DINESH KUMAR SHARMA, AJMER V. CIT(APPEALS), JAIPUR

ITA 663/JPR/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2457 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-04-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 03-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL DHAKA
• Assessee Lawyers: MADHU GUPTA V.C
• Keywords: Search and seizure; Loose papers; Set aside
• Section: 132; 142(1); 250

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “ B-Bench” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o aJh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 663/JPR/2023 fu/kZkj.k o"kZ@Assessment Year : 2018-19 Sh. Dinesh Kumar Sharma (since deceased) Through Legal heir- Smt. Madhu Sharma 1386-32, Alwar Gate, Ajmer. cuke Vs. The CIT(Appeals) Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACKPS1876Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri Madhu Gupta (V.C.) jktLo dh vksjls@Revenue by: Shri Anil Dhaka (CIT) lquokbZ dh rkjh[k@Date of Hearing : 08/05/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 09/05/2024 vkns'k@ORDER PER: NARINDER KUMAR, J.M. Present appeal came to be presented in the year 2023, in the name of Sh. Dinesh Kumar Sharma, assessee, who was no more in this world, having died much earlier on 05.05.2021. The appeal was signed and verified by his widow Smt. Madhu Sharma. 2 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma Herein, challenge is to the order dated 20.09.2023 passed by Learned CIT(A), Jaipur-5. Vide impugned order, assessment order framed 30.9.2021 as regards the addition due to unexplained income of Rs.50,000/-has been upheld. Shri Dinesh Kumar Sharma died during pendency of the assessment proceedings. Even then, the assessment order was passed against him, without arraying his legal heir(s). Pertinent to note that even before Learned CIT(A), legal heirs of Dinesh Kumar Sharma were not added to the Pan Database portal and only in the head note of the impugned order, title of the appeal representing the appellant was shown as Dinesh Kumar Sharma through legal heir Smt. Madhu Sharma. 2. On 23.04.2024, when the appeal was taken up for hearing, the above said facts regarding departure of the assessee, Shri Dinesh Kumar Sharma came to notice of the Appellate Tribunal. As such, we raised certain queries about date of death of the assessee and steps, if any, taken to bring on record his legal heirs. It was thereupon Smt. Madhu Gupta, Authorized Representative sought adjournment to bring on record legal heir of the assessee. That is how, on 30.04.2024 an application came to be filed placing on record 3 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma revised Form 36, accompanied by certificate of death of Shri Dinesh Kumar Sharma, sworn affidavit of his widow Smt. Madhu Sharma, and copy of a report . In the affidavit sworn on 23.04.2024, Smt. Madhu Sharma has testified that her husband died on 05.05.2021, and further that she is the only legal heir of her husband. The affidavit is supported by copy of death certificate issued on 16.07.2021, certifying factum of death of her husband on 05.05.2021. Nothing to the contrary has been submitted on behalf of the Department. 3. Rules require filing of an application before the Registry to bring on record legal heirs in an appeal. No such application has been filed. It should have been filed. Registry should have pointed out said deficiency to the concerned party. But, even the Registry did not issue any deficiency note for removal of the deficiency. In the given situation, we proceed to decide the issue relating to bringing on record of legal heirs on record, considering the submissions put forth before us, and the material made available. 4 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma 4. In view of the sworn affidavit of Smt. Madhu Sharma that she is only legal heir of her husband Sh. Dinesh Kumar Sharma, and there being no dispute about factum of death of the assessee, oral prayer made to bring on record the only legal heir deserves to be allowed, and the revised Form 36 taken on record. We order accordingly. Requisite entry be made in the relevant record. 5. Arguments heard. File perused. 6. As noticed above, Sh. Dinesh Kumar Sharma, assessee died on 05.05.2021. Said fact has never been disputed by the Department. In para- 3 of the assessment order on 30.09.2021, Learned Assessing Officer specifically mentioned that upon due service of notice u/s 153-A of the Income Tax Act (hereinafter referred to as “the Act”), Sh. Madhu Sharma wife and legal heirs by Late Sh. Dinesh Kumar Sharma, vide application dated 21.09.2021 submitted before him certificate of death of her husband. In addition thereto, she also submitted there computation of total income. In that application, it was alleged that when legal heir was being arrayed, number of requests were put forward on the portal in this regard, but said request to bring on record legal heir was never entertained, and that is how, she had no option but to file return u/s 153-A of the Act in physical form by way of copy of computation. Accordingly, by said 5 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma application, it was requested that the return filed in response to the said notice be accepted. In paragraph No. 3 of the assessment order, Learned Assessing Officer mentioned that a notice u/s 142(1) of the Act, and one query letter were issued prior thereto i.e. on 27.08.2021 and 18.09.2021. However, there is no mention in the assessment order as to what query was raised. The fact remains that Learned Assessing Officer proceeded to pass assessment order dated 30.09.2021 against a dead person i.e. Sh. Dinesh Kumar Sharma, he having died on 5.5.2021. 7. Form 35 submitted before ld. CIT(A) would reveal that as against the column meant for the name of entity, name of Sh. Dinesh Kumar Sharma was recorded as the appellant. Said appeal also appears to have been verified in the name of Sh. Dinesh Kumar Sharma, when Sh. Dinesh Kumar Sharma had already died on 05.05.2021. In the given situation, it remains unexplained as to how the appeal, in Form 35 was entertained by the office of the Learned CIT(A) and as to why the same was admitted for disposal. It is not that factum of death of Sh. Dinesh Kumar Sharma was not within the knowledge of the office of ld. CIT(A) or the ld. CIT(A). In the first para of the impugned order passed u/s 250 of the Act, ld. CIT(A) 6 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma specifically mentioned that the assessee had died on 05.05.2021, and that the assessment order was passed in the name of the assessee due to technical glitches. He also mentioned that as recorded in para 3 of the assessment order, name of the legal hairs could not be added despite several efforts. Even if, there was any technical glitch, steps were to be taken by the office of ld. CIT(A), to get the appeal filed in Form 35, duly verified by getting the same revised, as it was purported to have been filed and verified in the name of a dead person. 8. In view of the above discussion, it can safely be said that the assessment having been passed against a dead person, is invalid. Furthermore, the appeal before ld. CIT(A) with verification in the name of a dead person was not at all maintainable in the given form. 9. Learned AR for the assessee has submitted that the assessment order in the impugned assessee deserves to be set aside on certain other grounds, firstly, that the document in question i.e. B-2, Exhibit-01, page12 dated 12.02.2020 is said to have been recovered at the time of search u/s 132 of the Act, at the “residence of the assessee” ; secondly, that from a perusal of the document it cannot be said with certainty that a sum of Rs. 50,000/- was either “paid” or “received” ; thirdly, that the other figure of Rs. 7 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma 2,00,000/- mentioned in the said document B-2 was verified from the books of accounts of M/s Bhagwati Machine Tools, Ajmer, and in view of said verification of the figure of Rs. 2,00,000/-mentioned therein, there was no justification for the Assessing Officer to have attributed the second sum of Rs.50,000/- to the assessee individually instead of attributing the same to M/s Bhagwati Machine Tolls, Ajmer, one of whose partners Dinesh Kumar Sharma was. Another submission put forth by Learned AR for the assessee is that in the assessment year 2019-20, benefit by way of set off was granted to M/s Bhagwati Machine Tools, Ajmer on surrender of Rs. 10,00,000/- as regards the income of the said firm assessed on the basis of loose papers said to have been seized at the time of search u/s 132 of the Act from the business premises of the firm, but, still the Assessing Officer held Dinesh Kumar Sharma responsible for tax liability on the ground that he had failed to explain said amount of Rs.50,000/-mentioned in the next entry. 10. On the other hand, ld. DR for the Department has submitted that the document, B-2, Exhibit-01, page 1 referred to above was recovered from the residence of the assessee, and not from the business premises of M/s Bhagwati Machine Tools, Ajmer, and as such, the Assessing Officer was 8 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma justified in framing assessment in respect of the said amount of Rs. 50,000/- which the assessee individually failed to explain. 11. As is available from the impugned order passed by ld. CIT(A), before him, on behalf of the assessee its ld. AR had claimed that Sh. Dinesh Kumar Sharma (since deceased) was proprietor of M/s Shree Bhagwati Electric, and also a partner of M/s Bhagwati Machine Tools, M/s Bhagwati Machine Works, and M/s Bhagwati EI-Mech. The ld. CIT(A), while referring to the above said documents B-2, Exhibit-01, page 1, observed as under:- “ 1. Rs. 2,00,000- the appellant had proved during assessment that Rs. 2,00,000 is cheque given on 26.03.2018 to M/s S. Steel Trading Company ( C. No. 189754 of IDBI Bank A/C No. 17888 of M/s Bhagwati Machine Tools, Ajmer). The same is treated as explained. 2. Rs. 50,000- The appellant had transaction of Rs. 50,000 with the same party but he could not get verified from regular Books. The AO had made addition of Rs. 50,000/- u/s 69 of the Act.” 12. Even if the abovesaid document is stated to have been seized from the premises of the assessee and not from the business premises of the partnership firm i.e. M/s Bhagwati Machine Tools Ajmer, it was for the 9 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma department to establish that the second entry of Rs. 50,000/-, written on the said document, B-2, Exhibit-01, page-1 pertained to the assessee. So far as, non explanation on behalf of the assessee is concerned, as noticed above, the assessee died on 05.05.2021, had he been alive during the assessment proceeding, he might have been able to discharge the said onus. Even if at the time of search and seizure, the assessee could not explain the said transaction of Rs. 50,000/-, it was for the Assessing Officer give reasons to satisfy that said amount was regarding certain payment made to or receipt by the assessee. In absence of any such satisfaction recorded in the assessment order, the assessment order could not be sustained. 13. In the impugned order, the ld. CIT(A) referred the claim on behalf of the assessee that M/s Bhagwati Machine Tools, Ajmer had surrendered a sum of Rs. 10,00,000/- to income on the basis of what was found recorded in the loose papers, which pertained to M/s Bhagwati Machine Tools Ajmer, and that set off was allowed as regards the Assessment Year 2019-20. Learned CIT(A) did not grant any benefit to the assessee as regards the abovesaid figure of Rs.50,000/-mentioned in the document, observing that benefit of surrender of Rs. 10,00,000/- had been given while passing order for the assessment year 2019-20. 10 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma It remains unexplained as to what was the basis for the Learned CIT(A) to attribute the said income to the assessee, when the other income on the same document pertained to M/s Bhagwati Machine Tools, Ajmer, the firm, of which Dinesh Kumar Sharma was a partner. In the given situation, it can safely be said that simply from the document B.2, without any detailed enquiry, Assessing Officer fell in error in arriving at the conclusion that said amount of Rs.50,000/-was not explained by the assessee in ‘individual capacity’. Result 14. In view of the discussion and for the reasons recorded above, the impugned order passed by the Ld. CIT(A) as well as the assessment order passed by Ld. Assessing Officer deserve to be set aside. Consequently, while allowing this appeal, both the abovesaid orders are hereby set aside. Order pronounced in the open court on 09/05/2024. Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼ujsUnz dqekj½ (RATHOD KAMLESH JAYANTBHAI) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 09/05/2024 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 11 ITA No. 663/JPR/2023 Sh. Dinesh Kumar Sharma L/H Madhu Sharma 1. The Appellant- Sh. Dinesh Kumar Sharma L/h Madhu Sharma, Ajmer. 2. izR;FkhZ@ The Respondent- CIT(A), Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File ITA No. 663/JPR/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar