Late Smt. Sumana Bhojraj, Bangalore V. ITO, Bangalore

ITA 278/BANG/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5565 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 02-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS J
• Assessee Lawyers: H A K RAO; GANGADHARA SASTRY K
• Keywords: Capital asset; Period of limitation; Validity of assessment; Condonation of delay
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTENT MEMBER ITA NO. 278/BANG/2015 ASSESSMENT YEAR : 2007-08 LATE SMT. SUMANA BHOJRAJ, THROUGH L/H SRI U.A. BHOJRAJ, NO. 13, SAPTAGIRI, BRINDAVAN FARM, UTTARAHALLI, BANGALORE 560 061. PAN: AAMPB 6952C VS THE INCOME TAX OFFICER, WARD 10(2), BANGALORE. APPELLANT RESPONDENT ITA NO. 357/BANG/2016 ASSESSMENT YEAR : 2007-08 SMT. SOWMYA B. SUVARNA, DAUGHTER OF LATE SMT SUMANA BHOJRAJ, NO. 13, SAPTHAGIRI, BRINDAVAN FARM, UTTARAHALLI, BANGALORE 560 061. PAN: AAMPB 6952C VS THE INCOME TAX OFFICER, WARD 10(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI H.A.K. RAO, CA & SHRI GANGADHARA SASTRY K. RESPONDENT BY : SMT. SWAPNA DAS, JCIT(DR) DATE OF HEARING : 06.02.2017 DATE OF PRONOUNCEMENT : 07.04.2017 ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 2 OF 10 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER THESE TWO APPEALS BY TWO LEGAL HEIRS OF THE DECEASE D ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 04.02.2014 OF CIT( A) FOR THE ASSESSMENT YEAR 2007-08. THERE IS A DELAY OF 360 D AYS IN FILING THE APPEAL IN ITA NO. 357/BANG/2016. THE ASSESSEE HAS FILED A PETITION OF CONDONATION OF DELAY AS WELL AS SUPPORT ING AFFIDAVIT. THE SUBMISSIONS OF LD. AR AS WELL AS LD. DR ARE HEA RD ON THE ISSUE OF CONDONATION OF DELAY. AFTER GOING THROUGH THE A FFIDAVIT FILED BY THE ASSESSEE WE FIND THAT THE ASSESSEE HAS EXPLAINE D THE DELAY IN FILING THE APPEAL THAT THE ASSESSEE WAS NOT SERVED WITH THE IMPUGNED ORDER OF CIT(A) AND CAME TO KNOW ONLY WHEN THE ASSESSEE RECEIVED A NOTICE DATED 27.01.2016 AND 15. 02.2016 WHICH WERE ADDRESSED TO THE LEGAL HEIR OF THE ASSESSEE FO R DEMAND OF TAX PAYABLE WITH INTEREST. THUS THE ASSESSEE HAS STATE D THAT PRIOR TO THE SAID NOTICE OF DEMAND THE ASSESSEE WAS NOT EVEN AWA RE OF THE IMPUGNED ORDER. THUS, THE LD. AR OF THE ASSESSEE H AS SUBMITTED THAT THE DELAY IN FILING THE APPEAL IS NEITHER INTE NTIONAL NOR DELIBERATE BUT DUE TO THE UNAVOIDABLE REASONS THAT THE ASSESSEE WAS ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 3 OF 10 NOT SERVED WITH THE IMPUGNED ORDER OF CIT(A). ON T HE OTHER HAND, THE LD. DR HAS OPPOSED THE CONDONATION OF DELAY AND SUBMITTED THAT WHEN THE FATHER OF THE SAID ASSESSEE HAS ALREA DY FILED THE APPEAL AGAINST THE IMPUGNED ORDER WITHIN THE PERIOD OF LIMITATION THEN THE ASSESSEE WHO CLAIM TO HAVE RECEIVED THE NO TICE AT THE RESIDENCE OF THE FATHER CANNOT TAKE A PLEA THAT THE ASSESSEE WAS NOT AWARE ABOUT THE IMPUGNED ORDER OF THE CIT(A). 2. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAS EX PLAINED THE DELAY THAT THE IMPUGNED ORDER OF CIT(A) WAS NOT SER VED UPON THE ASSESSEE SMT. SOUMYA B SUVARNA AND THEREFORE ONLY W HEN THE ASSESSEE CAME TO KNOW ABOUT THE DEMAND NOTICE THE A SSESSEE HAS TAKEN THE STEPS TO TAKE THE COPY OF THE IMPUGNED OR DER AND FILED THE PRESENT APPEAL. THE REVENUE HAS NOT CONTROVERTED T HIS FACT THAT THE IMPUGNED ORDER WAS SERVED ONLY TO THE FATHER OF THE ASSESSEE WHO IS ALSO ONE OF THE LEGAL HEIR OF LATE SMT. SUMANA B HOJRAJ. ACCORDINGLY, WE FIND THAT THE ASSESSEE BEING A LEGA L HEIR OF LATE SMT. SUMANA BHOJRAJ IS ENTITLED FOR THE SERVICE OF THE IMPUGNED ORDER AS WELL AS HAS THE RIGHT TO CHALLENGE THE IMP UGNED ORDER IF ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 4 OF 10 AGGRIEVED OF THE SAME. THEREFORE WHEN THIS FACT HA S NOT BEEN DISPUTED THAT THE IMPUGNED ORDER HAS NOT BEEN SPECI FICALLY SERVED UPON THE ASSESSEE SMT. SOUMYA B SUVARNA WE ARE SATI SFIED THAT THE ASSESSEE HAS SUFFICIENT CAUSE FOR NOT FILING THE AP PEAL WITHIN THE PERIOD OF LIMITATION. ACCORDINGLY, WE CONDONE THE DELAY OF 360 DAYS IN FILING THE PRESENT APPEAL. 3. THESE TWO APPEALS BY THE LEGAL HEIRS OF LATE SMT. S UMANA BHOJRAJ HAVE BEEN FILED AGAINST THE SAME IMPUGNED ORDER OF THE CIT(A). A COMMON GROUND HAS BEEN RAISED IN THIS APPEAL REGARD ING THE VALIDITY OF ASSESSMENT ORDER PASSED BY THE AO ON TH E BASIS OF THE NOTICE ISSUED U/S. 148 ON A DEAD PERSON. FURTHER, THE ASSESSMENT ORDER HAS BEEN CHALLENGED ON THE GROUND THAT THE AO HAS NOT BROUGHT ALL THE LEGAL HEIRS ON RECORD AND PASSED TH E ASSESSMENT ORDER AGAINST THE DEAD PERSON. 4. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE N OTICE U/S. 148 WAS ISSUED BY THE AO AGAINST LATE SMT. SUMANA BHOJR AJ. SINCE THE ASSESSEE WAS ALREADY EXPIRED AND ONE OF THE LEGAL H EIR SHRI U.A. BHOJRAJ HUSBAND OF DECEASED ASSESSEE APPEARED BEFOR E THE AO AND ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 5 OF 10 APPRAISED ABOUT THE DEATH OF LATE SMT. SUMANA BHOJR AJ. THE AO HAS NOT ISSUED ANY FRESH NOTICE U/S. 148 TO THE LEG AL HEIRS OF THE REPRESENTATIVES OF THE DECEASED ASSESSEE AND THEREF ORE THE ASSESSMENT FRAMED BY THE AO IN PURSUANT TO THE NOTI CE U/S. 148 ISSUED TO A DEAD PERSON IS NOT SUSTAINABLE IN LAW. HE HAS RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN C ASE OF CIT VS. M. HEMANATHAN (384 ITR 177) AS WELL AS DECISION OF HONBLE DELHI HIGH COURT IN CASE OF VIPIN WALIA VS. ITO 238 TAXMAN 1/67 TAXMANN.COM 56 AND SUBMITTED THAT THE HONBLE HIGH COURT HAVE HELD THAT WHEN THE ASSESSEE WAS ALREADY DEAD P RIOR TO THE ISSUE OF NOTICE U/S. 148 THEN THE DEPARTMENT WAS RE QUIRED TO PROCEED BY ISSUING A NOTICE TO THE LEGAL REPRESENTA TIVE OF THE DECEASED. IN THE ABSENCE OF THE NOTICE TO THE LEGA L REPRESENTATIVE THE ASSESSEE WOULD BE AN ILLEGALITY AND NOT A MERE IRREGULARITY. THUS THE LD. AR HAS SUBMITTED THAT THE ASSESSMENT F RAMED BY THE AO WHEN ISSUING A NOTICE U/S. 148 TO THE LEGAL HEIR S IS NOT SUSTAINABLE IN LAW. 5. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT IN RESPONSE TO THE NOTICE ISSUED U/S. 148 DATED 28.07.2009, ONE OF THE LEGAL HEIR OF THE ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 6 OF 10 DECEASED ASSESSEE APPEARED BEFORE THE AO. HE HAS F URTHER SUBMITTED THAT SHRI U.A. BHOJRAJ HUSBAND AND LEGAL HEIR OF THE DECEASED ASSESSEE VIDE LETTER DATED 27.11.2009 INFO RMED THE AO ABOUT THE DEMISE OF MRS. SUMANA BHOJRAJ ON 20.08.20 08. SHRI U.A. BHOJRAJ FILED RETURN OF INCOME ON 31.12.2009 W ITH A COVERING LETTER STATING THAT THE RETURN WAS BEING FILED WITH REFERENCE TO THE NOTICE U/S. 148 DATED 28.07.2009. THUS, THE LD. DR HAS SUBMITTED THAT WHEN THE LEGAL HEIR OF THE DECEASED ASSESSEE A CCEPTED THE NOTICE U/S. 148 AND FILED THE RETURN OF INCOME THEN THE AO WAS HAVING NO OCCASION TO ISSUE FRESH NOTICE U/S. 148. THE LD. DR HAS FURTHER CONTENTED THAT ONE OF THE LEGAL HEIRS HAVE APPEARED BEFORE THE AO AND NOT RAISED ANY OBJECTION ABOUT THE VALID ITY OF NOTICE ISSUED U/S. 148 AS WELL AS THE PROCEEDINGS OF THE R EASSESSMENT THEN THE ASSESSMENT WAS MADE ON THE ASSESSEE AS LEGAL HE IRS CANNOT BE HELD AS INVALID. HE HAS FURTHER SUBMITTED THAT THE AO ALSO ISSUED NOTICE U/S. 143(2) TO THE LEGAL HEIRS AND IN RESPON SE TO THE LEGAL REPRESENTATIVE OF THE DECEASED ASSESSEE PARTICIPATE D IN THE ASSESSMENT PROCEEDINGS. THE LD. DR HAS RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) HAS GIVEN ITS FINDING ON ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 7 OF 10 THIS ISSUE BY FOLLOWING THE VARIOUS DECISIONS OF HO NBLE HIGH COURT. HE HAS RELIED UPON THE FOLLOWING DECISIONS. I) SMT KAUSHALYABAI VS CIT (1999) 238 ITR 1009(MP) II) CIT VS VISION INC (2012) 73 DTR (DELHI HC) 201/208 TAXMAN 153 III) OM SONS INTERNATIONAL VS CIT, (2011) 211 TAXMAN 195 (P & H COURT) 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE A O ISSUED A NOTICE U/S. 148 ON 28.07.2009 IN THE NAME OF SMT. SUMANA B HOJRAJ TO TAX THE CAPITAL GAIN ARISING FROM TRANSFER OF LAND UNDE R JDA. IN RESPONSE TO THE SAID NOTICE THE HUSBAND OF SMT. SUM ANA BHOJRAJ HAS APPEARED BEFORE THE AO AND INFORMED THAT SHE HA D ALREADY DIED ON 20.08.2008. HOWEVER, SHRI U.A. BHOJRAJ FILED A RETURN OF INCOME STATING THAT THESE WERE BEING FILED IN RESP ONSE TO THE NOTICE U/S. 148 THEREFORE SO FAR AS THE LEGAL REPRESENTATI VE SHRI U.A. BHOJRAJ IS CONCERNED, HE HAS ACCEPTED THE NOTICE U/ S. 148 AND ALSO FILED THE RETURN OF INCOME. FURTHER, IT WAS INCUMB ENT UPON THE AO TO BRING ALL THE LEGAL REPRESENTATIVE OF THE DECEAS ED ASSESSEE ON RECORD AND THEN FRAME THE ASSESSMENT. IN THIS CASE SINCE THE RETURN ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 8 OF 10 OF INCOME WAS FILED SHRI U.A. BHOJRAJ IN RESPONSE T O THE NOTICE U/S. 148, THEN THE STAGE OF ISSUING THE FRESH NOTICE U/S . 148 WAS OVER. THE AO PROCEEDED ON THE RETURN FILED BY SHRI U.A. B HOJRAJ AND FRAMED THE ASSESSMENT BY BRINGING ON RECORD SHRI U. A. BHOJRAJ AS LEGAL REPRESENTATIVE. THUS THE AO HAS NOT BROUGHT ALL THE LEGAL REPRESENTATIVES ON RECORD BEFORE FRAMING THE ASSESS MENT IN QUESTION. THEREFORE THERE IS A CLEAR INFIRMITY IN THE IMPUGNED ORDER OF THE AO. AS REGARDS THE DECISIONS RELIED U PON BY THE LD. AR OF THE ASSESSEE WE FIND THAT ONCE THE LEGAL HEIR OF THE DECEASED ASSESSEE HAS ACCEPTED THE NOTICE U/S. 148 AND FILED RETURN OF INCOME THEN THE AO WAS PROMPTED FROM ISSUING FRESH NOTICE U/S. 148 TO THE LEGAL REPRESENTATIVES. HOWEVER SINCE ALL THE LEGAL REPRESENTATIVES WERE NOT BROUGHT ON RECORD WHICH IS THE REQUIREMENT IN CASE OF DEATH OF THE ASSESSEE THEN THE IMPUGNED ASSESSMENT ORDER IS SUFFERING FROM IRREGULARITY SO FAR AS THE OTHER LEG AL REPRESENTATIVES HAVE NOT BEEN GIVEN THE OPPORTUNITY TO PRESENT THEI R CASE. AS REGARDS SHRI U.A. BHOJRAJ SINCE HE HAS ALREADY PART ICIPATED IN THE PROCEEDINGS AND FILED RETURN OF INCOME THEN HE CANN OT TAKE THE OBJECTION TO CHALLENGE THE VALIDITY OF ASSESSMENT O RDER. SMT. SOUMYA B SUVARNA THE OTHER LEGAL REPRESENTATIVE BEI NG THE ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 9 OF 10 DAUGHTER OF THE DECEASED ASSESSEE HAS NOW CHALLENGE D THE IMPUGNED ORDER OF THE AO. THEREFORE IN THE FACTS A ND CIRCUMSTANCES OF THE CASE, AS WELL AS IN THE CASE O F JUSTICE WE SET ASIDE THE ASSESSMENT ORDER AND REMAND THE MATTER TO THE RECORD OF AO TO DO A FRESH EXERCISE OF ASSESSMENT AFTER BRING ING ALL THE LEGAL REPRESENTATIVES ON RECORD. SINCE THE IMPUGNED ASSE SSMENT ORDER IS SET ASIDE AND REMANDED ON LEGAL ISSUE THEREFORE WE DO NOT PROPOSE TO GO INTO THE OTHER GROUNDS RAISED ON THE MERITS. THE SAME ARE LEFT OPEN. WE MAY CLARIFY THAT THE AO WHILE FRAMING THE ASSESSMENT AFRESH SHALL CONSIDER THE OBJECTIONS OF THE ASSESSE E ON MERITS OF THE ISSUE OF CAPITAL GAIN. 7. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DAY OF APRIL, 2017 SD/- SD/- (S. JAYARAMAN) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 07 TH APRIL, 2017. / MS/ ITA NOS. 278/BANG/2015 & 357/BANG/2016 PAGE 10 OF 10 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.