Late Shri Keshavlal Somnath Panchal, Through Widow & L/H Smt. Champaben Keshavlal Patel, Ahmedabad V. The ITO, Ward-4(2)(2), Ahmedabad

ITA 159/AHD/2020

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2855 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 12-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN
• Keywords: Set aside
• Section: 142(1); 148; 144

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO.159/AHD/2020 / ASSTT.YEAR : 2017-18 LATE SHRI KESHAVLAL SOMNATH PANCHAL THROUGH WIDOW & LEGAL HEIR SMT.CHAMPABEN KESHAVLAL PATEL B-101, SHANTI RESIDENCY ARUN, NIRNAYNAGAR, CHANDLODIYA AHMEDABAD 382 481. PAN : BIPPP 5899 G VS. ITO, WARD - 4(2)(2) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI P.F. JAIN, AR REVENUE BY : SHRI DIL IP KUMAR, SR.DR / DATE OF HEARING : 06/03/2020 ! / DATE OF PRONOUNCEMENT: 16/03/2020 / O R D E R PER RAJPAL YADAV, VICE-PRESIDENT ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-4, AHMEDABAD DATED 27.1.2020 PASSED FOR T HE ASSTT.YEAR 2017-18. 2. ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL, BUT I N BRIEF, HER GRIEVANCE IS THAT THE LD.CIT(A) HAS ERRED IN DISMISSING THE APPE AL BEING NON-MAINTAINABLE AND CONFIRMATION OF ADDITION OF RS.57,01,100/-. 3. BRIEF FACTS OF THE CASE ARE THAT, ON THE BASIS O F DATA ANALYSIS AND INFORMATION GATHERED DURING THE PHASE OF ON-LINE VE RIFICATION UNDER OPERATION ITA NO.159/AHD/2020 2 CLEAN MONEY, THE AO CAME TO KNOW THAT CASH WAS DEP OSITED IN SAVING BANK ACCOUNT NO.30814030119 WITH STATE BANK OF INDIA, NI RNAYNAGAR BRANCH DURING THE DEMONETIZATION PERIOD. CASH DEPOSITED B Y THE ASSESSEE DURING THIS PERIOD AMOUNTED TO RS.10,32,000/-. THE AO FURTHER FOUND THAT TOTAL CREDIT ENTRIES IN THIS ACCOUNT WERE OF RS.57,01,099/-. TH ESE TRANSACTIONS INCLUDED CHEQUE TRANSACTIONS ALSO. THE BANK ACCOUNT WAS IN THE NAME OF KESHAVLAL SOMNATH PANCHAL. HE DID NOT FILE HIS RETURN OF INC OME. THEREFORE, A NOTICE UNDER SECTION 142(1) WAS ISSUED ON 12.3.2018 CALLIN G THE ASSESSEE TO PREPARE A TRUE AND CORRECT RETURN OF INCOME OF WHICH HE IS AS SESSABLE UNDER THE INCOME TAX ACT. ACCORDING TO THE AO, THE ASSESSEE DID NOT FILE RETURN NOR RESPONDED TO THE NOTICES ISSUED ON ITBA PORTAL/SPEED POST. H E ACCORDINGLY PASSED EX PARTE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT AND MADE ADDITION OF RS.57,01,100/-. DISSATISFIED WITH THE ASSESSMENT O RDER, THE APPELLANT, SMT. CHAMPABEN KESHAVLAL PATEL BEING LEGAL HEIR OF LATE SHRI KESHAVLAL SOMNATH PANCHAL FILED APPEAL BEFORE THE FIRST APPELLATE AUT HORITY. THE LD.CIT(A) HAS DISMISSED THE APPEAL BY HOLDING THAT IT WAS FILED M ANUALLY AND NOT ON-LINE. THE LD.CIT(A) HAS REPRODUCED COMPLETE ASSESSMENT OR DER IN THE IMPUGNED ORDER FROM PAGE NO.2 TO 19. THEREAFTER, SHE HAS RE CORDED A BRIEF FINDING HOLDING THAT AS PER RULE 45 OF THE INCOME TAX RULES , THE ASSESSEE WAS REQUIRED TO SUBMIT APPEAL ELECTRONICALLY THROUGH TH E PORTAL OF THE DEPARTMENT, AND SINCE HE FILED THE APPEAL MANUALLY, THEREFORE, IT WAS NOT MAINTAINABLE. 4. THE ASSESSEE HAS FILED AN APPLICATION FOR EARLY HEARING. DURING THE COURSE OF HEARING OF THE APPLICATION, WE WERE OF TH E VIEW THAT APPEAL ITSELF DESERVES TO BE DISPOSED OF, BECAUSE, LD.CIT(A) HAS DISPOSED OF THE APPEAL ON TECHNICAL GROUND. THEREFORE, WE GAVE OPPORTUNITY T O BOTH THE SIDES TO ARGUE THE APPEAL ON MERIT ALSO. 5. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING ORDERS OF THE REVENUE AUTHORITIES SUBMITTED THAT SHRI KESHAVLAL SOMNATH P ANCHAL EXPIRED ON ITA NO.159/AHD/2020 3 2.10.2017; NOTICE UNDER SECTION 142(1) WAS ISSUED O N 12.3.2018. THUS, THIS NOTICE WAS ISSUED ON A DEAD PERSON. THE ASSESSMENT ORDER HAS ALSO BEEN PASSED ON DEAD PERSON. HENCE, ASSESSMENT ORDER IS VOID AB INITIO AND DESERVES TO BE QUASHED. AS FAR AS DISMISSAL OF THE APPEAL BY THE LD.CIT(A) IS CONCERNED, HE FILED A NOTE; CONTENTS THEREIN READ A S UNDER: 1. WITH REFERENCE TO ABOVE APPEAL AGAINST ORDER U/ S.144 HAS BEEN MADE AS APPEAL BEFORE THE CIT(A) WAS MANUALLY FILED , AS THE ASSESSEE HAS DIED EVEN BEFORE ASSESSMENT PROCEEDINGS INITIA TED. 2. THE APPEAL HAS BEEN DISMISSED BY THE CIT(A) SIMP LY ON THE GROUND THAT MANUAL APPEAL IS NOT MAINTAINABLE . 3. AS PER RULE 45 OF INCOME-TAX RULES,1962 MENTIONE D UNDER PART-X UNDER THE HEADING APPEALS, SUB-RULE 2(D) , IT HAS B EEN MENTIONED THAT IN CASE, WHERE THE ASSESSEE HAS THE OPTION TO FURNI SH THE RETURN OF INCOME IN PAPER FORM BY FURNISHING THE ELECTRONICAL LY IN ACCORDANCE WITH CLAUSE-(A) OF SUB-RULE -2 OR IN PAPER FORM. 4. THE MANNER OF FURNISHING RETURN OF INCOME HAS BEEN GIVEN IN RULE- 12- PART-ILL UNDER THE HEADING 'ASSESSMENT PROCEDUR E', RETURN OF INCOME.... IN CLAUSE-3 OF THIS RULE IN THE TABLE MA NNER OF FURNISHING RETURN OF INCOME HAS BEEN GIVEN. AT SR.NO.L OF TABL E, WHERE RETURN IS TO BE FILED IN ITR-5, IN COL.C , THERE IS OPTION AS RE PRODUCED BELOW:- (C) IN ANY OTHER CASE AS MENTIONED IN CLAUSE (D) THERE IS OPTION FOR FILING RETURN IN PAPER FORM. (COPY OF RULE-45 FOR FILING APPEAL TO CIT(A) AND PA RT-ILL RULE 12 FOR MODE OF FILING RETURN OF INCOME ENCLOSED. 5. AS ASSESSEE BEING DECEASED, NO RETURN OF INCOME WAS FILED BY HIM AND AS PER EARLIER RETURNS OF INCOME ON RECORD OF D EPARTMENT, ASSESSEE WAS FILING RETURN IN FORM - ITR-V. 6. THEREFORE, THE APPEAL TO CIT(A) WAS FILED MA NUALLY READ WITH RULE 45 AND RULE-12 OF INCOME-TAX RULES,1962 . ITA NO.159/AHD/2020 4 7. THEREFORE, THE DISMISSAL OF MANUAL APPEAL BY THE HON'BLE CIT(A) AS NON-MAINTAINABLE IS RESPECTFULLY SUBMITTED TO BE AGAINST THE RELEVANT RULES AS MENTIONED ABOVE. 6. IN THIS WAY, HE ARGUED THAT ORDERS OF BOTH THE A UTHORITIES SHOULD BE QUASHED. ON THE OTHER HAND, THE LD.DR WAS UNABLE T O CONTROVERT THE CONTENTIONS OF THE LD.COUNSEL FOR THE ASSESSEE. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. WE FIND THAT BEFORE SERVICE OF NOTICE U NDER SECTION 142(1) SHRI KESHAVLAL SOMNATH PANCHAL HAD ALREADY EXPIRED. HIS LEGAL HEIRS DID NOT FILE RETURN FOR THIS ASSESSMENT YEAR. THEREFORE, THE RI GHT COURSE FOR THE AO IS TO FIND OUT L/RS, AND MORE PARTICULARLY, L/R WHO HAS I NHERITED ASSETS AND LIABILITIES OF SHRI KESHAVLAL SOMNATH PANCHAL BECAU SE L/R IS LIABLE TO PAY TAXES OF THE DECEASED ONLY EQUIVALENT TO THE PROPER TY INHERITED FROM THE DECEASED. FOR EXAMPLE, IN THE PRESENT CASE, IF THE ASSESSMENT ORDER IS FINALIZED, BUT LATER ON SMT. CHAMPABEN KESHAVLAL PA TEL COMES FORWARD AND STATES THAT SHE HAS NOT INHERITED ANY PROPERTY FROM SHRI KESHAVLAL SOMNATH PANCHAL, THEN DEMAND CANNOT BE RECOVERED. OTHER L/ RS. IF ANY WOULD TAKE AN OBJECTION THAT THEY HAVE NOT SERVED ANY NOTICE UNDE R SECTION 142(1) OR UNDER SECTION 148 ETC. THEREFORE, PROCEDURE FOLLOWED BY THE AO IN THE PRESENT CASE IS PATENTLY ILLEGAL. SERVICE OF NOTICE UPON A DEAD PERSON UNDER SECTION 142(1) WOULD NOT AUTHORISE HIM TO ASSUME JURISDICTION TO P ASS ASSESSMENT ORDER ON THE L/RS. ALSO. THE RIGHT COURSE FOR HIM IS TO EXP LORE JURISDICTION FOR ISSUING A NOTICE ON THE L/RS. OF SHRI KESHAVLAL SOMNATH PANCH AL. THIS ASPECT COULD HAVE BEEN EXAMINED BY THE LD.CI(A). HAD SHE GONE T HROUGH WRITTEN SUBMISSIONS TAKEN NOTE IN PARA -2 OF THE IMPUGNED, WHEREIN IT WAS ALLEGED THAT SHRI KESHAVLAL SOMNATH PANCHAL DIED ON 2.10.2017, T HEN HIS APPEAL COULD HAVE BEEN ALLOWED TO BE ENTERTAINED MANUALLY AS PRO VIDED IN RULE 45 AND 12 OF THE INCOME TAX RULES. ITA NO.159/AHD/2020 5 8. AFTER GOING THROUGH THE ABOVE PROVISIONS, AND KE EPING IN MIND NOTE PLACED BY THE LD.COUNSEL FOR THE ASSESSEE EXPLAININ G THE PROCEDURE REQUIRED TO BE FOLLOWED IN THE PRESENT CASE, WE ARE SATISFIED T HAT LD.CIT(A) OUGHT TO HAVE ENTERTAINED THE PRESENT APPEAL, AND SHOULD HAVE DEC IDED ON MERIT. THEREFORE, WE SET ASIDE THE ORDERS OF THE LD.CIT(A) AND RESTOR E THE ISSUE TO THE FILE OF THE LD.CIT(A) FOR RE-ADJUDICATION. 9. THE OBSERVATION MADE BY US FOR EXPLAINING THE PO SITION CONTEMPLATED IN SECTION 159 OF THE INCOME TAX ACT FOR ASSESSING THE LEGAL HEIRS WILL NOT IMPAIR OR INJURE THE CASE OF THE AO, AND WILL NOT CAUSE AN Y PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE OR OTHER LEGAL HEIRS IN FUTURE. THIS OBSERVATION IS MADE ONLY FOR THE PURPOSE OF EXPLAIN ING THE SITUATION. 10. WITH THE ABOVE OBSERVATION, APPEAL OF THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 16 TH MARCH, 2020 AT AHMEDABAD. SD/ - (WASEEM AHMED) ACCOUNTANT MEMBER SD/ - (RAJPAL YADAV) VICE-PRESIDENT