs, despite the fact that the legal heir had provided necessary documentation and explanations regarding the sources of income. The Tribunal noted procedural lapses, including the failure to properly implead the legal heirs and the improper issuance of notices under section 148 of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791673 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 02-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE
• Assessee Lawyers: SHREERAKSHA D; STATING
• Keywords: Set aside; Difference of opinion; Change of opinion; Source of fund; Recovery proceedings
• Section: 147; 148; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 1957/Bang/2025 Assessment Year : 2017-18 Shri Ballagere Rangegowda Sharada, Legal heir of Late Debbur Siddaiah Devaraj, Muthyalanagara, Bengaluru – 560 054. PAN: HFIPS1293M Vs. The Income Tax Officer, Ward – 6(3)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Ms. Shreeraksha D, CA Revenue by : Shri Ganesh R Ghale, Advocate, Standing Counsel for Revenue Date of Hearing : 03-12-2025 Date of Pronouncement : 09-12-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 15/01/2024 in respect of the A.Y. 2017-18 and raised the following grounds: “1. That the order of the learned Commissioner of Income- tax (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances of the case. 2. That the notice u/s 148 is bad in law as the same is issued by the Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO) and therefore, assessment order is also liable to be quashed. Printed from counselvise.com Page 2 of 5 ITA No. 1957/Bang/2025 3. That the learned assessing officer erred in law and on facts that the notice u/s 148 is bad in law. 4. That the learned assessing officer erred in law and on facts that the notice u/s. 148 is bad in law due to change of opinion. 5. That the learned assessing officer erred in law and on facts that the entire proceedings u/s 147 of the Act are bad in law and without jurisdiction. 6. That the learned assessing officer erred in law and on facts that the order u/s 147 of the Act is bad in law as the provisions of section 144B of the Act are not followed. 7. That the learned assessing officer erred in law and on facts that the order u/s. 147 is bad in law as the same is passed in the name of non-existent person. 8. That the learned assessing officer erred in law and on facts that the appellant had not filed the return of income in response to 148 notice. 9. That the learned assessing officer erred in law and on facts in making an addition of Rs. 43,50,000/- u/s 69A of the Act is bad in law as the appellant has proved the sources of income. 10. That the learned assessing officer erred in law and on facts in making an addition of Rs. 43,50,000/- u/s. 69A of the Act and bringing to tax u/s. 115BBE of the Act even though the appellant had explained the source of income. 11. Without prejudice to the above grounds, the application of amended provisions of section 115BBE of the Act is perverse as the same is applicable from AY 2018-19. Each of the above grounds is without prejudice to one another, the appellant seeks the leave of the Hon'ble Income Tax Appellate Tribunal, Bangalore to add, delete, amend or modify otherwise each or any of the grounds of appeal either before or at the time of hearing this appeal.” 2. The brief facts of the case are that the assessee is an individual and filed his return of income on 04/08/2017. Thereafter the case was reopened by issuing notice u/s. 148 on 29/03/2021. The assessee had not responded to the said notice and therefore notice u/s. 142(1) was issued. Printed from counselvise.com Page 3 of 5 ITA No. 1957/Bang/2025 During the assessment proceedings, the representative of the assessee submitted that the assessee Shri Debbur Siddaiah Devaraj was expired on 20/08/2021. Thereafter the AO transferred the assessment from faceless to the JAO to bring the legal heirs on record and complete the assessment. The JAO had made the assessment by treating the cash deposit of Rs. 43,50,000/- which was received by the deceased assessee while effecting the sale of a property by his wife. The assessee had submitted the return of income as well as the other records to show that the amount has been received by way of sale of the property by his wife. In spite of that, the AO had made the assessment in the name of the deceased assessee by stating that the source of cash deposits not explained. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and the Ld.CIT(A) had dismissed the appeal on the ground that the assessee had not submitted any documents in support of his claim after observing that the assessee was expired on 20/08/2021. The legal heir of the deceased assessee filed the present appeal before this Tribunal with a delay of 520 days. The L/R of the deceased assessee also filed an application to condone the said delay and gave a reason that the hearing notices were sent to the Chartered Accountant who was handling the assessee’s case. The L/R also submitted that Chartered Accountant also passed away in the month of January, 2024 and therefore she has no knowledge about the appeal proceedings and only when the AO had initiated recovery proceedings, the L/R of the assessee came to know about the order as well as the death of the said Chartered Accountant and thereafter the appeal was made ready and filed on 02/09/2025 with a delay of 520 days. 3. We have considered the reasons stated in the delay condonation petition and we are satisfied that the L/R of the assessee was prevented from filing the appeal in time and therefore we are condoning the said delay in filing the appeal and proceeded to decide the appeal on merits. 4. At the time of hearing, the Ld.AR brought to our notice that the death of the assessee was informed to the department after the notice u/s. 148 Printed from counselvise.com Page 4 of 5 ITA No. 1957/Bang/2025 was issued and also the copy of the death certificate was given to the AO and in spite of that, the AO had made the assessment ex-parte on the deceased person which is an illegal one. The Ld.AR further submitted that the L/R of the assessee had properly explained the sources for the cash deposits but without considering the said submissions as well as the documents, the AO had made the best judgment assessment u/s. 147 r.w.s. 144 of the Act. The Ld.AR strongly opposed the assessment order on the ground that the same was made in the name of the deceased assessee without including the legal heirs of the deceased assessee and therefore the assessment order is void-authorities below-initio and prayed to allow the appeal. 5. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal. 6. We have heard the arguments of both sides and perused the materials available on record. 7. We have perused the assessment order and in the said assessment order, we find that the representative of the deceased assessee had informed to the AO about the death of the assessee. The AO had also accepted that the representative had informed the said fact and also observed that the assessee was transferred to the JAO for the purpose of impleading the legal heirs of the deceased assessee and thereafter proceeded to make the assessment. Therefore there is no dispute about the fact that the assessee died as early as 20/08/2021 i.e. before the date of issuance of notice u/s. 148 of the Act. When the said fact was known to the AO, they could have impleaded the legal heirs of the deceased assessee and thereafter proceeded with the assessment on the said legal heirs of the deceased assessee. Instead of doing that, the AO had made the assessment in the name of the deceased assessee which could not be taken as a valid order in the eye of law. Printed from counselvise.com Page 5 of 5 ITA No. 1957/Bang/2025 8. Even though the Ld.CIT(A) had observed that the assessee died on 20/08/2021 but without deciding about the validity of the assessment order had dismissed the said appeal for the reason that the assessee had not appeared to the various hearing notices issued by him. Having observed that the assessee was died on 20/08/2021 and the said fact was also accepted by the AO in his order, then the Ld.CIT(A) could have allowed the appeal on the sole ground that the assessment could not be made on the deceased person where the assessee had appeared before him or not. 9. We therefore of the view that the order of the AO is an illegal one and also ab-initio-void and therefore we are allowing the appeal filed by the legal heir of the deceased assessee by setting aside the order of the AO dated 26/03/2022 and consequently, set aside the order of the Ld.CIT(A) also. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 09th December, 2025. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 09th December, 2025. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "