ITO, Rohtak V. Sh. Ram Kumar, Haryana

ITA 1632/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7056 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Period of limitation; Difference of opinion; Reassessment proceedings; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 113; 255(4)

Judgement Text

I.T.A .NO.-1632/DEL/2016 ITO VS RAM KUMAR IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-1632/DEL/2016 (ASSESSMENT YEAR-2006-07) ITO, WARD-3, AAYAKAR BHAWAN, ROHTAK. ( APPELLANT) VS RAM KUMAR, S/O-LATE SH.RAMPHAL, VPO, PARNALA, BAHADURGARH, DISTT.-JHAJJAR, HARYANA. PAN-ANEPR8870L. (RESPONDENT) ASSESSEE BY S H. F.R.MEENA, SR.DR REVENUE BY NONE DATE OF HEARING 10 . 11 .2016 DATE OF PRONOUNCEMENT 09 . 01 .201 7 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AS SAILING THE CORRECTNESS OF THE ORDER DATED 15.01.2016 OF CIT(A), ROHTAK PERTAINING TO 200607 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THE CIT(A) HAS ERRED IN LAW AND FACTS IN DELETI NG THE ADDITION OF RS. 35,22,886/- MADE BY THE AO ON ACCOUNT OF INCOME FRO M UNDISCLOSED SOURCES BY CONSIDERING NOTICE U/S 148 VOID ABINITIO BUT THE NO TICE U/S 148 WAS DULY SERVED UPON SMT. SUNITA THE DAUGHTER IN LAW OF ASSESSEE WH O FAILED TO INFORM ABOUT DEATH OF THE ASSESSEE. THE NOTICE WAS SERVED UPON 2 8.03.2011 THERE WAS STILL TIME LEFT IF IT WAS CONVEYED TO THE AO ABOUT THE DE MISE OF ASSESSEE THE NOTICE CAN AGAIN BE SERVED UPON THE LEGAL HEIR AT THAT TIM E. ALSO THE FACT OF DEMISE OF ASSESSEE CAME TO THE KNOWLEDGE OF AO ONLY AFTER THE INSPECTOR REPORTED IT ON 12.03.2014. 2. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. DESPITE THE FACT THAT NOTICE FOR THE SPECIFIC DATE OF HEARING HAD BE EN ISSUED TO THE ASSESSEE ON 10.10.2016 AT THE ADDRESS INDICATED IN COLUMN NO. 11 IN THE MEMO OF APPEAL FILED BY THE REVENUE. HOWEVER, CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT IS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX-PARTE QUA THE ASSESSEE-RESPONDENT ON MERIT AFTER HEARING THE LD. SR.DR. 3. THE RELEVANT FACTS OF THE CASE ARE THAT AS A RES ULT OF NOTICE UNDER SECTION 148 ISSUED TO THE ASSESSEE ON 28/30.03.2013. THE ASSESSEE WAS REQ UIRED TO EXPLAIN THE DEPOSITS MADE IN HARYANA GRAMIN BANK, B.O.PARNALA. SINCE NO COMPLIAN CE WAS MADE ON BEHALF OF THE PAGE 2 OF 3 I.T.A .NO.-1632/DEL/2016 ITO VS RAM KUMAR ASSESSEE, ADDITION OF THE DEPOSITS MADE IN THE SAI D BANK ACCOUNT WERE ADDED TO THE INCOME OF THE ASSESSEE BY AN ORDER UNDER SECTION 144/147 O F THE ACT. 4. AGGRIEVED BY THIS, THE ASSESSEE CAME IN APPEAL B EFORE THE CIT(A) PLEADING THAT SRI RAM PHAL HAD EXPIRED ON 07.12.2012. THUS, THE AFORE SAID NOTICE ISSUED IN THE NAME OF A DEAD PERSON COULD NOT BE SERVED UPON HIM. RELYING O N ITO VS SIKANDAR LAL JAIN 45 SOT 113 (AGRA)(TM)(TRIB.) IT WAS SUBMITTED THAT NOTICE ISSUED IN THE NAME OF A DEAD PERSON IS NOT A VALID NOTICE IN THE EYES OF LAW. THE FOLLOWING EXT RACT OF THE ORDER FROM THE DECISION WAS RELIED UPON:- P.K.BANSAL, ACCOUNTANT MEMBER 1. THERE BEING DIFFERENCE OF OPINION BETWEEN BOTH T HE MEMBERS CONSTITUTING THE BENCH, THE MATTER WAS REFERRED BY HONBLE PRESI DENT UNDER SECTION 255(4) OF THE INCOME TAX ACT TO THE THIRD MEMBER FOR ADJUDICA TION ON TWO QUESTIONS. THE LEARNED JUDICIAL MEMBER HAD CONFIRMED THE ORDER OF CIT(A) QUASHING THE REASSESSMENT PROCEEDINGS BOTH ON THE BASIS OF INVAL IDITY OF NOTICE HAVING BEEN ISSUED ON THE DEAD PERSON AND THE SERVICE OF N OTICE ON LEGAL HEIR OF ASSESSEE BEYOND THE PERIOD OF LIMITATION, WHEREAS THE LEARNED ACCOUNTANT MEMBER SET ASIDE THE ORDER OF LD.CIT(A HOLDING THE REASSESSMENT PROCEEDINGS AS VALID HAVING BEEN INITIATED AFTER ISSUING VALID NO TICE AND ITS PROPER SERVICE. THE THIRD MEMBER VIDE HIS OPNION DATED 08.12.2010 CONCU RRED WITH THE DECISION REACHED BY LEARNED JUDICIAL MEMBER ON INVALIDITY OF NOTICE HAVING BEEN ISSUED ON THE DEAD PERSON THEREBY RENDERING THE REASSESSMENT PROCEEDINGS AS VLID AND AGREED WITH THE LEARNED ACCOUNTANT MEMBER ON THE VA LIDITY OF SERVICE OF NOTICE HOLDING THAT THE NOTICE COULD BE VALIDLY SERVED BEY OND THE TIME-LIMIT PRESCRIBED UNDER SECTION 149 OF THE INCOME TAX ACT. (EMPHASIS PROVIDED) 4.1. RELIANCE WAS ALSO PLACED UPON THE DECISION IN DECCAN WINE AND GENERAL STORES VS CIT 106 ITR 111 (AP) ON THE FOLLOWING PROPOSITION:- .THE ISSUANCE OF A VALID NOTICE IS A FOUNDATION FOR THE VALIDITY OF THE RE- ASSESSMENT. THERE IS A CLEAR CUT DISTINCTION BETWEE N THE PRECEDENT AND PROCEDURE. THE DEFECT IN THE PROCEDURE WILL NOT NORMALLY AMOUN T TO LACK OF JURISDICTION. THE NOTICE PRESCRIBED U/S 148 FOR THE PURPOSE OF INITIA TION OF RE-ASSESSMENT PROCEEDINGS IS NOT A MERE PROCEDURAL REQUIREMENT, B UT IS A CONDITION PRECEDENT TO THE VALIDITY OF RE-ASSESSMENT. IF NO NOTICE IS ISSU ED OR IF THE NOTICE ISSUED IS SHOWN TO BE INVALID, THE PROCEEDINGS INITIATED BY THE ASS ESSING OFFICER WOULD BE INVALID AND VOID. THE ASSESSMENT FRAMED ON THE BASIS OF SUC H INVALID PROCEEDINGS WILL BE INVALID. 4.2. APART FROM THAT RELIANCE IS ALSO PLACED UPON T HE FOLLOWING DECISIONS:- 1. CIT VS RAKESH KUMAR, MUKESH KUMAR L/H OF LATE MO HAR SINGH 313 ITR 305 (P&H); 2. MRS. VEENA VIJ VS ITO IN ITA NO.1299/DEL/2012 (I TAT/DELHI); 3. SHAIKH ABDUL KADAR VS ITO REPORTED AT 34 ITR 451 (MP.); 4. ITO VS GANGA PRASAD JAISWAL REPORTED AT 39 ITD 4 44 (ALL.); 5. SMT. KESAR DEVI VS CIT REPORTED AT 321 ITR 344 ( RAJ.) PAGE 3 OF 3 I.T.A .NO.-1632/DEL/2016 ITO VS RAM KUMAR 4.3. CONSIDERING THE ABOVE LEGAL AND FACTUAL POSITI ON, THE ASSESSMENT ORDER WAS HELD TO BE VOID AB INITIO. 5. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFO RE THE TRIBUNAL. 5.1. THE LD. SR.DR RELIES UPON THE ASSESSMENT ORDER . HOWEVER, THE FACTUAL FINDING OF ISSUANCE OF NOTICE 28-30/03.2013 IN THE NAME OF THE DEAD ASSESSEE WHO HAD ALREADY EXPIRED ON 07.12.2012 AND LACK OF NOTICE TO THE LEGAL HEIRS OF THE ASSESSEE AT ALL WAS NOT DISPUTED. 6. I HAVE HEARD THE SUBMISSIONS OF THE LD.SR.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE LEGAL PRECEDENT CITED BEFORE THE FIRST APPELLATE AUTHORITY. IT IS A MATTER OF RECORD THAT THERE IS NO DISPUTE ON THE FACT THAT NO TICE UNDER SECTION 148 WAS ISSUED IN FAVOUR OF SRI RAM PHAL ON 28/30.03.2013. THE DEATH CERTIFICAT E EVIDENCING THAT SRI RAM PHAL EXPIRED ON 07.12.2012 IS AN UNDISPUTED FACT ON RECORD. IT IS ALSO SEEN THAT NO NOTICE IN FAVOUR OF THE LEGAL HEIRS OF THE ASSESSEE WAS ISSUED BY THE AO. IN THE AFOREMENTIONED PECULIAR FACTS AND CIRCUMSTANCES, CONSIDERING THE LEGAL PRECEDENT CITE D, I FIND NO INFIRMITY IN THE IMPUGNED ORDER. THE LAW IS WELL-SETTLED NOTICE ISSUED IN THE NAME O F A DEAD PERSON CANNOT BE HELD TO BE A VALID AND ONCE THE NOTICE ITSELF IS BAD IN LAW, THE SUBSE QUENT PROCEEDINGS CANNOT SURVIVE. ACCORDINGLY, UPHOLDING THE FINDING OF THE CIT(A), THE DEPARTMENT APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09 TH OF JANUARY 2017. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI