Late Deverasetty Venkata Subbarao LR D.Ravi Kumar, , Guntur V. The Income Tax Officer, Ward-1(3), , Guntur

ITA 339/VIZ/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3173 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Invalid notice; Revision of order; Reassessment proceedings; Set aside
• Section: 143(3); 292BB; 143(2); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 3 39 /VIZ/201 9 ( / A SSESSMENT Y EAR : 20 08 - 09 ) LATE DEVERASETTY VENKATA SUBBA RAO LR D.RAVIKUMAR 18 - 1 - 41, SATTENAPALLI GUNTUR [PAN : A SBPD9432C ] VS INCOME TAX OFFICER WARD 1(3) GUNTUR ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHR I G.V.N.HARI , AR / RESPONDENT BY : SMT.SUMAN MALIK, DR / DATE OF HEARING : 11 .0 3 .2020 / DATE OF PRONOUNCEMENT : 12 .0 3 . 20 20 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] - 1,GUNTUR IN APPEAL NO.123/2016 - 17 DATED 26.12.2016 FOR THE ASSESSMENT YEAR (A.Y.)2008 - 09. 2 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR 2. IN THIS CASE, GROUND NO.1 IS RELATED TO THE ISSUE OF NOTICE U/S 143(2) R.W.S. 263,(WRONGLY TYPED AS (143(3) IN GROUNDS)ON A DEAD PERSON FOR TAKI NG UP THE ASSESSMENT . THE ASSESSEE CHALLENGED THE NOTICE ISSUED ON A DEAD PERSON AND INVALID A S NOT CURABLE MISTAKE U/S 292B OR SECTION 292BB OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 3. BRIEF FACTS OF THE CASE ARE THAT THE IN THIS CASE, THE ASSES SEE FILED THE RETURN OF INCOME FOR THE A.Y.2008 - 09 ON 09.11.2009 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT ON 31 . 03 . 2011. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 263 OF THE ACT BY AN ORDER DATED 16.09.2014. SU BSEQUENT TO PASSING THE ORDER U/S 143(3), R.W.S. 263 DATED 16.09.2014, THE LD. PR.CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AGAIN AND PASSED THE ORDER SETTING ASIDE THE ASSESSMENT MADE ON 16.09.2014 WITH A DIRECTION TO REDO THE ASSESSMENT IN ACCORDANC E WITH THE PROCEDURE AND LAW AFTER AFFORDING THE ASSESSEE, REASONABLE OPPORTUNITY BY AN ORDER DATED 20.10.2016. FOR GIVING EFFECT TO THE ORDER OF THE LD.PR.CIT, THE AO HAD ISSUED NOTICE U/S 143(2) ON DEVARASETTY VENKATA SUBBA RAO WHO WAS EXPIRED BY THE TI ME OF ISSUE OF NOTICE AND THE NOTICE WAS SERVED ON THE LEGAL HEIR , MR.RAVI KUMAR . IN RESPONSE TO THE NOTICE THE LD.AR OF THE ASSESSEE APPEARED AND FILED WRITTEN SUBMISSIONS AND THE AO 3 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 263 IN THE NAME OF SRI D.RAVI KUMAR, LEGAL HEIR OF LATE DEVARASETTY VENKATA SUBBA RAO BY AN ORDER U/S 143(3) R.W.S. 263 ON 26.12.2016 AND ASSESSED THE TOTAL INCOME AT RS.12,48,690/ - . 4. AGAINST WHICH THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND ARGUED THAT THE NOTICE U/S 143(2) WAS ISSUED ON A DEAD PERSON AND THE SAME IS INVALID, WHICH CANNOT BE CURED EITHER U/S 292B OR 292BB OF THE ACT AND THUS ARGUED THAT THE ASSESSMENT MADE U/S 143(3) R.W.S. 263 DATED 26.12.2016 REQUIRED TO BE QUASHED. NOT BEING CONVINCED WITH THE ARGUMENT OF THE ASSESSEE, THE LD.CIT(A) UPHELD THE VALIDITY OF ISSUE OF NOTICE AND THE ASSESSMENT MADE U/S 143(3) AND DISMISSED THE APPEAL OF THE ASSESSEE ON THIS GROUND. 5. AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL, CHALLENGING THE ORDER OF THE L D.CIT(A). DURING THE APPEAL HEARING, THE LD.AR SUBMITTED THA T SRI DEVARASETTY VENKATA SUBBA R AO WAS EXPIRED, HENCE , THE AO HA S PASSED ASSESSMENT ORDER U/S 143(3) ON 16.09.2014 IN THE NAME OF THE LEGAL HEIR. SUBSEQUENTLY, THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION U/S 263 AND PASSED ORDER U/S 263 IN THE NAME OF DEAD PERSON. HENCE, THE ORDER PASSED U/S 263 IS INVALID. KNOW ING FULLY WELL THAT 4 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR THE ASSESSEE HAD EXPIRED, THE AO ISSUED NOTICE U/S 143(2) ON A DEAD PERSON AND FRAMED THE ASSESSMENT IN THE NAME OF LEGAL HEIRS. SINCE THE NOTICE U/S 143(2), IS A PRIMARY REQUIREMENT FOR INITIATING THE PROCEEDINGS U/S 143(3) R.W.S. 263 WHICH WAS ISSUED ON A DEAD PERSON IS INVALID, HENCE, ARGUED THAT CONSEQUENT ASSESSMENT FRAMED U/S 143(3) R.W.S. 263 CANNOT STAND ON ITS LEGS, HENCE REQUESTED TO QUASH THE ASSESSMENTS MADE U/S 143(3) R.W.S. 263 ORDER DATED 2 6 .1 2 .2016. THE LD.AR RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF SRI AEMALA VENKATESWARA RAO VS. ITO,GUNTUR IN I.T.A. NO.227/VIZ/2017 DATED 03.03.2019 AND LATE TANGUTURI VENKATA SUBBAYYA VS. ITO, PALAKOL IN I.T.A NO.226/VIZ/2018 DATED 28.06.2019, WHEREIN THE TRIBUNAL HELD TH AT THE NOTICE ISSUED ON A DEAD PERSON U/S 148 WAS INVALID AND ACCORDINGLY QUASHED THE NOTICES U/S 148. SINCE THE FACTS ARE IDENTICAL, THE LD.AR REQUESTED TO QUASH THE NOTICE U/S 143(2) AND CONSEQUENT ASSESSMENTS. 6. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND ARGUED THAT ISSUE OF NOTICE ON A DEAD PERSON CANNOT MAKE THE ASSESSMENT INVALID , SINCE , THE LEGAL REPRESENTATIVE HAS RESPONDED TO THE NOTICE AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. THE FACTS OF THIS CASE AR E DISTINGUISHABLE WITH THAT OF THE CASE LAWS RELIED UPON BY THE 5 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR ASSESSEE. IN THIS CASE, THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 263 WHICH IS A CONSEQUENTIAL ORDER, GIVING EFFECT TO THE ORDER OF THE LD.PR.CIT, WHEREAS IN THE CASE LAWS RELIED UPON BY THE ASSESSEE, THE NOTICE WAS ISSUED U/S 148 FOR REOPENING THE ASSESSMENT. THEREFORE, ARGUED THAT THE CASE LAWS RELIED UPON BY THE LD.AR CANNOT COME TO THE HELP OF THE ASSESSEE, HENCE, REQUESTED TO UPHOLD THE ORDER OF THE AO AND DISMISS THE APPEAL OF THE ASSES SEE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAD EXPIRED BEFORE PASSING THE ORDER U/S 263 DATED 20.10.2016. THIS FACT IS EVIDENT FROM THE ORDER PASSED U/S 143(3)) ON 16.09.2014 WHICH WAS PASSED IN THE NAME OF SRI DEVERASETTY RAVIKUMAR, LEGAL REPRESENTATIVE OF LATE SRI D.V.SUBBA RAO. THE LD.PR.CIT PASSED ORDER U/S 263 ON A DEAD PERSON, WHICH IS ALSO INVALID. IN THE ORDER U/S 263, THE LD.CIT HAS SET ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 263, WITH A DIRECTION TO REDO THE ASSESSMENT AFTER GIVING OPPORTUNITY TO THE ASSESSEE. THEREBY, THE ORDER U/S 143(3) DATED 16.09.2014 WAS SET ASIDE BY ORDER OF 263. FOR INITIATION OF REASSESSMENT PROCEEDINGS, THE AO REQUIRED TO ISSUE NOTICE U /S 143(2) WHICH THE AO HA S ISSUED IN THE NAME OF DEAD PERSON . INITIATION OF PROCEEDINGS U/S 143(2) ON 6 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR A DEAD PERSON IS BAD IN LAW AND MAKES THE ASSESSMENT ALSO INVALID. THIS VIEW IS S UPPORTED BY THE DECISION OF TH IS TRIBUNAL RELIED UPON BY THE LD.AR IN THE CASES OF AEMALA VENKATESWARA RAO (SUPRA) AND LATE TANGUTURI VENKATA SUBBAYYA (SUPRA). FOR THE SAKE OF CLARITY AND CONVENIENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THIS TRIBUNAL IN PARA NO.7.1 IN THE CASE OF LATE TANGUTURI VENKATA SUBBAYYA VS. ITO, PALAKOL (SUPRA) WHICH READS AS UNDER : 7.1. IN THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE HAD EXPIRED AND NOTICE WAS ISSUED ON DEAD PERSON. THOUGH SUBSEQUENTLY, NOTICE U /S 143(2) WAS ISSUED IN THE NAME OF HIS WIFE AND THE SAME CANNOT VALIDATE THE INVALID NOTICE. THE NOTICE ISSUED ON A DEAD PERSON IS HELD TO BE INVALID AS DISCUSSED EARLIER IN THIS ORDER. ONCE THE NOTICE ISSUED U/S 148 IS INVALID, SUBSEQUENT PROCEEDINGS AL SO BECOME INVALID AND RENDERS THE ASSESSMENT INFRUCTUOUS. HENCE, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THIS TRIBUNAL IN THE CASE CITED SUPRA, WE QUASH THE NOTICE U/S 148 AND CANCEL THE ASSESSMENT MADE U/S 143(3) R.W.S.147 OF THE ACT. 7.1. IN THE INST ANT CASE, THERE IS NO DISPUTE THAT THE NOTICE U/S 143(2) WAS ISSUED ON A DEAD PERSON AND THE ORDER U/S 263 WAS ALSO PASSED ON A DEAD PERSON. THEREFORE, TAKING CONSISTENT VIEW, WE HOLD THAT THE ISSUE OF NOTICE U/S 143(2) ON A DEAD PERSON IS INVALID AND REN DERS THE ASSESSMENT MADE U/S 143(3) R.W.S. 263 VOID - AB - INITIO . ACCORDINGLY, WE QUASH THE NOTICE U/S 143(2) AND THE CONSEQUENT ASSESSMENT MADE U /S 143(3) R.W.S. 263 AND ALLOW THE APPEAL OF THE ASSESSEE. 7 I.T.A. NO. 3 39 /VIZ/201 9 , A.Y.20 08 - 09 LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVI KUMAR, GUNTUR 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPE N COURT ON 12 TH MARCH, 2020. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 12 . 0 3 .20 20 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO : - 1. / THE ASSESSEE LATE DEVERASETTY VENKATA SUBBA RAO, LR D.RAVIKUMAR, 18 - 1 - 41, SATTENAPALLI, GUNTUR 2 . / THE REVENUE INCOME TAX OFFICER, WARD 1(3), GUNTUR 3. THE PR. COMMISSIONER OF INCOME TAX , GUNTUR 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM