ITO 19(2)-1, MUMBAI V. LATE SMT. ANJANA D. RANDERY L/H DIPAK RANDERY, MUMBAI

ITA 5946/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83842 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER I.T.A. NO.5946 /MUM/2011 (ASSESSMENT YEAR : 2006-07 ) INCOME TAX OFFICER- 19(2)1, ROOM NO.312, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-12. VS. LATE SMT. ANJANA D. RANDERY L/H DIPAK RANDERY FLAT NO.11, 6 TH FLOOR, PARIJAT APARTMENTS, 52, NORTH AVENUE SANTACRUZ (W) MUMBAI. PAN/GIR NO. AAIPR 2608 F (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI ASGHAR ZAIN V.P. ASSESSEE BY : NONE DATE OF HEARING : 09.09.2014 DATE OF PRONOUNCEMENT : 09.09.2014 O R D E R PER JOGINDER SINGH, JM : THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 30.6.2011 PASSED BY THE LD. FIRST APPELLATE AUTHORI TY ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT(A) ERRED IN CANCELLING THE ASSESSM ENT ORDER PASSED U/S. 143(3) OF THE ACT JUST BECAUSE THE ASSE SSMENT ITA NO.5946/M/11 AY: 06-07 2 ORDER AND THE DEMAND NOTICE WERE ISSUED IN THE NAME OF DECEASED PERSON IGNORING THE FACT THAT THE RETURN O F INCOME WAS FILED IN THE NAME OF THE ASSESSEE WITHOUT MENT IONING EITHER LATE OR LEGAL HEIR SHRI DEEPAK RANDERY AGAIN ST THE NAME OF THE ASSESSEE AND FURTHER ADMITTING ADDITION AL GROUND WITHOUT PROVIDING OPPORTUNITY TO THE AO AND THUS THERE IS VIOLATION OF RULE 46A OF THE I.T. RULES. 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SHRI ASGHAR ZAIN V.P., LD. DR WHEREAS NOBODY IS PRESENT FOR THE ASSESSEE. THE LD. DR DEFENDED THE CONCLUSION ARRIVE D AT IN THE ASSESSMENT ORDER AND REITERATED THE GROUNDS RAI SED BY THE DEPARTMENT. ON THE OTHER HAND NOTICE WAS ISSUED TO THE ASSESSEE. ANOTHER NOTICE WAS SENT TO THE ASSESSEE THROUGH DR STILL THE ASSESSEE/LEGAL HEIR NEITHER PRESENTED NOR MOVED ANY ADJOURNMENT PETITION, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND TEND TO DISPOSE OFF THE APPEAL ON THE BASIS OF MATERIAL AVA ILABLE ON RECORD. 3. WE HAVE CONSIDERED THE SUBMISSIONS PUT FORTH BY THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD . THE ITA NO.5946/M/11 AY: 06-07 3 FACTS IN BRIEF ARE THAT THE ASSESSEE DECLARED TOTAL INCOME OF RS.4,42,998/- IN HER RETURN FILED ON 27/7/2006 SHOW ING THE INCOME FROM SHORT TERM CAPITAL GAINS AND INCOME FROM OTHER SOURCES AMOUNTING TO RS.18,095/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER COMPUTER ASSISTED SCRUTINY SYSTEM (CASS) AND THUS NOTICE U/S . 143(2) OF THE ACT WAS SERVED UPON THE ASSESSEE TO W HICH THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME , EXPLAINED THE RETURN OF INCOME. OTHER DETAILS, AS R EQUIRED BY THE AO, WERE ALSO PLACED ON RECORD AS IS EVIDENT FROM PAGE-1 OF THE ASSESSMENT ORDER ITSELF. THE ASSESSEE DISCLOSED THE PROFIT EARNED ON SHARES FOR WHICH ELE CTRONIC DELIVERY WAS TAKEN AND THE PROFIT ARISING THERE FRO M WAS SHOWN UNDER THE HEAD CAPITAL GAINS. THE AO FOUND THAT THE ASSESSEE DECLARED SHORT TERM CAPITAL GAIN OF RS.4,24,903/- BUT DECLARED LONG TERM CAPITAL GAIN O N SHARES AMOUNTING TO RS.47,75,111/- WHICH WAS CLAIMED AS EXEMPT. THE AO ASKED THE ASSESSEE AS TO WHY THE CAP ITAL GAINS INCOME SHOULD NOT BE TREATED AS INCOME FROM BUSINESS OF SHARE TRADING. THE ASSESSEE VIDE REPLY DATED ITA NO.5946/M/11 AY: 06-07 4 12.12.2008 PREFERRED WRITTEN EXPLANATION WHICH IS REPRODUCED HEREUNDER :- 1. SHE USED HER OWN SURPLUS FUNDS FOR THE PURPOSE OF INVESTING IN SHARES. SHE HAS NOT RELIED ON BORROWED CAPITAL. 2. SHE INVESTED WITH A GOAL OF EARNING DIVIDEND AS WEL L AS CAPITAL APPRECIATION; 3. MOST OF THE SALES ARE LONG TERM IN NATURE; 4. THE VOLUME OF TRANSACTION SEEMS MORE ONLY BECAUSE THE ASSESSEE BUYS & SELLS HER INVESTMENT IN A STAGGERED MANNER AND NOT IN ONE SHOT, IN ORDER TO NEUTRALIZE FLUCTUATION IN THE SHARE PRICES; 5. SHE DOES NOT HAVE ANY SPECIALIZED KNOWLEDGE IN THE FIELD OF SHARE TRADING. 6. THE ASSESSEE HAS BEEN GRADUALLY INCREASING HER INVESTMENT IN SHARES. SHE LIQUIDATES HER HOLDING ON LY WHEN SHE NEEDS THE MONEY OR WHEN THERE IS DANGER OF LOSING THE AMOUNT INVESTED. SHE IS PURCHASING AN D STAYING INVESTED IN A FAR MORE NUMBER OF TIMES THAN HER SALES. THE LD. AO COMPUTED THE TOTAL INCOME AT RS.52,65,46 0/-. 3.1 THE AGGRIEVED ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD. CIT(A) AND WHO RECORDED A FACTUAL FI NDING AS CONTAINED IN PARA 3.2 OF THE IMPUGNED ORDER AND GRA NTED RELIEF TO THE ASSESSEE AND HELD THAT THE ASSESSMENT ORDER AS WELL AS DEMAND NOTICE ARE INVALID AS BOTH ARE IN TH E NAME OF DECEASED PERSON. THE REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. ITA NO.5946/M/11 AY: 06-07 5 3.2 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , CONCLUSION DRAWN IN THE IMPUGNED ORDER, FACTS AVAIL ABLE ON RECORD AND THE ASSERTION MADE BY THE LD. DR ARE KEP T IN JUXTAPOSITION AND ANALYSED WE FIND THAT THE ASSESSM ENT ORDER WAS PASSED IN THE NAME OF DECEASED PERSON WHE N THE ASSESSEE WAS NO LONGER ALIVE AND UNCONTROVERTEDLY T HIS FACT WAS BROUGHT TO THE NOTICE OF AO DURING ASSESSMENT PROCEEDINGS ITSELF. THE DEMAND NOTICE WAS ALSO ISSU ED IN THE NAME OF THE DECEASED, THEREFORE, WE ARE IN AGRE EMENT WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER THA T THE ENTIRE ASSESSMENT PROCEEDINGS ARE INVALID. WE ARE O F THE CONSIDERED OPINION WHEN NO NOTICE CAN BE SERVED UPO N A DEAD PERSON THE CONSEQUENT ASSESSMENT CANNOT BE SAI D TO BE VALID. THE POWER OF ATTORNEY FILED BY THE HUSBAN D OF THE ASSESSEE ON 15/2/2008 WHEREAS THE ASSESSMENT ORDER WAS PASSED ON 18/2/2008. THE LETTER OF THE APPELLANT/HU SBAND DATED 21/2/2008 HAS BEEN REPRODUCED IN THE IMPUGNED ORDER. THE ASSESSEE PASSED AWAY IN DECEMBER 2005. T HE DEMAND NOTICE WAS ISSUED IN THE NAME OF THE ASSESSE E (ALREADY EXPIRED) AND THE ASSESSMENT WAS FRAMED AGA IN IN THE NAME OF THE ASSESSEE. EVEN THE LD. AO HIMSELF ITA NO.5946/M/11 AY: 06-07 6 MENTIONS THE LETTER DATED 12/12/2008. THUS THE AO WAS NOT EXPECTED TO PASS THE ASSESSMENT ORDER ON A DEAD PERSON. OUR VIEW IS SUPPORTED BY THE DECISION IN ITO VS. SUNSHINE ELECTRICAL AND RADIO CO. (37 TTJ 378) (DEL .), ITO VS MARAMREDDY SULOCHANAMMA (79 ITR 1) (SC), ADDL ITO V MRS SUSHILA SADANANDAN & OTHERS (57 ITR 168) (SC), CHOOHARAMAL WADHURAM (DECEASED) VS CIT (80 ITR 360)(GUJ), CIT VS SMT. RAHIMA BI (107 ITR 810)(MAD. ), SHRI KRISHAN GOPAL, L/H OF LATE KISHORI LAL VS. ITO IN I TA NO.21/CHD.2008 FOR AY 2000-01(CHD. ITAT) ORDER DATE D 14.5.2008 (WHEREIN ONE OF US , JUDICIAL MEMBER IS SIGNATORY TO THE ORDER). IN ANOTHER DECISION FROM INDORE BENCH IN THE CASE OF LATE SMT. LAXMIBAI KARANPURIA (L/H SHRI RAJENDRA KARANPURIA) VS. ASTT. CIT ORDER DATED 16/3/2010 (WHEREIN ONE OF US, JUDICIAL MEMBER IS SIGNATORY TO THE ORDE R ) IDENTICAL VIEW WAS TAKEN HOLDING THAT NO ASSESSMEN T CAN BE FRAMED ON A DEAD PERSON, SUPPORTS OUT VIEW. OUR VIEW ALSO FINDS SUPPORT FROM THE RATIO LAID DOWN IN THE FOLLOWING CASES: 1. CIT VS. RAKESH KUMAR [2009] (313 ITR 305) (P & H ); 2. R.C. JAIN (DECD.) VS. CIT AND OTHERS (273 ITR 38 4) (DEL); ITA NO.5946/M/11 AY: 06-07 7 3. CIT VS. MOTI RAM (DECD.) [2009] 316 (ITR 321) (P & H); 4. CIT VS. PRABHAVATI GUPTA & OTHERS (231 ITR 188) (MP); 5. CIT VS. C.V. RAGHVA REDDY (148 ITR 385) (AP); IN VIEW OF THE FACTS AVAILABLE ON RECORD AND JUDICI AL PRONOUNCEMENTS AS DISCUSSED HEREIN ABOVE WE FIND TH AT THE ASSESSEE HAD ALREADY EXPIRED BEFORE ISSUANCE OF NOT ICE, THEREFORE, IT CAN BE CONCLUDED THAT SINCE NO NOTIC E CAN BE ISSUED/SERVED UPON A DEAD PERSON, THEREFORE, CONSEQ UENT ASSESSMENT CERTAINLY BECOMES INVALID, THEREFORE, WE ARE IN AGREEMENT WITH THE CONCLUSION DRAWN IN THE IMPUGNED ORDER THAT THE DEMAND NOTICE AS WELL AS THE ASSESSM ENT ORDER ARE INVALID AS THE SAME STANDS IN THE NAME OF A DECEASED PERSON, WHO DIED PRIOR TO ISSUANCE OF NOTI CE. 3.3 SO FAR AS NEXT GROUND REGARDING ADMISSION OF ADDITIONAL EVIDENCE IS CONCERNED, WE FIND NO MERIT IN THIS GROUND AND THERE IS NO VIOLATION OF RULE 46A OF INC OME TAX RULES. AS NOTHING WAS BROUGHT TO OUR NOTICE IN SUPP ORT OF THIS GROUND BY THE REVENUE, AS TO WHICH ADDITIONAL ITA NO.5946/M/11 AY: 06-07 8 EVIDENCES WERE ACCEPTED BY THE LD. CIT(A), THEREFOR E, THIS GROUND IS ALSO HAVING NO MERIT, CONSEQUENTLY, DISMI SSED. 4. FINALLY, THE APPEAL OF THE DEPARTMENT IS DISMISS ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 9 TH DAY OF SEPTEMBER, 2014 . SD/- ( RAJENDRA ) ACCOUNTANT MEMBER SD/- ( JOGINDER SINGH ) JUDICIAL MEMBER MUMBAI; DATED : 09/09/2014 JV. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (ASSTT. REGISTRAR) ITAT, MUMBAI