The Dy. CIT, Circle-1(2), Ahmedabad V. Legal Heirs of Kamlaben Shantilal Sancheti, Ahmedabad

ITA 1449/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9133 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 14-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAUMIL JAIN AR
• Keywords: Set aside
• Section: 143(3); 142(1)

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO.1449/AHD/2017 / ASSTT. YEAR: 2012-13 DCIT, CIR.1(2) AHMEDABAD. VS. LEGAL HEIRS OF KAMLABEN SHANTILAL SANCHETI 328, PANJRAPOLE, RELIEF ROAD KALUPUR AHMEDABAD. PAN : ALIPS 5966 P ( APPLICANT ) (RESPONDENT) REVENUE BY : SHRI VINOD TANWANI, SR.DR ASSESSEE BY : SHRI SAUMIL JAIN, AR ! '#$ % &' / DATE OF HEARING : 28/06/2019 ()* % &' / DATE OF PRONOUNCEMENT: 09/07/2019 ,- / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-10, AHMEDABAD DATED 29.3.2017 PASSED FOR THE ASSTT.YEAR 2012-13. 2. SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT (A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER ON THE GROUND THAT THIS ASSESSMENT ORDER HAS BEEN FRAMED ON THE DECEASED PE RSON. ITA NO.1447/AHD/2017 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HER RETURN OF INCOME DECLARING TOTAL INCOME AT RS.32,85 ,470/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTIC E UNDER SECTION 143(2) WAS ALLEGED TO HAVE BEEN ISSUED ON 6 .8.2013. THEREAFTER A QUESTIONNAIRE WAS ISSUED UNDER SECTION 142(1) ON 17.1.2014. DUE TO CHANGE OF AO A FRESH NOTICE UNDE R SECTION 143(2) WAS ISSUED ON 4.9.2014. THE CASE OF THE ASS ESSEE IS THAT THE ASSESSEE DIED ON 2.2.2015 AND THIS FACT WAS BRO UGHT TO THE NOTICE OF THE AO ON 27.2.2015. INSPITE OF THAT AO HAS PASSED AN ASSESSMENT ORDER IN THE NAME OF DECEASED PERSON WIT HOUT GIVING NOTICE TO THE LEGAL HEIRS UNDER SECTION 143(2) OF T HE INCOME TAX ACT. THE LD.CIT(A) ACCEPTED THIS CONTENTION OF TH E ASSESSEE AND HELD THAT THE ASSESSMENT ORDER IS INVALID. IT QUAS HED THE ASSESSMENT ORDER. THE FINDING RECORDED BY THE LD.C IT(A) READS AS UNDER: 13. ON GOING THROUGH FACTS OF THE CASE, THE LEGAL HEIR INFORMED THE AO ABOUT THE DEATH OF THE APPELLANT ON 27/02/2015 AND THE ORDER U/S 143(3) WAS PASSED BY T HE AO ON 05/03/2015. THEREFORE, THERE IS A GAP OF LESS TH AN 7 DAYS (FEBRUARY BEING A MONTH OF 28 DAYS IN 2015) BETWEEN THESE TWO EVENTS. IT IS NOT POSSIBLE IN SUCH A SHORT TIME TO DETERMINE THE LEGAL REPRESENTATIVE AND ALL FURTHER PROCEEDINGS ARE REQUIRED TO BE TAKEN AGAINST THE LE GAL REPRESENTATIVE ONLY. A NOTICE, IF ANY U/S 143(2) WI LL THEREFORE, HAVE TO BE SERVED ON SUCH LEGAL REPRESEN TATIVE. THE AO HAS NOT BROUGHT ANYTHING ON RECORD TO PROVE THAT THE PROCEEDINGS WERE INITIATED FOR DETERMINATION OF LEG AL REPRESENTATIVE AND WHETHER NOTICE U/S 143(2) WAS SE RVED ON SUCH LEGAL REPRESENTATIVE. IN FACT, LOOKING AT THE TIME GAP, IT IS NOT POSSIBLE TO DO SO. 14. THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF HON'BLE GUJARAT HIGH COURT AND HON'BLE ITAT AHMEDABAD BENCH, IT IS HELD THAT THE LEGAL REPRESENTATIVE IN THIS CASE HAS NOT BEEN ITA NO.1447/AHD/2017 3 IMPLEADED BEFORE PASSING THE ASSESSMENT ORDER. THER EFORE, THE ASSESSMENT ORDER HAS BEEN PASSED ON A DEAD PERS ON WHICH IS NOT VALID AND CANNOT BE SUSTAIN IN THE EYE S OF THE LAW. THEREFORE, THE GROUND NO. 2 TAKEN BY THE APPEL LANT IS ALLOWED AND IT IS HELD THAT THE ORDER PASSED BY THE AO IS NOT A VALID ORDER IN THE EYE OF THE LAW. SINCE THE APPE LLANT SUCCEEDS ON THIS GROUND, THE ALL OTHER GROUNDS TAKE N BY THE APPELLANT BECOME ACADEMIC AND THEREFORE, ARE NOT BE ING ADJUDICATED UPON SEPARATELY. 4. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT T HE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF HONBLE GUJARAT HIGH COURT N THE CASE O F CIT VS. SUMANTBHAI C. MUNSHAW (DECD), 128 ITR 0142. THE LD .DR RELIED UPON THE ORDER OF THE AO. 5. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. IT IS PERTINENT TO NOTE THAT JURISDICTION FOR SCRUTINIZING RETURN UNDER SECTION 139(1) IS BEING I NFUSED IN THE AO BY VIRTUE OF NOTICE ISSUED UNDER SECTION 143(2) WIT HIN TIME LIMIT PROVIDED IN THE PROVISO APPENDED TO SECTION 143(2). IT IS NOT DISPUTED BEFORE US THAT SUCH NOTICE WAS NOT ISSUED WITHIN TIME LIMIT AND NO OBJECTION QUA THAT ASPECT WAS RAISED BY THE ASSESSEE BEFORE THE LD.CIT(A). THE CASE OF THE ASSESSEE IS THAT ASSESSEE DIED ON 11.2.2015 AND INTIMATION TO THIS EFFECT WAS TRANSMITTED TO THE AO. LEGAL HEIRS OF THE ASSESSEE HAD ASKED THE AO TO GRANT SOME MORE TIME TO COMPLY AND FILE DETAILS AS REQUIR ED BY THE AO. THE LD.AO FAILED TO GIVE NOTICE TO THE L/R AND PASS ED THE IMPUGNED ORDER ON 5.3.2015. IT IS PERTINENT TO OBS ERVE THAT SECTION 159 OF THE ACT GOVERNS THIS SITUATION. FOR THE FACILITY OF REFERENCE, WE TAKE NOTE OF SECTION 159 WHICH READS AS UNDER: ITA NO.1447/AHD/2017 4 159. (1) WHERE A PERSON DIES, HIS LEGAL REPRESENTA TIVE SHALL BE LIABLE TO PAY ANY SUM WHICH THE DECEASED WOULD H AVE BEEN LIABLE TO PAY IF HE HAD NOT DIED, IN THE LIKE MANNER AND TO THE SAME EXTENT AS THE DECEASED. (2) FOR THE PURPOSE OF MAKING AN ASSESSMENT (INCLUD ING AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SEC TION 147) OF THE INCOME OF THE DECEASED AND FOR THE PURP OSE OF LEVYING ANY SUM IN THE HANDS OF THE LEGAL REPRESENT ATIVE IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (1), (A) ANY PROCEEDING TAKEN AGAINST THE DECEASED BEFO RE HIS DEATH SHALL BE DEEMED TO HAVE BEEN TAKEN AGAINST TH E LEGAL REPRESENTATIVE AND MAY BE CONTINUED AGAINST T HE LEGAL REPRESENTATIVE FROM THE STAGE AT WHICH IT STO OD ON THE DATE OF THE DEATH OF THE DECEASED; (B) ANY PROCEEDING WHICH COULD HAVE BEEN TAKEN AGA INST THE DECEASED IF HE HAD SURVIVED, MAY BE TAKEN AGAIN ST THE LEGAL REPRESENTATIVE; AND (C) ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACC ORDINGLY. (3) THE LEGAL REPRESENTATIVE OF THE DECEASED SHALL, FOR THE PURPOSES OF THIS ACT, BE DEEMED TO BE AN ASSESSEE. 6. A PERUSAL OF SUB-CLAUSE (B) OF SUB-SECTION (2) I NDICATE THAT IF ANY PROCEEDINGS TAKEN AGAINST THE DECEASED BEFORE H IS DEATH WOULD BE DEEMED TO HAVE BEEN TAKEN AGAINST THE L/R AND MAY BE CONTINUED AGAINST THE L/R FROM THE STAGE AT WHICH I T STOOD ON THE DATE OF THE DEATH OF THE DECEASED. IN THE PRESENT CASE, THE LD.AO HAS INITIATED ASSESSMENT PROCEEDINGS AGAINST THE DE CEASED VALIDLY. BEFORE PASSING OF THE FINAL ASSESSMENT ORDER, THE AS SESSEE HAS DIED. L/RS. HAVE COME UP ON THE RECORD. THEREFORE , IT IS TO BE ASSUMED THAT PROCEEDINGS WAS VALID AND LEGAL. ONLY IRREGULARITY AT THE MOST CAN BE THAT AN OPPORTUNITY TO BE GIVEN TO THE L/R FOR DEFENDING THEM AGAINST ANY PROPOSED ADDITION. THAT COULD NOT BE ITA NO.1447/AHD/2017 5 FULFILLED ON ACCOUNT OF TIME LIMIT DUE TO SHORT SPA N OF TIME AVAILABLE WITH THE AO. CONSIDERING THE ABOVE ASPEC T, WE SET ASIDE BOTH THE ORDERS OF THE REVENUE AUTHORITIES AND REST ORE THIS ISSUE TO THE FILE OF THE AO. HE SHALL PROVIDE AN OPPORTU NITY OF HEARING TO THE LR AND RE-ADJUDICATE THE ISSUE IN ACCORDANCE WI TH LAW. APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 9 TH JULY, 2019. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER