Veena Vij, New Delhi V. ITO, New Delhi

ITA 1299/DEL/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8820 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 08-12-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Principle of natural justice; Period of limitation; Difference of opinion; Time period of passing order; Reassessment proceedings
• Section: 147; 148; 139

Judgement Text

ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH HNEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO. 1299/DEL/2012 ASSTT.YEAR: 2002-03 MRS. VEENA VIJ, VS INCOME TAX OFFICER, C/O S.C. JAIN, WARD-25(1), 5A/12, ANSARI ROAD, NEW DELHI. DARYAGANJ, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI TANEJA, ADV. RESPONDENT BY: SHRI J.P. CHANDRAKAR, S R. DR O R D E R PER C.M. GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY MRS. VEENA VIJ, W/O DECEASED ASSESSEE SHRI ASHOK KUMAR VIJ AGAINST THE ORDER OF THE CIT(A )- XXIV, NEW DELHI DATED 21.12.2011 IN APPEAL NO.208/09-10 FOR AY 2002-03. 2. THE APPELLANT HAS RAISED FOLLOWING GROUNDS IN TH IS APPEAL:- 1. THAT ORDER OF AUTHORITIES BELOW IS AGAINST LAW & FACTS OF THE CASE. 2. THAT ASSESSMENT PROCEEDINGS INITIATED ON THE BAS IS OF NOTICE U/S 147 IN THE NAME OF DECEASED ASHOK KUMAR VIJ AND WITHOUT ISSUING ANY NOTICE U/S 147 ON THE LEGAL HEI R SMT. VEENA VIJ WERE BAD IN LAW AND VOID-AB-INITIO AND ASSESSME NT FRAMED ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 2 ON SUCH PROCEEDING IS INVALID AND VOID-AB-INITIO, A ND IS THEREFORE LIABLE TO BE QUASHED. 3. THAT CIT (A) HAS ERRED IN NOT APPRECIATING THAT NO NOTICE U/S 147 COULD HAVE BEEN VALID & LEGALLY ISSUE IN TH E NAME OF THE DECEASED PERSON AND ASSESSMENT PROCEEDING INITI ATED WITH SUCH NOTICE WERE VOID-AB-INITIO AND ASSESSMENT RES ULTANT FROM SUCH PROCEEDING IS ALSO VOID-AB-INITIO AND IS LIABL E TO BE QUASHED. 4. THAT ASSESSMENT ORDER LIE HELD AS VOID-AB-INITIO AND BE QUASHED. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND C AREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD, INTER ALIA BRIE F SYNOPSIS/WRITTEN ARGUMENTS SUBMITTED BY THE ASSESSEE, ASSESSMENT ORDER, IMPUGN ED ORDER AND LEGAL PROPOSITIONS AND CITATIONS RELIED BY BOTH THE PARTI ES. 4. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE O RIGINAL RETURN WAS FILED ON 09.09.2002 DECLARING AN INCOME OF RS.53,542 BY SHRI ASHOK KUMAR VIJ AS AN INDIVIDUAL WHO DIED ON 11.2.2006 AS PER DEATH CERTI FICATE AVAILABLE ON PAGE 3 OF THE PAPER BOOK. LD. COUNSEL FURTHER SUBMITTED THAT INCOME TAX RETURN FOR AY 2006-07 WAS FILED ON 3.10.2006 THROUGH LEGAL HEIR S MT. VEENA VIJ, APPELLANT OF THIS APPEAL AND THE FACT WAS ACKNOWLEDGED TO THE AO THAT SHRI ASHOK VIJ HAD DIED MUCH BEFORE THE DATE OF ISSUE OF NOTICE U/S 14 8 OF THE ACT. LD. COUNSEL FURTHER CONTENDED THAT NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 DATED 24.3.2009 WAS ISSUED IN THE NAME OF DECEASED ASSESS EE SHRI ASHOK KUMAR VIJ AND IN RESPONSE TO THE SAID NOTICE, REPLY DATED 14. 5.2009 WAS FILED UNDER THE SIGNATURES OF SHRI S.C. JAIN, CA INFORMING THAT SHR I ASHOK KUMAR VIJ THE ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 3 ASSESSEE HAD DIED ON 11.2.2006 AND ORIGINAL RETURN FILED BY THE ASSESSEE U/S 139 OF THE ACT MAY BE TREATED AS THE RETURN FILED IN RE SPONSE TO THE NOTICE U/S 148 OF THE ACT. LD. COUNSEL OF THE ASSESSEE PLACING RELIA NCE ON THE DECISION OF THIRD MEMBER BENCH OF ITAT AGRA IN THE CASE OF ITO VS SIK ANDER LAL JAIN DATED 8.12.2010 SUBMITTED THAT THE ASSESSMENT FRAMED IS B AD IN LAW AND VOID AB INITIO INASMUCH AS THE NOTICE U/S 148 OF THE ACT DATED 24. 03.2009 WAS ISSUED IN THE NAME OF SHRI ASHOK KUMAR VIJ WHO HAD DIED ON 11.2.2 006 AND NO NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED IN THE NAME OF DECEA SED ASSESSEES WIFE AND APPELLANT SMT. VEENA VIJ, THE LEGAL HEIR OF THE DEC EASED ASSESSEE. LD. COUNSEL VEHEMENTLY CONTENDED THAT AS THE NOTICE U/S 148 OF THE ACT ITSELF WAS NOT VALID, HENCE, THE ORDER PASSED IN PURSUANCE OF THE SAID NO TICE WAS ALSO INVALID AND DESERVES TO BE QUASHED. 5. LD. COUNSEL FURTHER CONTENDED THAT THE NOTICE U/ S 148 OF THE ACT HAS TO BE ISSUED ON THE ASSESSEE I.E. INDIVIDUAL ASSESSEE AND NOT ON A PERSON WHO HAS ALREADY EXPIRED ON THE DATE OF ISSUANCE OF NOTICE A ND IN THIS SITUATION ONLY THE LEGAL HEIR CAN BE REGARDED TO BE THE INDIVIDUAL. L D. COUNSEL HAS FURTHER DRAWN OUR ATTENTION TOWARDS DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF BRAHAM PRAKASH VS ITO 275 ITR 242(DE L) AND DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SURESH CHANDRA JAISWAL 325 ITR 563 (ALL). ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 4 6. REPLYING TO THE ABOVE, LD. DR FAIRLY ACCEPTED TH AT THE ASSESSEE SHRI ASHOK KUMAR VIJ HAD DIED ON 11.2.2006 AND NOTICE U/ S 148 OF THE ACT DATED 24.03.2009 WAS ISSUED IN THE NAME OF DECEASED ASSES SEE SHRI ASHOK KUMAR VIJ. LD. DR SUPPORTING THE IMPUGNED ORDER SUBMITTED THAT THE BENEFIT OF THE RATIO OF THE DECISIONS RELIED BY THE APPELLANT IS NOT AVAILA BLE FOR THE ASSESSEE. 7. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS OF BOTH THE PARTIES, WE NOTE THAT HONBLE JURISDICTIONAL HIGH COURT OF DELH I IN THE CASE OF BRAHAM PRAKASH VS ITO (SUPRA) HAS HELD THAT IF NOTICE U/S 148 OF THE ACT IS NOT SERVED ON THE ORIGINAL ASSESSEE OR DEEMED ASSESSEE, THEN SUBS EQUENT PROCEEDINGS AGAINST THE DEEMED ASSESSEE WERE BAD IN LAW AS THERE WAS BR EACH OF PRINCIPLES OF NATURAL JUSTICE AS WELL AS MANDATORY PROVISIONS OF SECTION 148 OF THE ACT. IN THE CASE OF CIT VS SURESH CHAND JAISWAL (SUPRA), SPEAKING FOR T HE ALLAHABAD HIGH COURT, THEIR LORDSHIPS HELD THAT IN CASE OF NOTICE SERVED IN THE NAME OF DEAD PERSONS AND NOTICE NOT SERVED ON THE LEGAL REPRESENTATIVE, THEN NOTICE U/S 148 OF THE ACT IS NOT VALID. 8. WE FURTHER FIND IT APPROPRIATE TO CONSIDER THE D ECISION OF THIRD MEMBER BENCH OF ITAT IN THE CASE OF ITO VS SIKANDAR LAL JA IN (SUPRA) DATED 8.12.2010 WHEREIN CONCURRING WITH THE DECISION OF LEARNED JUD ICIAL MEMBER, ON INVALIDITY OF NOTICE HAVING BEEN ISSUED ON THE DEAD PERSON, IT WAS HELD THAT THE NOTICE U/S 148 OF THE ACT ISSUED TO THE DECEASED ASSESSEE IS V OID AB INITIO. THE RELEVANT OPERATIVE PARA AND CONCLUSION OF THIS ORDER READS A S UNDER:- ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 5 45. IN VIEW OF MY AFORESAID DISCUSSION AND THE FAC T THAT THE NOTICE ISSUED IN THE NAME OF THE DEAD PERSON IS INVALID, I DECIDE THE QUESTIONS REFERRED TO ME AS UNDER: (I) THE ASSESSMENT ORDER PASSED, IN VIEW OF THE ISS UE OF NOTICE ON THE DEAD PERSON, IS VOID AND THE CIT(APPEALS), I N MY OPINION, WAS CORRECT IN LAW AND IN FACTS HOLDING TH E ASSESSMENT ORDER AS VOID. (II) THE CIT(A), IN MY OPINION, WAS NOT CORRECT IN LAW IN CONCLUDING THAT THE NOTICE U/S. 148 HAS NOT BEEN SE RVED ON PROPER PERSON, AS SECTION 149 ONLY REQUIRES THE ISS UANCE OF THE NOTICE WITHIN THE LIMITATION PERIOD AND NOTICE CAN BE SERVED ON THE PROPER PERSONS SUBSEQUENTLY. 46. NOW, THE MATTER SHALL GO TO THE REGULAR BENCH. P.K. BANSAL, ACCOUNTANT MEMBER.- 1. THERE BEING DIFFERENCE OF OPINION BETWEEN BOTH T HE MEMBERS CONSTITUTING THE BENCH, THE MATTER WAS REFE RRED BY HON'BLE PRESIDENT UNDER SECTION 255(4) OF THE INCOM E-TAX ACT TO THE THIRD MEMBER FOR ADJUDICATION ON TWO QUESTIO NS. THE LEARNED JUDICIAL MEMBER HAD CONFIRMED THE ORDER OF CIT(A) QUASHING THE REASSESSMENT PROCEEDINGS BOTH ON THE B ASIS OF INVALIDITY OF NOTICE HAVING BEEN ISSUED ON THE DEAD PERSON AND THE SERVICE OF NOTICE ON LEGAL HEIR OF ASSESSEE BEY OND THE PERIOD OF LIMITATION, WHEREAS THE LEARNED ACCOUNTAN T MEMBER SET ASIDE THE ORDER OF ID. CIT(A) HOLDING THE REASS ESSMENT PROCEEDINGS AS VALID HAVING BEEN INITIATED AFTER IS SUING VALID NOTICE AND ITS PROPER SERVICE. THE THIRD MEMBER VID E HIS OPINION DATED 8-12-2010 CONCURRED WITH THE DECISION REACHED BY LEARNED JUDICIAL MEMBER ON INVALIDITY OF NOTICE HAVING BEEN ISSUED ON THE DEAD PERSON THEREBY RENDERING TH E REASSESSMENT PROCEEDINGS AS VOID AND AGREED WITH TH E LEARNED ACCOUNTANT MEMBER ON THE VALIDITY OF SERVICE OF NOT ICE HOLDING THAT THE NOTICE COULD BE VALIDLY SERVED BEYOND THE TIME-LIMIT PRESCRIBED UNDER SECTION 149 OF THE INCOME-TAX ACT. 2. THUS, ON THE BASIS OF MAJORITY OF OPINION, THE A PPEALS OF THE REVENUE ARE DISMISSED. 9. TURNING TO THE FACTUAL MATRIX OF THE PRESENT CAS E, WE ARE OF THE CONSIDERED VIEW THAT ADMITTEDLY SHRI ASHOK KUMAR VIJ DIED ON 1 1.2.2006 AND NOTICE U/S ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 6 148 OF THE ACT DATED 24.3.2009 PLACED ON PAGE NO. 4 OF THE PAPER BOOK CLEARLY REVEALS THAT THE SAME WAS ISSUED IN THE NAME OF SHR I ASHOK KUMAR VIJ AND WE ALSO NOTE THAT IN RESPONSE TO THIS NOTICE, SHRI S.C . JAIN CA OF THE DECEASED ASSESSEE FILED A REPLY DATED 14.5.2009 INFORMING TH AT THE ASSESSEE HAD DIED ON 11.2.2006. FROM PAPER BOOK PAGE 5 OF THE ASSESSEE, WE ALSO NOTE THAT INCOME TAX RETURN FOR AY 2006-07 WAS FILED ON 31.10.2006 T HROUGH LEGAL HEIR OF THE DECEASED ASSESSEE SMT. VEENA VIJ, APPELLANT OF THIS CASE. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE INCLINED TO HOLD THAT THE CASE IS SQUARELY COVERED IN FAVOUR OF THE APPELLANT BY T HE DECISION OF THIRD MEMBER ITAT AGRA BENCH IN THE CASE OF ITO VS SIKANDER LAL JAIN (SUPRA) AND WE HOLD THAT NOTICE U/S 148 OF THE ACT, ISSUED IN THE NAME OF DECEASED ASSESSEE WHO HAD DIED PRIOR TO THE ISSUANCE OF NOTICE AND THIS FACT WAS ALSO ACKNOWLEDGED TO THE AO BY WAY OF INCOME TAX RETURN FOR AY 2006-07 FILED ON 31.10.2006 THROUGH LEGAL HEIR/WIFE OF THE DECEASED ASSESSEE SMT. VEENA VIJ, WAS INVALID AND VOID AB INITIO AND ALL SUBSEQUENT PROCEEDINGS CONDUCTED IN PURSUANCE TO THE SAID NOTICE ARE ALSO INVALID. THEREFORE, IMPUGNED ORDER OF THE CIT(A) IS SET ASIDE AND WE HOLD THAT NOTICE U/S 148 OF THE ACT ISSUED I N THE NAME OF DECEASED ASSESSEE AND ALL SUBSEQUENT PROCEEDINGS THERETO ARE INVALID AND WE QUASH THE SAME. 10. IN THE RESULT, THE APPEAL OF THE APPELLANT SMT. VEENA VIJ IS HEREBY ALLOWED. ITA NO. 1299/D/2012 ASSTT.YEAR: 2002-03 7 ORDER PRONOUNCED IN THE OPEN COURT ON 09.02.2015. SD/- SD/- ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 9TH FEBRUARY 2015 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR