Sadaria Pankajbhai Mahadevbhai, L/H of Late Shri Sadaria Mahadevbhai Khodabhai, Morbi V. The Income Tax Office, Ward-5(3), Morbi

ITA 78/RJT/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6667 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DM RINDANI
• Keywords: Reopening of assessment
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI S.V. MEHROTRA , ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARRY , MEMBER ITA NO. 78 / RJT /201 3 ASS T. YEAR : 2006 - 07 LATE SHRI SADARIA MAHADEVBHAI KHODABHAI, THROUGH LR SADARIA PANKAJBHAI MAHADEVBHAI, RAVAPAR ROAD, MORBI PAN : AGNPS5985R (APPELLANT) VS ITO, WARD - 5(3), MORBI (RESPONDENT) APPELLANT BY : SHRI D.M. RINDANI, C.A RESPONDENT BY : SHRI AVINASH KUMAR, DR DATE OF HEARING : 2 0 /0 3 /201 7 DATE OF PRONOUNCEMENT : 22 /0 3 /201 7 O R D E R PER K. NARSIMHA CHARRY, MEMBER, JM : THIS IS AN APPEAL CHALLENGING ORDER DATED 31.1.2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, RAJKOT (HEREINAFTER REFERRED TO AS LD. CIT(A) ). 2. BRIEFLY STATED FACTS ARE THAT , ON THE LETTER DATED 29.9.2008 FROM THE ACIT, CC - 2, RAJKOT , THE ASSESSING OFFICER CAME TO KNOW THAT BEFORE THE ASST. DIRECTOR OF INCOME TAX (INV.) - I, RAJKOT THE ASSESSEE HAD DECLARED A SUM OF RS.20,08,000/ - IN TOTAL AS UNRECORDED INVESTMENTS IN 2 ITA NO. 78/RJT/2013 LATE SHRI SADARIA MAHADEVBHAI KHODABHAI PROPERTY AND HAD AGREED TO PAY DUE TAXES THEREON , AS SUCH, ON THE BASI S OF SUCH INFORMATION, THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT FOR ASSESSMENT YEAR 2006 - 07 U/S 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AND ISSUED A NOTICE U/S 148 OF THE ACT TO THE ASSESSEE ON 10.10.2008. THE ASSES SING OFFICER RECORDED THAT THE SAID NOTICE WAS SERVED ON THE ASSESSEE ON 18.10.2008 BUT DUE TO NON - COMPLIANCE WITH REQUIREMENT OF SUCH NOTICE , NOTICE U/S 142(1) OF THE ACT WAS ALSO ISSUED. HOWEVER, IT HAS COME TO THE NOTICE OF THE ASSESSING OFFICER THAT T HE ASSESSEE PASSED AWAY ON 22.1.2008, AS SUCH, BY LETTER DATED 18.6.2009 THE LEGAL HEIR OF THE ASSESSEE WAS REQUIRED TO FURNISH THE RETURN OF INCOME. SUBSEQUENTLY, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT AT RS.13,58 ,950/ - . 3. AGGRIEVED BY THE SAME, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) , BUT BY WAY OF THE IMPUGNED ORDER, THE LD. CIT(A) DISMISSED THE APPEAL CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER. CHALLENGING THE SAME, ASSESSEE IS BEFORE US IN THIS APPEAL MAINLY ON THE GROUND THAT REOPENING OF ASSESSMENT U/S 147 OF THE ACT IS BAD FOR WANT OF NOTICE U/S 148 OF THE ACT TO THE LEGAL HEIRS OF ASSESSEE. OTHER GROUND S ARGUED ARE ALSO URGED ON MERITS. 4. IT IS THE ARGUMENT OF THE LD. AR THAT THE ORDER OF ASSESSMENT ITSELF READS THAT THE FACT OF DEATH OF ASSESSEE ON 22.1.2008 WAS BROUGHT TO THE NOTICE OF ASSESSING OFFICER, BUT INSPITE OF SAME, ABOUT 9 MONTHS THEREAFTER THE ASSESSING OFFICER ISSUED A NOTICE U/S 148 OF THE ACT TO A 3 ITA NO. 78/RJT/2013 LATE SHRI SADARIA MAHADEVBHAI KHODABHAI DEAD P ERSON, AND IN THE ABSENCE OF ANY NOTICE TO THE LEGAL HEIRS, THE PROCEEDINGS ARE VITIATED AND ANY ORDER PASSED AGAINST A DEAD PERSON IS A NULLITY. PER CONTRA , IT IS THE ARGUMENT OF THE LD. DR THAT ON COMING TO KNOW OF THE DEATH OF THE ASSESSEE, AND SINCE I T WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER TO DROP THE PROCEEDINGS, THE ASSESSING OFFICER ISSUED A LETTER DATED 18.6.2009 FOR THE LEGAL HEIRS TO FILE THE RETURN OF INCOME, AS SUCH U/S 159(2) OF THE ACT THERE IS NO ILLEGALITY OR IRREGULARITY COMMITTED BY THE AUTHORITIES BELOW , AND THE APPEAL IS LIABLE TO BE DISMISSED. 5 . WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULLY AND PERUSED THE PAPERS ON RECORD. THERE IS NO DENIAL OF THE FACT THAT VIDE LETTER DATED 20.2.2009 SUBMITTED TO THE AUTHORITIES ON 25.2 .2009 (PAGE NUMBERS 7 TO 9 OF PAPER BOOK), THE FACT OF DEATH OF THE ASSESSEE WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. DEATH CERTIFICATE WAS ALSO ENCLOSED. THERE IS ALSO NO DENIAL OF THE FACT THAT NOTICE U/S 148 OF THE ACT WAS ISSUED ON 10.10.2 008. WHEN THE NOTICE U/S 148 OF THE ACT WAS ISSUED MORE THAN 9 MONTHS AFTER THE DEATH OF ASSESSEE, IT IS NOT POSSIBLE FOR SERVICE OF SUCH NOTICE ON THE ASSESSEE. TO THIS EXTENT, THE RECORDING OF ASSESSING OFFICER THAT NOTICE U/S 148 OF THE ACT WAS SERVED UPON THE ASSESSEE ON 18.10.2008 IS INCORRECT, BECAUSE OF IMPOSSIBILITY OF ANY NOTICE ON A DEAD PERSON. 6 . IT IS ALSO NOT IN DISPUTE THAT NO FURTHER NOTICE WAS ISSUED TO THE LEGAL HEIRS OF ASSESSEE SUBSEQUENTLY. IN THIS MATTER, THE VERY PROCEEDINGS WER E INITIATED AGAINST A DEAD PERSON, AS SUCH THE 4 ITA NO. 78/RJT/2013 LATE SHRI SADARIA MAHADEVBHAI KHODABHAI DEPARTMENT CANNOT HAVE THE BENEFIT OF PROVISIONS OF SEC. 159(2)(A) OF THE ACT INASMUCH AS INITIATION OF PROCEEDINGS AGAINST A DEAD PERSON STANDS ON A DIFFERENT FOOTING FROM PROCEEDINGS INITIATED AGAINST A PERS ON WHO DIED SUBSEQUENTLY. RELIANCE IS PLACED BY THE LD. AR ON THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF VIPIN WALIA VS ITO IN W.P.(C) 8273/2015 & CM NO. 17434/2015 DATED 15.2.2016 AND HONBLE MADRAS HIGH COURT IN THE CASE OF CIT - VIII, CHENN AI VS SHRI M. HEMANATHAN IN TAX APPEAL NO. 199 OF 2016 DATED 23.3.2016 . IN THE DECISION OF THE HONBLE MADRAS HIGH COURT, IT IS CLEARLY HELD THAT : - 12. .. THE CONTENTION OF THE LEARNED STANDING COUNSEL FOR THE DEPARTMENT LOSES SIGHT OF ONE IMPORTANT DISTINCTION BETWEEN A CASE WHERE THE PROCEEDINGS ARE INITIATED AGAINST A PERSON, WHO IS ALIVE, BUT CONTINUED AFTER HIS DEATH AND A CASE OF PROCEEDINGS INITIATED AGAINST A DEAD PERSON HIMSELF. IF THE PROCEEDINGS HAD BEEN INITIATED AGAINST A PERSO N, WHO WAS ALIVE, AND THEY WERE CONTINUED AFTER HIS DEATH AFTER PUTTING HIS LEGAL HEIRS ON NOTICE, THOSE PROCEEDINGS, UNDER CERTAIN CIRCUMSTANCES, MAY BE SAVED. SUCH A SITUATION IS ALSO CONTEMPLATED IN THE CIVIL PROCEEDINGS AND A PROVISION IS MADE IN THE C IVIL PROCEDURE CODE ITSELF UNDER ORDER XXII RULE 4. THEREFORE, THE CASES WHERE THE VERY PROCEEDINGS ARE INITIATED AGAINST A DEAD PERSON STAND APART FROM THOSE PROCEEDINGS WHERE THEY ARE INITIATED AGAINST A LIVE PERSON, BUT CONTINUED AFTER HIS DEATH AGAINS T THE LEGAL HEIRS. HENCE, THE FIRST CONTENTION IS REJECTED. 7. IN VIEW OF THE ADMITTED FACTS AND SETTLED PRINCIPLES OF LAW, WE FIND THAT THE PROCEEDINGS INITIATED AGAINST A DEAD PERSON ARE NULLITY AND THE ORDERS OF THE AUTHORITIES BELOW CANNOT BE SUSTAI NED FOR WANT OF NOTICE TO THE LEGAL HEIRS OF THE DECEASED PERSON BEFORE FINALIZING THE PROCEEDINGS U/S 147 OF THE ACT . SINCE WE FIND ON TECHNICAL ISSUE THAT INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AGAINST A DEAD PERSON 5 ITA NO. 78/RJT/2013 LATE SHRI SADARIA MAHADEVBHAI KHODABHAI WITHOUT ANY NOTICE TO THE LEGAL HEIRS IS A NULLITY, WE FIND IT IS NOT NECESSARY TO DELVE DEEPER IN TO THE MERITS OF THE CASE. WITH THIS VIEW OF THE MATTER, WE QUASH THE ORDERS OF THE AUTHORITIES BELOW AND ALLOW THE APPEAL OF THE ASSESSEE . 8. IN THE RESULT , APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 N D MARCH , 201 7 . SD/ - SD/ - ( S.V. MEHROTRA ) ACCOUNTANT MEMBER ( K. NARSIMHA CHARRY ) JUDICIAL MEMBER MUMBAI, DATE : 2 2 N D MARCH , 201 7 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, RAJKOT 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, RAJKOT