Shri Kartik Maharishi, Ambala City V. ACIT, Ambala

ITA 673/CHANDI/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8307 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 06-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Invalid notice; Principle of natural justice; Period of limitation; Assessment record; Reassessment proceedings; Set aside; Capital Gains
• 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; 143(3); 92; 133A; 2(22)(e); 143(1); 292BB; 143(2); 158BC; 113; 48; 73(1); 73; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 672 & 673/CHD/2015 A.Y: 2008-09 & 2009-10 SHRI KARTIK MAHARISHI, VS THE ACIT, L/H OF LATE SHRI RAJNI KANT, AMBALA. PROP. : M/S B.KARTIK & CO., D.S.C. ROAD, AMBALA CITY. PAN: ADPPK5520R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SIN GH RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 08.02.2017 DATE OF PRONOUNCEMENT : 17.02.2017 O R D E R BOTH APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF LD. CIT(APPEALS) PANCHK ULA DATED 22.05.2015 FOR ASSESSMENT YEARS 2008-09 AND 2009-10. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUES ARE SAME IN BOTH THE APPEALS, HOWEVER, THE PARTIES HAVE ARGUED IN ASSESSMENT YEAR 2008-09 AND PRAYED THAT ORDER IN THAT CASE MAY BE FOLLOWED IN ASSESSMENT YE AR 2009-10. 2 ASSESSMENT YEAR : 2008-09 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1 OF APPEAL OF THE ASSESSEE. SAME IS, ACCORDINGLY, DISMISSED AS NOT PRESSED. 4. GROUND NOS. 2 AND 3 READ AS UNDER : 2. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S FURTHER ERRED IN UPHOLDING THE FRAMING OF ASSESSMENT IN THE HANDS OF THE DECEASED ASSESSEE AND NOT IN THE HANDS OF THE LEGAL HEIRS WH ICH IS ILLEGAL, ARBITRARY AND HENCE UNJUSTIFIED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONE R OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 15,30,000/- MADE ON THE BASIS OF A DIARY WHICH IS NO MORE THAN A DUMB DOCUMENT WHICH IS ARBITRARY AND UNJUSTIFIED. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE SHRI RAJNI KANT, PROPRIETOR M/S B.KARTIK & CO., AMBALA F ILED ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEAR 2008- 09 ON 16.09.2008 DECLARING INCOME OF RS. 5,06,770/- AFTER CLAIMING DEDUCTION OF RS. 97,027/- UNDER CHAPTER VI -A OF THE ACT. THE SAID RETURN WAS PROCESSED UNDER SECTI ON 143(1) OF THE ACT ON 24.11.2009. THE SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMI SES OF M/S MAHARISHI INBA SAREES, AMBALA CITY ON 26.11.201 0. DURING THE COURSE OF SURVEY, ONE DIARY MARKED AS B- 16 WAS FOUND FROM THE BUSINESS PREMISES OF THE ABOVE FIRM AND IMPOUNDED. THIS DIARY REVEALED THAT SHRI RAJNI KAN T, PROPRIETOR OF M/S KARTIK & CO., AMBALA CITY AND PAR TNER M/S MAHARISHI INBA SAREES, AMBALA CITY HAS MADE CAS H DEPOSITS OF RS. 15,30,000/- DURING FINANCIAL YEAR 2 007-08 3 OUT OF UNDISCLOSED INCOME. ON GOING THROUGH THE ASSESSMENT RECORD OF SHRI RAJNI KANT FOR ASSESSMENT YEAR UNDER APPEAL, IT WAS REVEALED THAT ASSESSEE HAS NOT SHOWN INCOME OF RS. 15,30,000/- IN THE RETURN OF INCOME. THE ASSESSING OFFICER, THEREFORE, ISSUED NOTICE UNDER S ECTION 148 OF THE ACT ON 12.01.2011. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 12.09.2011 BY THE ASSESSIN G OFFICER. THE COUNSEL FOR ASSESSEE ATTENDED THE ASS ESSMENT PROCEEDINGS TIME TO TIME AND PRODUCED BOOKS OF ACCO UNT AND OTHER DETAILS. THE ASSESSING OFFICER NOTED THA T SINCE DURING THE COURSE OF SURVEY, DIARY MARKED B-16 WAS IMPOUNDED WHICH REVEALED THAT ON LEFT SIDE OF PAGE NO. 39, A FIGURE I.E. 15300 AGAINST BKC ON 31.03.2008 HAS B EEN WRITTEN. ON FURTHER PERUSAL OF THE DIARY ON THE LE FT SIDE OF PAGE NO. 17, A FIGURE OF 1185 AGAINST BKC HAS BEEN WRITTEN AND NARRATED AS CHEQUE 13500 + 90000 + 1500 0 I.E. EQUAL TO 1,18,500. THEREFORE IT WAS FOUND THA T IT WAS REGULAR PRACTICE OF THE WRITER OF THE DIARY OMITTIN G LAST TWO DIGITS OF THE FIGURE WHILE WRITING THE DIARY I. E. RS. 1,18,500/- HAD BEEN CODED AS 1185. KEEPING IN VIEW THE CODING PATTERN OF THE WRITER, SUMMONS UNDER SECTION 131 OF THE ACT WERE ISSUED TO SHRI SACHIDA NAND, PARTNE R M/S MAHARISHI INBA SAREES, AMBALA ( BROTHER OF THE ASSE SSEE ) AND SHRI KARTIK MAHARISHI S/O LATE SHRI RAJNI KANT, PROPRIETOR OF THE FIRM UNDER CONSIDERATION FOR 23.12.2011. ON 23.12.2011, STATEMENT ON OATH OF SHRI KARTIK MAHARISHI SON OF THE ASSESSEE AND SHRI SACH IDA 4 NAND, BROTHER OF THE ASSESSEE WERE RECORDED. THEY WERE SHOWN IMPOUNDED DIARY TO WHICH THEY HAVE REPLIED TH AT THE DIARY IS WRITTEN BY SHRI RAJNI KANT, ASSESSEE A ND THEY DO NOT KNOW ANYTHING ABOUT THE CONTENTS OF THE DIAR Y. EVEN SHRI SACHIDA NAND EXPLAINED THAT THIS DIARY IS WRITTEN BY HIS LATE BROTHER SHRI RAJNI KANT AND HE DOES NOT KNOW ANYTHING ABOUT IT. THE ASSESSING OFFICER, THEREFORE, NOTED THAT THE LEGAL HEIRS SHRI KARTIK MAHARISHI AND BROTHER OF THE DECEASED WERE SHOWN TH E CODING OF THE DIARY BUT THE LEGAL HEIRS OF THE ASSE SSEE HAVE NOTHING TO SAY IN THIS REGARD. THEREFORE, ASS ESSING OFFICER TREATED THE FIGURE OF 15300 AS RS. 15,30,00 0/- AND MADE ADDITION ACCORDINGLY. ASSESSMENT ORDER UND ER SECTION 143(3)/148 WAS PASSED ON 26.12.2011. IT MAY BE NOTED HERE THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER IN THE NAME OF THE ASSESSEE AS SH RI RAJNI KANT, PROPRIETOR M/S B. KARTIK & CO.. 5(I) THE L/H OF ASSESSEE CHALLENGED THE ASSESSMEN T ORDER BEFORE LD. CIT(APPEALS). IT WAS SUBMITTED TH AT ASSESSMENT ORDER IS PASSED IN THE NAME OF DECEASED ASSESSEE. IT WAS SUBMITTED THAT ASSESSEE DIED ON 20.02.2011 WHICH IS APPARENT FROM THE ASSESSMENT RECORD. DEATH OF THE ASSESSEE WAS WITHIN THE KNOWL EDGE OF THE ASSESSING OFFICER THEREFORE, NOTICES TO BE I SSUED IN THE NAMES OF LEGAL HEIRS INSTEAD OF DECEASED ASSESS EE. THE ASSESSMENT ORDER IS ALSO REQUIRED TO BE PASSED IN THE NAME OF LEGAL HEIRS NOT IN THE NAME OF DECEASED ASS ESSEE 5 SHRI RAJNI KANT. THE ASSESSING OFFICER IN THE R EMAND REPORT SUBMITTED BEFORE LD. CIT(APPEALS) THAT AR OF LEGAL HEIRS OF THE DECEASED APPEARED THROUGH AUTHORIZED REPRESENTATIVES THEREFORE, ISSUES COVERED UNDER SEC TION 292B OF THE ACT. 6. THE LD. CIT(APPEALS) GOING THROUGH THAT SUBMISSI ONS OF BOTH PARTIES, HELD THAT THE AUTHORIZED REPRESENT ATIVES OF LEGAL HEIRS ATTENDED THE ASSESSMENT PROCEEDINGS AND AT NO STAGE THE AUTHORIZED REPRESENTATIVES OF ANY O F THE LEGAL HEIRS INFORMED ASSESSING OFFICER THAT SHRI RA JNI KANT, ASSESSEE HAD EXPIRED. THE FACT ABOUT DEATH O F SHRI RAJNI KANT ON 20.02.2011 IS AVAILABLE ON RECORD AT THE TIME OF STATEMENTS RECORDED ON 23.12.2011 IN THE STATEMENT OF SON OF THE DECEASED ASSESSEE AND BROTH ER OF THE DECEASED ASSESSEE WHO HAVE NOT OBJECTED TO PROCEEDINGS CONTINUED AND ASSESSMENT WAS UNDER TIME LIMITATION. THE LD. CIT(APPEALS), THEREFORE, NOTED THAT SINCE LEGAL HEIRS APPEARED BEFORE ASSESSING OFFICER , THEREFORE, THERE IS NO ILLEGALITY IN PASSING ASSESS MENT ORDER AND REJECTED CONTENTION OF THE ASSESSEE. THE LD. CIT(APPEALS) ALSO CONFIRMED THE ADDITION ON MERIT. 7. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW THE ASSESSMENT ORDER IS LIABLE TO BE QUASHED AS BEI NG PASSED AGAINST THE DEAD PERSON AND ADDITION ON MERI T IS ALSO WHOLLY UNJUSTIFIED. THE FACTS NOTED ABOVE ARE NOT IN DISPUTE. THE DIVISION BENCH OF ITAT CHANDIGARH BEN CH IN THE CASE OF SHRI YOGINDER SINGH THROUGH LEGAL HE IR OF 6 SHRI VIRENDER SINGH VS ACIT IN ITA 373/CHD/2015 VID E ORDER DATED 21.12.2016 CONSIDERED IDENTICAL ISSUE A ND HELD, THAT NO VALID RE-ASSESSMENT ORDER HAVE BEEN PASSED BEING IT IS PASSED IN THE NAME OF DEAD PERSO N. THE SUBMISSIONS OF THE PARTIES AND FINDINGS OF THE TRIBUNAL IN PARAS 6 TO 19 ARE REPRODUCED AS UNDER : 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED T HE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS REFERRED TO PB-10 WHICH IS DEATH CERTIFICATE OF THE ASSESSEE PROVING THAT ASSESSEE EXPIRED ON 08.04.2008. PB-13 IS COPY OF THE NOTICE UNDER SECTI ON 148 DATED 25.03.2013 IN THE NAME OF SHRI YOGINDER SINGH ( THROUGH LEGAL HEIRS) WHICH WAS RETURNED TO THE ASSESSING OFFICER WITH THE REMARKS THAT THE ADDRESS EE HAD ALREADY EXPIRED 6-7 YEARS BACK. COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 UNDER SECTION 143(3) DATED 30.12.2009 HAVE BEEN FILED AT PAGE B-2 OF THE PAPER BOOK WHICH IS IN THE NAME OF LEGAL HEIRS OF LATE SHRI YOGINDER SINGH IN WHICH TH E ASSESSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAD DIED DURING THE PENDENCY OF ASSESSMENT PROCEEDINGS AND AFTER INQUIRIES, THE LEGAL HEIR OF DECEASED SHRI YOGINDER SINGH WERE BROUGHT ON RECORD NAMELY SMT. SUMITRA DEVI, WIFE, SHRI VIRENDER SINGH , SON, SHRI NARESH SINGH, SON, SHRI PRADEEP SINGH, SO N AND SMT. SUSHMA DEVI, DAUGHTER. THE LD. COUNSEL FO R THE ASSESSEE, THEREFORE, SUBMITTED THAT ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 25.03.2013, ASSESSING OFFICER WAS AWARE OF THE FACT THAT ASSESSEE HAD ALREADY EXPIRED ON 08.04.2008 AND HIS LEGAL HEIRS WERE ALREADY ON RECORD. THEREFORE, ASSESSING OFFICER SHOULD NOT HAVE PROCEEDED AGAINST DEAD PERSON AND SHOULD NOT HAVE ISSUED NOTICE UNDER SECTION 148 OF THE ACT IN THE NAME OF DEAD ASSESSEE 7 BECAUSE NO NAME OF LEGAL HEIRS HAVE BEEN MENTIONED IN THE NOTICE UNDER SECTION 148. 6(I) PB-9 IS REPLY OF THE LEGAL HEIRS OF THE ASSESSEE BEFORE ASSESSING OFFICER DATED 24.02.2016 IN WHICH ALSO IT WAS INTIMATED TO THE ASSESSING OFFICE R THAT SHRI YOGINDER SINGH HAD ALREADY EXPIRED ON 08.04.2008. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT NOTICE UNDER SECTION 148 ISSUED AGAINST DEAD PERSON IS INVALID AND WAS NEVER SERVED UPON THE DEAD PERSON OR UPON LEGAL HEIRS OF THE ASSESSEE. THERE IS NO QUESTION OF REFUSAL BY THE L EGAL HEIRS BECAUSE NO NAME OF LEGAL HEIRS HAVE BEEN MENTIONED IN THE NOTICE UNDER SECTION 148 OF THE AC T. NO PROPER OPPORTUNITY HAVE BEEN GIVEN TO THE LEGAL HEIRS OF THE ASSESSEE AND THERE IS NO SERVICE OF TH E NOTICE UNDER SECTION 148. THE ASSESSMENT ORDER IS PASSED IN THE NAME OF DEAD PERSON, THEREFORE, ASSESSMENT ORDER IS INVALID AND NULLITY. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SERVICE OF VALID NOTICE UNDER SECTION 148 IS ESSENTIAL TO MAKE RE- ASSESSMENT. IN THIS CASE, NO NOTICE UNDER SECTION 148 OF THE ACT HAVE BEEN SERVED UPON ASSESSEE OR THE LE GAL HEIRS THEREFORE, IT IS INVALID. THUS, THE VALID SER VICE OF THE NOTICE ON ASSESSEE STRICTLY IN TERMS OF SECTION 148 READ WITH SECTION 282(1) OF THE ACT IS A JURISDICTI ONAL REQUIREMENT. HE HAS, FURTHER SUBMITTED THAT IT WAS A PRESUMPTION OF THE ASSESSING OFFICER/CIT(A) ABOUT SERVICE OF THE NOTICE WHICH IS WHOLLY ERRONEOUS AND ILLEGAL. THE ONUS IS UPON REVENUE TO PROVE THAT ASSESSEE OR THE LEGAL HEIRS HAVE BEEN SERVED THE NOTICE UNDER SECTION 148 OF THE ACT. IN THE PRESEN T CASE, NOTICE UNDER SECTION 148 AND ALL SUBSEQUENT NOTICES UNDER SECTION 148(2) WERE ADDRESSED TO THE DECEASED ASSESSEE SHRI YOGINDER SINGH ( THROUGH LEG AL HEIRS) WHICH PHRASE CANNOT ALTER THE FACT THAT THEY 8 WERE ADDRESSED TO THE DECEASED ASSESSEE, WHO EXPIRED LONG BACK. THE ASSESSING OFFICER WAS AWARE FROM THE RECORD THAT ASSESSEE SHRI YOGINDER SINGH W AS NOT LIVING, THEREFORE HIS LEGAL HEIRS WERE TO BE BR OUGHT ON RECORD WHO HAVE ALREADY BEEN BROUGHT ON RECORD I N ASSESSMENT YEAR 2007-08. THEREFORE, ALL THE NOTIC ES INCLUDING NOTICE UNDER SECTION 148 HAVE BEEN SENT T O THE DEAD PERSON, THEREFORE, NOTICE UNDER SECTION 14 8 OF THE ACT UPON A DEAD PERSON IS INVALID. 6(II) THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT NO VALID ASSESSMENT CAN BE MADE ON A DEAD PERSON. ONCE THE ASSESSEE WAS DEAD, NO VALID ASSESSMENT CAN BE MADE UPON HIM UNLESS PROCEEDINGS ARE INITIATED AGAINST ALL THE REPRESENTATIVES ( LE GAL HEIRS OF THE ASSESSEE). SECTION 159 ALSO REQUIRES THAT ASSESSING OFFICER SHOULD IMPLEAD ALL THE LEGAL HEIR S AFTER THE DEATH OF THE ASSESSEE FOR CARRYING OUT FU RTHER PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE RELI ED UPON FOLLOWING DECISIONS: I) DECISION OF MADRAS HIGH COURT IN THE CASE OF CIT V M. HEMANATHAN 68 TAXMAN.COM.22 IN WHICH IT WAS HELD THAT, WHERE NOTICE ISSUED IN NAME OF DECEASED-ASSESSEE WAS SERVED UPON LEGAL HEIR, WHO, THEN, PARTICIPATED IN PROCEEDINGS, SUCH PROCEEDINGS WAS A NULLITY BEING INITIATED AGAINST A DEAD PERSON . II) DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT V SHITAL PRASAD KHARAG PRASAD 147 TAXMAN 441 IN WHICH IT WAS HELD THAT NOTICE UNDER SECTION 148 IS A JURISDICTIONAL NOTICE AND IS NOT CURABLE UNDER SECT ION 292B IF IT WAS NOT SERVED ACCORDING TO PROVISIONS O F THE ACT IT WAS ALSO HELD THAT IT IS SETTLED LAW TH AT SERVING OF VALID NOTICE UNDER SECTION 148 IS THE 9 FOUNDATION FOR INITIATION OF RE-ASSESSMENT PROCEEDI NGS AND A CONDITION PRECEDENT FOR VALIDITY OF NOTICE. III) ORDER OF ITAT AGRA BENCH (TM) IN THE CASE OF ITO V SIKANDER LAL JAIN 45 SOT 113 IN WHICH IT W AS HELD THAT NOTICE ISSUED IN THE NAME OF A DEAD PER SON WAS INVALID. IT WAS ALSO HELD THAT ASSESSMENT OR DER PASSED, IN VIEW OF THE ISSUE OF NOTICE ON DEAD PERS ON WAS VOID AND COMMISSIONER (APPEALS) WAS CORRECT IN LAW AND IN THE FACTS OF THE INSTANT CASE HOLDING TH E ASSESSMENT ORDER AS VOID. IV) ORDER OF ITAT BOMBAY BENCH IN THE CASE OF MRS. JERBANOO N. WADIA VS ACIT 36 ITD 185 IN WHICH IT WA S HELD THAT RE-ASSESSMENT NOTICE ISSUED IN THE NAME OF THE ASSESSEE AFTER HIS DEATH IS ILLEGAL AND VOID. V) DECISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF SHEIKH ABDUL KADAR V ITO 34 ITR 451 IN WHIC H IT WAS HELD THAT THE NOTICES AND ALL THE COMMUNICATIONS WERE ADDRESSED TO S WHO ADMITTEDLY WAS DEAD AT THAT TIME AND HAD BEEN SO DEAD FOR A LO NG TIME. ITO KNEW FROM RECORDS OF HIS OWN OFFICE THAT S WAS NOT LIVING AND HE ALSO KNEW WHO HIS LEGAL REPRESENTATIVES WERE BECAUSE THE LEGAL REPRESENTATI VES HAD BEEN ASSESSED IN SUBSEQUENT YEARS TAKING INTO ACCOUNT THE ASSETS OF DECEASED S. IN THESE CIRCUMSTANCES, IT WAS INCUMBENT UPON THE ITO TO CAU SE THE NOTICE TO BE ISSUED TO LEGAL REPRESENTATIVES OF S. SINCE ALL NOTICES WERE ISSUED IN THE NAME OF DEAD PERSON, THEREFORE, ITO WAS PROHIBITED FROM MAKING ASSESSMENT ON THE STRENGTH OF THE NOTICE WHICH HE H AD ISSUED. PETITION WAS, THEREFORE, ALLOWED. VI) DECISION OF DELHI HIGH COURT IN THE CASE OF VIPIN WALIA V ITO 67 TAXMAN.COM 56 IN WHICH IT WAS HELD, WHERE DEPARTMENT INTENDED TO PROCEED UNDER SECTION 147 AGAINST ASSESSEE WHEN HE WAS ALREADY 10 DEAD, IT COULD HAVE BEEN DONE SO BY ISSUING A NOTIC E TO LEGAL REPRESENTATIVE OF ASSESSEE WITHIN PERIOD OF LIMITATION FOR ISSUANCE OF NOTICE. VII) DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF LAL CHAND AGGARWAL V CIT, AGRA 68 TAXMAN.COM 102 IN WHICH IT WAS HELD THAT WHERE NOTICES ISSUED TO ASSESSEE FOR RE-ASSESSMENT FOR BO GUS SALE OF SHARES WERE INVALID, RE-ASSESSMENT WAS NOT JUSTIFIED. 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE LD. CIT(APPEALS) RELIED UPON ORD ER OF ITAT AGRA BENCH IN THE CASE OF ITO VS LAL CHAND AGGARWAL 18 TAXMAN.COM 125 IN SUPPORT OF HIS FINDINGS WHICH HAVE BEEN OVERRULED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE ABOVE CASE OF LAL CHAND AGGARWAL VS CIT (SUPRA). THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, THEREFORE SUBMITTED THAT ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT AGAINST DEAD PERSON AND PASSING OF THE ASSESSMENT ORDER IN THE NAME OF DEAD PERSON IS INVALID AND VOID, SAME MAY B E SET ASIDE AND QUASHED. 8. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSING OFFICER REOPENED THE ASSESSMENT ON THE BASIS OF FINDINGS GIVEN IN ASSESSMENT YEAR 2007-08. THE LRS OF THE ASSESSEE WERE AWARE OF THE FACT AND TAXABILI TY OF THE INTEREST AND ENHANCEMENT OF COMPENSATION. NOTICES WERE ISSUED UNDER SECTION 148 AND 143(2) ET C. THROUGH LEGAL HEIRS WHICH HAVE BEEN REFUSED TO ACCE PT BY THE LEGAL HEIRS. REFUSAL WOULD AMOUNT TO ACCEPTANCE OF THE NOTICE AS PER LAW. HE HAS SUBMIT TED THAT IF NAME OF LRS ARE NOT MENTIONED IN THE ASSESSMENT ORDER, IT IS ONLY IRREGULARITY AND RELIE D UPON DECISION OF HON'BLE SUPREME COURT IN THE CASE OF 11 CIT V JAI PARKASH SINGH 219 ITR 737 IN WHICH IT WAS HELD THAT, NON SERVICE OF NOTICE UNDER SECTION 143 (2) AGAINST 9 OUT OF 10 LEGAL REPRESENTATIVES OF THE DECEASED, DID NOT INVALIDATE THE ASSESSMENT ORDER O F THE ASSESSING OFFICER AND THAT AT THE BEST IT WAS A N IRREGULARITY. LD. DR ALSO RELIED UPON DECISION OF THE GUJRAT HIGH COURT IN THE CASE OF ATULBHAI HIRALAL S HAH VS DCIT 73 TAXMAN.COM 320 (GUJRAT) IN WHICH IT WAS HELD AS UNDER : WHERE ASSESSING OFFICER HAD REOPENED ASSESSMENT OF ASSESSEE AND SENT NOTICE TO HIM THROUGH POSTAL DEPA RTMENT AT ADDRESS CONTAINED IN HIS PAN CARD, WHICH WAS RETURN ED BACK WITH REMARK 'LEFT AND ASSESSEE CHALLENGED REOPENIN G OF ASSESSMENT CONTENDING THAT REMARK 'LEFT' WAS TOTALLY I NCORRECT, SINCE ASSESSEE HAD NOT JOINED POSTAL DEPARTMENT TO QUESTION WHY REMARK 'LEFT' WAS MADE, ONLY ON GROUND OF NON SER VICE OF NOTICE, REASSESSMENT PROCEEDINGS COULD NOT BE TERMINATED WHICH HAVE BEEN CONFIRMED BY HON'BLE SUPREME COURT IN THE CASE OF ATULBHAI HIRALALSHAH VS DCIT 73 TAXMAN.COM 325. 9. THE LD. DR ALSO RELIED UPON DECISION OF MADRAS HIGH COURT IN THE CASE OF AREVA T&D INDIA LTD. 165 TAXMAN 123 IN WHICH IT WAS HELD THAT WHERE RE- ASSESSMENT ORDER WAS PASSED BY ASSESSING OFFICER WITHOUT CONSIDERING OBJECTIONS OF THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 148 AND WITHOUT GIVING STATUTORY NOTICE UNDER SECTION 143(2), IT AMOUNTED TO NOTHING BUT PROCEDURAL IRREGULARITIES A ND HENCE, SAME WOULD NOT MAKE RE-ASSESSMENT A NULLITY IN LAW. THE LD. DR ALSO RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF V.R.A. COTTON MILLS (P) LTD. V UOI CWP NO. 18193 OF 2011 DATED 27.09.2011 IN WHICH THE ISSUE OF SERVICE OF NOTICE UNDER SECTION 143(2) WAS CONSIDERED AND IT W AS 12 HELD THAT, THE EXPRESSION SERVE MEANS THE DATE O F ISSUE OF NOTICE. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. I T IS NOT IN DISPUTE THAT ASSESSEE HAD EXPIRED ON 08.04.2008, COPY OF THE DEATH CERTIFICATE IS ALSO PLACED ON RECORD. IT IS ALSO ADMITTED FACT THAT RE ASONS FOR RE-OPENING OF THE ASSESSMENT IN ASSESSMENT YEAR UNDER APPEAL 2006-07 WERE RECORDED ON THE BASIS OF ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2007-08 UNDER SECTION 143(3) MAKING ADDITION ON ACCOUNT OF CAPITAL GAINS ON ACCOUNT OF INTEREST ON ENHANCED COMPENSATION. COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 DATED 30.12.2009 IS ALSO PLACED ON RECORD WHICH HAVE NOT BEEN DISPUTED BY TH E LD. DR. IN THIS ASSESSMENT ORDER, ASSESSING OFFICE R HAS SPECIFICALLY MENTIONED THAT ASSESSEE SHRI YOGIN DER SINGH HAD DIED DURING THE PENDENCY OF THE ASSESSMEN T PROCEEDINGS AND INSPECTOR OF HIS OFFICE WAS DIRECTE D TO MAKE NECESSARY INQUIRIES FOR SUBMITTING REPORTS REGARDING LEGAL HEIRS OF LATE SHRI YOGINDER SINGH S O THAT THEY CAN BE IMPLEADED AS REPRESENTATIVES IN PENDING ASSESSMENT PROCEEDINGS. ON THE BASIS OF TH E REPORT OF THE INSPECTOR, IT WAS BROUGHT ON RECORD T HAT LEGAL HEIRS OF LATE SHRI YOGINDER SINGH ARE SMT. SUMITRA DEVI (WIFE) SHRI VIRENDER SINGH, SHRI NARES H SINGH, SHRI PRADEEP SINGH (SONS) AND SMT. SUSHMA DEVI DAUGHTER. THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER IN THE NAMES OF LEGAL HEIRS OF LAT E SHRI YOGINDER SINGH. IT IS, THEREFORE, CLEAR THAT THE REVENUE DEPARTMENT AND THE ASSESSING OFFICER WERE AWARE OF THE FACT THAT SHRI YOGINDER SINGH HAD ALRE ADY EXPIRED ON 08.04.2008 AND HIS LEGAL HEIRS HAVE BEEN BROUGHT ON RECORD. AFTER PASSING OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 ON 30.12.2009, ASSESSING OFFICER ON THESE BASIS, REOPENED THE 13 ASSESSMENT FOR ASSESSMENT YEAR UNDER APPEAL I.E. 2006-07 BY RECORDING REASONS UNDER SECTION 148 OF T HE ACT AND ISSUED THE NOTICE UNDER SECTION 148 ON 25.03.2013, COPY OF WHICH IS PLACED ON RECORD WHICH IS ISSUED IN THE NAME OF DECEASED ASSESSEE SHRI YOGINDER SINGH (ASSESSEE) THROUGH LEGAL HEIRS TH IS NOTICE IS ISSUED IN THE NAME OF DEAD PERSON WITHOUT MENTIONING THE NAMES OF HIS LEGAL HEIRS WHICH WERE WITHIN THE KNOWLEDGE OF THE ASSESSING OFFICER AS PE R ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08. NO REASONS HAVE BEEN EXPLAINED AS TO WHY LEGAL HEIRS O F THE DECEASED ASSESSEE WERE NOT BROUGHT ON RECORD AN D WHY NAMES OF LEGAL HEIRS WERE NOT MENTIONED IN THE NOTICE UNDER SECTION 148 OF THE ACT. IT IS ALSO CL EAR THAT THE NOTICE UNDER SECTION 148 WAS NOT ISSUED IN THE NAMES OF LEGAL HEIRS OF THE ASSESSEE. THE NOTI CE UNDER SECTION 148 HAVE BEEN ISSUED ONLY IN THE NAME OF DECEASED ASSESSEE I.E. THE DEAD PERSON. 11. HON'BLE DELHI HIGH COURT IN THE CASE OF R.C.JAIN (DECD) VS CIT & OTHERS 273 ITR 384 HELD AS UNDER : HELD, THAT IT WAS KNOWN TO THE RESPONDENTS THAT RCJ HAD EXPIRED IN THE MONTH OF NOVEMBER,2001, AND YET NO PROPER ACTION WAS TAKEN AND PROCEEDINGS WERE COMMENCED AGAINST A DEAD PERSON. ON THE BASIS OF THIS, THE ASSESSMENT ORDER CAME TO BE MADE ON FEBRUARY 28,2003, UNDER SECTION 158BC AND SECTION 142 OF THE ACT,1961. THIS WAS MADE WITHOUT WAITING FOR THE PERIOD GIVEN TO THE ASSESSEE FOR FILING THE RETURN. IN VIEW OF THIS, AS THE PRINCIPLES OF NATURAL JUSTICE AS WELL AS THE PROVISIONS CONTAINED IN THE ACT HAD BEEN VIOLATED, THERE WAS NO OPTION BUT TO QUASH THE ASSESSMENT ORDER. 14 12. IN THIS CASE, HON'BLE HIGH COURT OBSERVED THAT NO EXPLANATION WAS RENDERED WHAT-SO-EVER AS TO WHY THE PROCEEDINGS WERE COMMENDED AGAINST DEAD PERSON AND DIRECTED THE CIT TO RENDER EXPLANATION IN THIS BEHALF WITHIN A PERIOD OF 15 DAYS. 13. HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS SMT. SANTOSH RANI 219 ITR 301 HELD A S UNDER : HELD THAT A PERUSAL OF THE RECORDS SHOWED THAT THE ORIGINAL APPEAL WAS FILED AGAINST THE DEAD PERSON N. NO APPEAL LIES AGAINST A DEAD PERSON. THE APPEAL WAS INCOMPETENT AND A NULLITY AND THE TRIBUNAL WAS RIGHT IN DISMISSING IT. 14. THE DECISIONS CITED BY LD. COUNSEL FOR THE ASSESSEE ALSO SUPPORT THE CASE OF THE ASSESSEE THAT WHEN NOTICE UNDER SECTION 148 HAVE BEEN ISSUED ON DEAD PERSON, IT WOULD BE INVALID, VOID AND SHOULD B E CONSIDERED AS NULLITY. IT MAY ALSO BE NOTED HERE T HAT DESPITE ABOVE FACTS IN KNOWLEDGE OF A.O., THE A.O. WAS FURTHER INTIMATED VIDE REPLY DATED 24.02.2014 BY TH E LEGAL HEIRS OF THE ASSESSEE THAT THE ASSESSEE HAD ALREADY EXPIRED ON 08.04.2008, ASSESSING OFFICER PROCEEDED TO PASS IMPUGNED RE-ASSESSMENT ORDER DATED 28.02.2014 UNDER SECTION 143(3)/147 OF THE AC T IN THE NAME OF DECEASED ASSESSEE SHRI YOGINDER SINGH. THE ASSESSING OFFICER, THEREFORE, PASSED TH E ASSESSMENT ORDER IN THE NAME OF DEAD PERSON I.E. S HRI YOGINDER SINGH WITHOUT EVEN MENTIONING THE NAME OF LEGAL HEIRS OF THE ASSESSEE IN THE ASSESSMENT ORDER . THE DECISIONS RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE, THEREFORE, CLEARLY APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESSING OFFICE R 15 ISSUED INVALID NOTICE UNDER SECTION 148 OF THE ACT AS WELL AS PASSED THE ASSESSMENT ORDER IN THE NAME OF DEAD PERSON WHICH ARE NOT MERELY IRREGULARITY BUT ILLEGALITY COMMITTED BY ASSESSING OFFICER WHICH IS NOT CURABLE. SUCH RE-ASSESSMENT PROCEEDINGS ARE NULLIT Y BEING INITIATED AGAINST A DEAD PERSON. 15. THE LD. DR CONTENDED THAT LEGAL HEIRS WERE AWARE OF THE FACTS AND TAXABILITY OF INCOME ON ACCO UNT OF CAPITAL GAINS, THEREFORE, WHEN NOTICE UNDER SECT ION 148 WAS ISSUED, IT WAS REFUSED TO ACCEPT BY THE LEG AL HEIRS. THE CONTENTION OF LD. DR IS NOT TENABLE BEC AUSE NO NOTICE UNDER SECTION 148 WAS ISSUED IN THE NAMES OF LEGAL HEIRS. THE NOTICE UNDER SECTION 148 WAS ISSUED IN THE NAME OF SHRI YOGINDER SINGH I.E. THE DEAD PERSON ( THROUGH LEGAL HEIRS) WITHOUT MENTIONI NG THE NAMES OF LEGAL HEIRS. THE ASSESSING OFFICER WAS WELL AWARE OF THE FACT THAT ASSESSEE HAD ALREADY EXPIRED ON 08.04.2008, THEREFORE, HE SHOULD NOT HAV E ISSUED THE NOTICE DATED 25.03.2013 UNDER SECTION 14 8 OF THE ACT IN THE NAME OF DECEASED ASSESSEE. IT IS FOR THE ASSESSING OFFICER TO BRING THE LEGAL HEIRS ON R ECORD IN ASSESSMENT ORDER IN APPEAL ON THE BASIS OF ASSESSMENT ORDER ALREADY PASSED IN ASSESSMENT YEAR 2007-08, BECAUSE THE RE-OPENING IS DONE ON THE BASI S OF ASSESSMENT ORDER PASSED IN ASSESSMENT YEAR 2007- 08 THEREFORE, ASSESSING OFFICER WAS AWARE OF THE FA CT THAT THE PROCEEDINGS SHALL HAVE TO BE COMMENCED AGAINST THE LEGAL HEIRS ONLY. THE ASSESSING OFFICE R CANNOT LEAVE IT TO THE POSTAL AUTHORITIES TO VERIFY THE NAMES OF THE LEGAL HEIRS OF THE ASSESSEE WHILE SERV ING THE NOTICE UPON THE DEAD PERSON. WHEN NO NOTICE HA VE BEEN ISSUED UNDER SECTION 148 IN THE NAMES OF LRS O F THE DECEASED ASSESSEE, THEREFORE, THERE IS NO QUEST ION OF REFUSAL TO ACCEPT SUCH NOTICE UNDER SECTION 148 BY THE LEGAL HEIRS. IT IS PRESUMPTION OF THE LD. 16 CIT(APPEALS) ONLY THAT NOTICE UNDER SECTION 148 HAV E BEEN REFUSED TO ACCEPT BY THE LEGAL HEIRS. THE LD. DR ALSO CONTENDED THAT WHEN THE NAMES OF LEGAL HEIRS A RE NOT MENTIONED IN THE NOTICE AND RE-ASSESSMENT ORDER , IT IS MERELY AN IRREGULARITY. NOTICE UNDER SECTION 148 IS JURISDICTIONAL NOTICE AND HAVE BEEN ISSUED IN TH E NAME OF DEAD PERSON. IT IS, THEREFORE, CLEARLY AN ILLEGALITY AND NULLITY IN ISSUING NOTICE UNDER SECT ION 148 IN THE NAME OF DEAD PERSON. THE RE-ASSESSMENT ORDER IS ALSO PASSED IN THE NAME OF DEAD PERSON, THEREFORE, RE-ASSESSMENT ORDER IS ILLEGAL, INVALID, NULL AND VOID AND SHALL HAVE TO BE DECLARED NULLITY. IT IS NOT A MERE IRREGULARITY. DECISIONS CITED BY LD. DR ARE, THEREFORE, NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 16. THE LD. CIT(APPEALS) ALSO REFERRED TO PROVISION S OF SECTION 292BB OF THE ACT AND PROVISIONS OF SECTI ON 282 FOR SERVICE OF THE NOTICE. SINE NOTICE UNDER S ECTION 148 OF THE ACT AND OTHER STATUTORY NOTICES HAVE BEE N ISSUED IN THE NAMES OF DEAD PERSON, THERE IS NO QUESTION OF HAVING ANY IRREGULARITY IN THE SAME. FURTHER, SECTION 292BB PROHIBITS AN ASSESSEE IN ANY ENQUIRY OR PROCEEDINGS TO RAISE THE PLEA OF NON SER VICE, UN-TIMELY SERVICE OR IMPROPER SERVICE OF NOTICE, IF HE HAS PARTICIPATED IN THE ASSESSMENT OR RE-ASSESSMENT PROCEEDINGS AND SUCH OBJECTION HAS NOT BEEN RAISED BEFORE COMPLETION OF SUCH ASSESSMENT OR RE- ASSESSMENT PROCEEDINGS. THE NOTICE UNDER SECTION 1 48 AND OTHERS WERE ISSUED IN THE NAME OF DEAD PERSON. THEREFORE, THERE IS NO QUESTION OF APPLICABILITY OF SUCH PROVISIONS AGAINST THE ASSESSEE OR HIS LEGAL HEIRS. IT IS ALSO NOTED THAT THIS SECTION WAS INSERTED INTO T HE INCOME TAX ACT BY FINANCE ACT, 2008 W.E.F. 01.04.2008 AND THUS, WILL NOT BE APPLICABLE TO ASSESSMENT YEAR UNDER APPEAL I.E. 2006-07. ITAT 17 DELHI (SB) IN THE CASE OF KUBER TOBACCO PRODUCTS PV T. LTD. VS DCIT 28 SOT 292 HELD THAT SEC 292BB CANNOT BE CONSTRUED RETROSPECTIVELY AS THE SAME HAVE BEEN MADE APPLICABLE BY THE STATUTE W.E.F. 01.04.2008, THEREFORE SECTION 292BB IS APPLICABLE TO ASSESSMENT YEAR 2008-09 AND SUBSEQUENT ASSESSMENT YEARS. THEREFORE, FINDINGS OF LD. CIT(APPEALS) CANNOT SUST AIN IN LAW. 16(I) THE LD. CIT(A) RELIED UPON ORDER OF ITAT AG RA BENCH IN THE CASE OF LAL CHAND AGGARWAL (SUPRA) WHICH HAVE BEEN HELD OVER-RULED BY THE HON'BLE ALLAHABAD HIGH COURT. THE LD. CIT (A) ALSO RELIED U PON CERTAIN DECISIONS IN SUPPORT OF HIS FINDINGS BUT TH ESE DECISIONS ARE CLEARLY DISTINGUISHABLE ON FACTS AND CIRCUMSTANCES OF THE CASE AS NOTED ABOVE. THE DECISIONS CITED BY LD. COUNSEL FOR THE ASSESSEE CLE ARLY APPLY TO THE CASE OF THE ASSESSEE TO HOLD THAT NOTI CE UNDER SECTION 148 OF THE ACT WAS INVALID AND NO NOT ICE UNDER SECTION 148 HAVE BEEN SERVED UPON THE ASSESSEE. THE ASSESSMENT ORDER AGAINST DEAD PERSON IS NULLITY AND IS VOID. 17. CONSIDERING ABOVE DISCUSSION, WE ARE OF THE VIEW THAT NOTICE UNDER SECTION 148 DATED 25.03.2013 ISSUED IS INVALID AND HAVE NOT BEEN SERVED UPON DECEASED ASSESSEE OR THE LEGAL HEIRS WHICH IS ESSENTIAL TO MAKE RE-ASSESSMENT ORDER. NO VALID RE - ASSESSMENT ORDER HAVE BEEN PASSED BEING IT IS PASSE D IN THE NAME OF DEAD PERSON. IN THIS VIEW OF THE MATTER, WE SET ASIDE AND QUASH NOTICE UNDER SECTION 148 OF THE ACT AS WELL AS THE RE-ASSESSMENT ORDER UNDER SECTION 143(3)/147 DATED 28.02.2014. THE LD. CIT(APPEALS) WAS, THEREFORE, NOT JUSTIFIED IN UPHOL DING THE RE-OPENING OF THE ASSESSMENT IN THE MATTER. RESULTANTLY, WE QUASH THE IMPUGNED ORDER AS WELL. 18 18. SINCE WE HAVE SET ASIDE AND QUASHED RE- ASSESSMENT ORDER, THEREFORE, ALL ADDITIONS MADE THEREIN WOULD STAND DELETED. THE ADDITION ON MERIT IS NOT DECIDED HERE BECAUSE IT IS LEFT FOR ACADEMIC DISCUSSION ONLY. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 8. IN THIS CASE, ASSESSING OFFICER ISSUED STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT ON 12.09.201 1 AFTER DEATH OF ASSESSEE. THE ASSESSEE LATE SHRI RA JNI KANT HAD EXPIRED ON 20.02.2011. COPY OF THE DEATH CERTIFICATE IS ALSO PLACED ON RECORD. THE ASSESSIN G OFFICER SUMMONED SON OF THE ASSESSEE SHRI KARTIK MAHARISHI AND HIS BROTHER SHRI SACHIDA NAND UNDER SECTION 131 OF THE ACT FOR 23.12.2011 FOR RECORDING THEIR STATEMENTS AS REGARDS EXPLANATION ON THE CONTENTS O F THE SEIZED DIARY. THE LD. CIT(APPEALS) ALSO NOTED IN H IS FINDINGS THAT THE FACT ABOUT EXPIRY OF THE ASSESSEE ON 20.02.2011 IS AVAILABLE ON RECORD AT THE TIME OF RE CORDING OF STATEMENTS ON 23.12.2011 OF SHRI SACHIDA NAND, BROTHER OF THE DECEASED ASSESSEE AND SHRI KARTIK MAHARISHI S/O DECEASED ASSESSEE. THESE FACTS, THER EFORE, CLEARLY PROVE THAT AT THE STAGE OF RE-ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WAS AWARE OF THE FACT THAT ASSESSEE HAD ALREADY EXPIRED BEFORE ISSUING NO TICE UNDER SECTION 143(2) OF THE ACT. THE ASSESSING OFF ICER WAS AWARE OF THE DEATH OF THE ASSESSEE AT RE-ASSESS MENT PROCEEDINGS AND ONLY BECAUSE OF THIS REASON, HE HAS ISSUED SUMMONS UNDER SECTION 131 TO THE SON AND 19 BROTHER OF THE ASSESSEE FOR RECORDING THEIR STATEME NTS UNDER SECTION 131 WITH REGARD TO THE CONTENTS OF SE IZED DIARY. BOTH THESE PERSONS IN THEIR STATEMENTS MENT IONED THAT THEY DO NOT KNOW ANYTHING ABOUT THE CONTENTS O F THE DIARY OR THE ENTRY AND EVEN BROTHER OF THE ASSESSEE EXPLAINED THAT THIS DIARY WAS WRITTEN BY HIS LATE B ROTHER SHRI RAJNI KANT. THE ASSESSING OFFICER IN HIS FIND INGS ALSO RECORDED THAT SUMMONS UNDER SECTION 131 HAVE B EEN ISSUED TO SHRI KARTIK MAHARISHI, SON OF LATE SHRI R AJNI KANT WHO HAS NOW BECOME PROPRIETOR OF THE FIRM. THEREFORE, THERE IS NO DISPUTE THAT ASSESSING OFFIC ER WAS AWARE OF THE FACT THAT ASSESSEE HAD EXPIRED DURING THE RE-ASSESSMENT PROCEEDINGS AND AS SUCH, IT IS DUTY O F THE ASSESSING OFFICER TO BRING LEGAL HEIRS OF THE DECEA SED ASSESSEE ON RECORD BY IMPLEADING AS PER LAW AND SHA LL HAVE TO PASS THE ASSESSMENT ORDER IN THE NAME OF TH E LEGAL HEIRS OF THE ASSESSEE ON BEHALF OF THE DECEAS ED ASSESSEE. HOWEVER, ASSESSING OFFICER WITHOUT IMPLE ADING AND BRINGING LEGAL HEIRS OF THE ASSESSEE ON RECORD, PASSED RE-ASSESSMENT ORDER UNDER SECTION 143(3)/148 OF THE ACT ON 26.12.2011 IN THE NAME OF DEAD PERSON I. E. SHRI RAJNI KANT. NO NOTICE HAS BEEN ISSUED AGAI NST L/H OF DECEASED ASSESSEE. IT IS THUS, ILLEGALITY IN RE- ASSESSMENT PROCEEDINGS AND NO ASSESSMENT ORDER CAN BE PASSED AGAINST THE DEAD PERSON WITHOUT IMPLEADING A ND BRINGING HIS LEGAL HEIRS ON RECORD. SINCE NO VALID RE- ASSESSMENT ORDER HAVE BEEN PASSED BEING IT IS PASSE D IN 20 THE NAME OF DEAD PERSON, THEREFORE, DECISION IN THE CASE OF SHRI YOGINDER SINGH (SUPRA) SQUARELY APPLY TO TH E FACTS AND CIRCUMSTANCES OF THE CASE. THE DECISIONS RELIE D UPON BY LD. CIT(APPEALS) ARE DISTINGUISHABLE ON FAC TS. THUS, RE-ASSESSMENT ORDER PASSED ON DEAD PERSON IS NULL AND VOID. I HOLD ACCORDINGLY. 8(I) IN THIS VIEW OF THE MATTER, I SET ASIDE AND QUASH THE RE-ASSESSMENT PROCEEDINGS UNDER SECTION 143(2)/147 DATED 26.12.2011. THE LD. CIT(APPEALS) WAS, THEREF ORE, NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT ORDER IN THE MATTER. RESULTANTLY, I QUASH THE IMPUGNED ORDERS. 9. SINCE I HAVE SET ASIDE AND QUASHED RE-ASSESSMENT ORDER BEING PASSED AGAINST THE DEAD PERSON, THEREFO RE, ALL THE ADDITIONS MADE THEREIN WOULD STAND DELETED. HOWEVER, FOR CLARITY OF THE MATTER, I MAY NOTE HERE THAT AS PER THE SEIZED DOCUMENT, THE ASSESSING OFFICER H AS TAKEN THE FIGURE FROM SEIZED DIARY 15300 AND MADE THE ADDITION OF RS. 15,30,000/-. HON'BLE DELHI HIGH CO URT IN THE CASE OF CIT VS GIRISH CHAUDHRY 163 TAXMAN 608 H ELD THAT, IN THE INSTANT CASE, THERE WERE NO MATERIAL ON RECORD TO SHOW AS TO ON WHAT BASIS, ASSESSING OFFIC ER REACHED THE CONCLUSION THAT THE FIGURE 48 WAS TO BE READ AS RS. 48 LACS. THE DOCUMENT RECOVERED DURING THE COURSE OF SEARCH IN THE INSTANT CASE WAS A DUMB DOCUMENT. THUS THE TRIBUNAL RIGHTLY DELETED THE ADDITION MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME ON THE 21 BASIS OF THE SEIZED MATERIAL. SINCE ASSESSEE HAD ALREADY EXPIRED DURING RE-ASSESSMENT PROCEEDINGS, BROTHER A ND SON OF DECEASED ASSESSEE WERE NOT AWARE OF THE CONT ENTS OF THE DIARY, THEREFORE, THEY COULD NOT EXPLAIN THE ENTRIES AND CONTENTS OF THE SEIZED DIARY. THE ASSESSING OF FICER MERELY ON PRESUMPTION TREATED THE FIGURE OF 15300 AS RS. 15,30,000/-. THUS, THERE IS NO MATERIAL AVAILA BLE ON RECORD TO SUPPORT THE FINDINGS OF THE AUTHORITIES B ELOW IN TAKING THE FIGURE OF 15300 AS RS. 15,30,000/-. T HE ADDITION WAS, THEREFORE, WHOLLY UNJUSTIFIED. I, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BE LOW AND DELETE THE ADDITION EVEN ON MERITS. BOTH GROUNDS O F APPEALS OF THE ASSESSEE ARE, ACCORDINGLY, ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 673/2015 ( A.Y. 2009-10) 11. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS : 1 . THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN UPHOLDING THE FRAMING OF ASSESSMENT IN THE HANDS OF THE DECEASED ASSESSEE AND NOT IN THE HANDS OF THE LEGAL HEIRS WH ICH IS ILLEGAL, ARBITRARY AND HENCE UNJUSTIFIED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONE R OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THE ADDITION OF RS.12,32,600/- (THOUGH WRITTEN AS RS.12,36,000/- BY THE AO IN THE COMPUTATION) MADE ON THE BASIS OF A DIARY WHICH IS NO MORE THAN A DUMB DOCUMENT WHICH IS ARBITRARY AND UNJUSTIFIED. 22 3. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S FURTHER ERRED IN SUSTAINING THE ADDITION OF RS.44884/- OUT OF TOTAL ADDITION OF RS.60,575/- MADE BY APPLYING THE PROVISIONS OF SECT ION 40(A)(3) WHICH IS ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.33,000/- MADE BY APPLY ING THE PROVISIONS OF SECTION 40(A)(3) WHICH IS ARBITRARY A ND UNJUSTIFIED. 5. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF RS.73,300/- MADE BY APPLYING THE PROVISIONS OF SECTION 73(1) OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 6. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF INTEREST APP LYING THE PROVISIONS OF SECTION 36(L)(III) THOUGH RESTRICTING IT TO THE CLAIM OF EXPENDITURE I.E. RS.1,56,470/- AS AGAINST ADDITION MADE OF RS.2,11,693/- MADE BY THE ASSESSING OFFICER WHICH I S ARBITRARY AND UNJUSTIFIED. 7. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.1,80,036/- APPLYING TH E PROVISIONS OF SECTION 2(22)(E) OF THE ACT WHICH IS ARBITRARY AND UNJUSTIFIED. 12. GROUND NOS. 1 AND 2 ARE SAME AS HAVE BEEN DECID ED IN ASSESSMENT YEAR 2008-09 ABOVE. IN THIS YEAR, ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 14 3(3) DATED 27.12.2011. THE ASSESSING OFFICER, SIMILARLY RECORDED STATEMENT OF SON AND BROTHER OF THE DECEAS ED ASSESSEE ON 23.12.2011 WITH REGARD TO EXPLANATION O N THE SAME SEIZED DIARY B-16 AND MADE THE ADDITION ON GRO UND NO.2. 12(I) SINCE ON THESE GROUNDS, I HAVE ALREADY DEC IDED THE APPEAL IN FAVOUR OF THE ASSESSEE THEREFORE, FOLLOWI NG THE REASONS FOR DECISION FOR ASSESSMENT YEAR 2008-09, I SET ASIDE AND QUASH THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT BEING PASSED IN THE NAME OF DEAD PERSON I.E. SHRI 23 RAJNI KANT, PROPRIETOR M/S B. KARTIK & CO.. THE A DDITION ON MERIT IS ALSO SIMILAR ON GROUND NO. 2 WHICH IS A LSO DELETED IN ASSESSMENT YEAR 2008-09. THEREFORE, THI S ADDITION ON MERIT IS ALSO DELETED. THE OTHER GROUN D NOS. 3 TO 7 ARE INDEPENDENT GROUNDS, HOWEVER, WHEN I HAVE SET ASIDE AND QUASHED THE ASSESSMENT ORDER UNDER SECTIO N 143(3) OF THE ACT AS WAS PASSED IN THE NAME OF DEAD PERSON, THEREFORE, THERE IS NO NEED TO DECIDE THESE GROUNDS OF APPEAL SEPARATELY. 13. SINCE, IN THIS YEAR ALSO, NO VALID ASSESSMENT O RDER HAVE BEEN PASSED BEING IT IS PASSED IN THE NAME OF DEAD PERSON, THEREFORE, I SET ASIDE AND QUASH THE ASSESS MENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 27.12.2 011. ALL ADDITIONS MADE THEREIN WOULD STAND DELETED. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 15. IN THE RESULT, APPEAL OF THE ASSESSEE FOR ASSES SMENT YEAR 2008-09 IS PARTLY ALLOWED AND IN ASSESSMENT YE AR 2009-10 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 17 TH FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH