INCOME TAX OFFICER, WARD-29(1), KOLKATA, KOLKATA V. PUSPA KOTHARI, L/H OF SUNDER LAL KOTHARI, KOLKATA

ITA 258/KOL/2025

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-29(1), Kolkata against the order of the National Faceless Appeal Centre which had allowed the appeal of the assessee, Puspa Kothari, deleting additions made under sections 68 and 69C of the Income Tax Act. The revenue's appeal was based on the grounds that the CIT(A) had erred in law by deleting these additions, which were initially made by the Assessing Officer. However, the primary legal issue arose from the fact that the assessment was conducted in the name of Sunder Lal Kothari, who had passed away before the assessment was completed. The tribunal dismissed the revenue's appeal, citing that the entire assessment proceedings were void as they were conducted against a deceased person.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789711 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 03-02-2025
• Other Referred Cases: Sumitra Devi Agarwal (Legal Heir of Late Gokul Chand Agarwal) vs. ITO, Shilpa Agarwal vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries; Earning of tax free income; Bogus
• Section: 147; 143(3); 69C

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Before Shri Pradip Kumar Choubey, Judicial Member And Shri Sanjay Awasthi, Accountant Member ITA No.258/Kol/2025 Assessment Year: 2013-14 ITO, Ward-29(1), Kolkata ..……………………………………….……….……Appellant vs. Puspa Kothari, L/H of Sunder Lal Kothari ……………………….…..…..…..Respondent 2, Gariahat Road (South), Kol-700068. [PAN: ASHPK4383K] Appearances by: Shri Avra Mazumder & Giridhar Dhelia, Advocate, appeared on behalf of the appellant. Shri Susanta Saha, Addl. CIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 25, 2025 Date of pronouncing the order : November 25, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member: The captioned appeal has been preferred by the revenue for the assessment year 2013-14 against the order dated 02.09.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The appeal has been filed by the revenue with a delay of 65 days. The revenue has filed a petition for condonation of the delay. After considering the reasons cited in the petition for condonation of delay, we find that the reasons are valid and consequently, the delay in filing the appeal is hereby condoned and we proceed to dispose of the appeal on merits. Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 2 3. Brief facts of the case are that the assessee filed its return income for A.Y. 2013-14 and claimed long term capital gain Rs.11,87,710/- as exempt income under Section 10(38) of the Act. During the assessment proceedings, the son of Sunder Lal Kothari i.e., Jagmohan Kothari submitted an affidavit stating that his father died on 11.05.2021 leaving behind his mother, Smt. Pushpa Kothari and his sister, Smt. Rasmi Mundra as his legal heirs/representatives. The Assessing Officer completed the assessment under section 143(3) read with section 147 of the Act by making additions of Rs.12,64,110/- u/s 68 and Rs.37,935/- u/s 69C of the Act by passing order dated 29.09.2021. 4. Aggrieved by the above order, the assessee filed an appeal before the CIT(A) wherein the appeal of the assessee was allowed by deleting the above additions made by the Assessing Officer. 5. Being dissatisfied, the revenue has preferred the present appeal raising the following grounds of appeal: “1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in deleting the addition of Rs. 12,64,110/- made u/s 68 of the Income-tax Act by the Assessing Officer. 2. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in deleting the addition of Rs. 12,64,110/- arbitrarily ignoring the statements of bogus entry provider admitting providing accommodation entries in lieu of Commission. 3. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in deleting the addition of Rs.37,935/- made w/s 69C of the Income-tax Act by the Assessing Officer. 4. That the Ld. Commissioner of Income Tax (Appeals) has erred while arbitrarily ignoring the modus operandi deployed for providing accommodation entries as unearthed by the Department in this regard. 5. Under the facts & circumstances of the case, it may be considered that the case is covered by the exception clause of Para 3.1(h) of the CBDT Circular No.05/2024 dtd. 15.03.2024 6. The appellant craves the leave to make any addition, alternation and modification of ground or grounds during the course of hearing of the appeal.” Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 3 6. At the outset, the ld. AR of the assessee submits that the entire assessment proceedings are bad in law as the show-cause notice was issued on 23.07.2021 against a dead person and the order passed by the Assessing Officer was also against a dead person. The ld. AR further submits that the assessee namely Sunder Lal Kothari has already died on 11.05.2021 and on 07.09.2021 the legal heirs of the assessee submitted a request on the Income Tax Portal for registration as representative assessees and thereafter, the show cause notice dated 23.09.2021 was issued in the name of the deceased, Sunder Lal Kothari despite the department having knowledge and being intimated about the assessee’s death. His submission is that the said assessment order was passed in the name of the deceased assessee which renders the entire proceedings as void ab initio and he relied on the decision of the Coordinate Bench in the case of Sumitra Devi Agarwal (Legal Heir of Late Gokul Chand Agarwal) vs. ITO in ITA No.395/Kol/2025 dated 03.07.2025. 7. Upon hearing the submissions of the counsels of the respective parties and perusing the materials available on record, we find that there is no dispute that the assessee i.e. Sunder Lal Kothari has already died on 11.05.2021 and the son of Sunder Lal Kothari i.e., Jagmohan Kothari submitted an affidavit stating that his father died on 11.05.2021 leaving behind his mother, Smt. Pushpa Kothari and his sister, Smt. Rasmi Mundra as his legal heirs/representatives, the copy of the said affidavit reads as under: Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 4 Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 5 Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 6 7.1 We further find that on 07.09.2021, the legal heirs of the assessee made a request on the Income Tax Portal for registration as representative assessees, the copy of the same reads as under: Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 7 7.2 We further find that the department, in spite of having knowledge of the assessee’s death, issued show cause notice on 23.09.2021 in the name of the dead person i.e Sunder Lal Kothari and the assessment in the case of the assessee was completed on 29.09.2021 in the name of the deceased person. We have gone through the order passed by the Coordinate Kolkata Bench of this Tribunal in case of Sumitra Devi Agarwal (Legal Heir of Late Gokul Chand Agarwal) vs. ITO stated supra and find that in this case, the Tribunal while relying on the decision of the Hon’ble Calcutta High Court in the case of Shilpa Agarwal vs. ITO in WPA No. 9183 of 2024 dated 10.04.2024 held that assessment proceedings in the name of a deceased person are void ab initio, especially when the Department was intimated about assessee's death, and all consequential proceedings flowing from such assessment cannot sustain and the relevant portion of the order is reproduced hereinbelow: “7.2. We have carefully considered the averments of Ld. AR/DR and we have also gone through the facts of the case. It is clear that the Ld. AO was duly informed about the passing away of the assessee through letter received in his office on 20.11.2018 (supra). We have also perused the case of Shilpa Agarwal (supra) which is squarely on the facts of this case. The text of this judgment deserves to be extracted: “Heard learned advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned assessment order dated 26th February, 2024, under Section 147 read with Section 144/B of the Income Tax Act, 1961, relating to the assessment year 2016-17, on the ground that the impugned assessment order has been passed against one Satish Agarwal, who died on 3rd November, 2014 and whose death was officially intimated to the department by letter dated 8th June, 2018 by annexing the death certificate as appears at page 31 and 32 of the writ petition. Learned advocate representing the respondent is not in a position to defend the impugned assessment order which has been passed against a dead person in view the facts which appears from record itself. Considering the facts and circumstances of the case and submission of the parties, the impugned assessment order dated 26th February, 2024, is quashed. However, dismissal of this writ petition will not be a bar on the part of the respondent Assessing Officer to initiate any fresh assessment proceeding in future in accordance with law. Accordingly, this writ petition being WPA 9183 of 2024 is disposed of.” Printed from counselvise.com ITA No.258/Kol/2025 Puspa Kothari, L/H of Sunder Lal Kothari 8 Considering that an assessment cannot be passed on a deceased person, especially when the fact of passing away of the assessee was duly brought to the notice of the Ld. AO, the assessment order itself would become void and hence it deserves to be quashed.” 7.3 Keeping in view the above facts as well as considering the judicial precedents, we do not have any hesitation to hold that assessment order dated 29.09.2021 is bad in law and all other consequent proceedings initiated become null and void. 8. In the result, the appeal of the revenue is dismissed. Kolkata, the 25th November, 2025. Sd/- Sd/- [Sanjay Awasthi] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 25.11.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "