Dhaval Dilipkumar Thakkar legal heir of late Dilipkumar Amrutlal Thakkar, Kheda V. The Income Tax Officer, Ward-1 Nadiad Formerly Ward-2, Nadiad

ITA 787/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5528 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-07-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 08-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HRISHIKESH HEMANT PATKI
• Keywords: Invalid notice
• Section: 143(3); 250; 101

Judgement Text

आयकर अपीलीय अिधकरण,अहमदाबाद ᭠यायपीठ ‘SMC’ अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] ŵीमती अɄपूणाŊ गुɑा, लेखा सद˟ के समƗ। BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं / ITA No. 787/Ahd/2023 िनधाŊरण वषŊ/Assessment Year: 2017-18 Dhaval Dilipkumar Thakkar, L/h of Late Shri Dilipkumar Amrutlal Thakkar, At Narsanda, Gujarat-388120 PAN : AKXPT 6003 F बनाम Vs. Income Tax Officer, Ward-1, Nadiad (Formerly ITO, Ward-2, Nadiad) अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) िनधाŊįरती की ओर से / Assessee by : Shri Hemant Suthar, AR ŮȑथŎ की ओर से / Revenue by: Shri Hrishikesh Hemant Patki, Sr DR सुनवाई कᳱ तारीख/Date of Hearing : 24/07/2024 घोषणा कᳱ तारीख /Date of Pronouncement: 30/07/2024 आदेश/O R D E R The present appeal has been filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short referred to as “ld. CIT(A)”] under section 250 of the Income Tax Act, 1961 [in short referred to as “the Act”] dated 12.09.2023 pertaining to Assessment Year (AY) 2017-18. 2. The grounds raised by the assessee read as follows :- “1. The Ld. A.O. has erred in law and in facts in issuing order u/s 143(3) in the name of dead person. The notice so issued is illegal/and invalid in law. The order passed consequent to such illegal/invalid notice is prayed to be quashed. 2. Without prejudice to the other grounds, National Faceless Appeal Centre (NFAC) has erred in law and in facts in confirming the action of the Ld. A.O. making addition of cash deposited of Rs. 13,00,000/- during demonetization period. Thus, the action of the Ld. CIT(A) is bad in law and therefore the appeal of the appellant be allowed.” (SMC) ITA No. 787/Ahd/2023 - Dhaval Dilipkumar Thakkar L/h of late Dilipkumar Amrutlal Thakkar Vs ITO AY : 2017-18 2 3. The brief facts of the case are that, in the assessment framed u/s 143(3) of the Act, an addition of Rs.15,00,000/- was made to the income of the assessee on account of cash found deposited in the bank account of the assessee during demonetization period remaining unexplained, which was confirmed by the ld. CIT(A) - though restricted to Rs.13 lakhs only giving credit of deposit of Rs.2 lakhs on account of the fact that the assessee was a senior citizen and in view of the Government of India directions in this regard to give cash allowance of Rs.2 lakhs to senior citizens and ladies for cash deposited during demonetization period in the bank in SBNs. 4. The solitary plea of the ld. Counsel for the assessee before us was that the assessment order was not a valid order in the eyes of law since it was made on a non-existent assessee who had expired during the pendency of assessment proceedings which fact was intimated to the Assessing Officer also. In this regard, he drew our attention to the assessment order wherein the fact stands recorded in paragraph No.2 of the order regarding the intimation of the demise of the assessee. The ld. Counsel for the assessee stated that this plea was being raised for the first time in the appellate proceedings before the ITAT; that it had never been raised before the ld. CIT(A) but being a legal ground under the facts being available on record, the same needed to be admitted for adjudication. 5. The ld. DR, though admitted to the facts as stated by the ld. Counsel for the assessee, vehemently opposed the contention raised by the ld. Counsel for the assessee. 6. Having heard both the parties, it is an admitted fact that the assessment in the present case has been made on a non-existent assessee who admittedly (SMC) ITA No. 787/Ahd/2023 - Dhaval Dilipkumar Thakkar L/h of late Dilipkumar Amrutlal Thakkar Vs ITO AY : 2017-18 3 had expired during the pendency of assessment proceedings and which fact was very much in the knowledge of the Assessing Officer. The assessment order clearly notes the fact that two notices issued to the assessee remained unresponded to. That against the third notice issued the assessee initially sought adjournment and thereafter a reply was filed to the AO by the son of the assessee intimating the factum of death of the assessee during the pendency of the assessment proceedings. The order reveals that the AO notes the said fact and goes on to frame assessment in the name of the deceased assessee making addition of the cash found deposited in his bank account during demonetization of Rs.15 lacs. 7. The order passed is in clear violation of law. Section 159 of the Act provides the machinery for assessment of income of a deceased person providing for continuing proceedings against the legal representative of the deceased and fixing liability on the representative to pay taxes on the income assessed to the extent of assets inherited. Section 159(2) deals with the situation where the assessees expires during the pendency of proceedings and provides for the proceedings undertaken till then to be deemed to have been undertaken on the legal representative and to be continued thereafter on the legal representative from the stage at which it stood on the death of the assessee. The relevant provisions of section 159 (1) & (2) of the Act are reproduced hereunder : “159. (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),— (SMC) ITA No. 787/Ahd/2023 - Dhaval Dilipkumar Thakkar L/h of late Dilipkumar Amrutlal Thakkar Vs ITO AY : 2017-18 4 (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly.” 8. In the present case after the intimation of the death of the assessee to the AO, no notice whatsoever was served on the legal representative. Prior to the death of the assessee there was no reply filed to the AO. Subsequent to his death, the AO was required to seek the necessary information from his legal representative for framing assessment. No such act was done by the AO. Besides the assessment is also framed on a deceased person. The Hon’ble jurisdictional High Court in the case of Chandreshbhai Jayantibhai Patel v ITO (2019) 101 taxamann.com 362 has categorically held that no order can be passed on a deceased assessee. 9. In view of the same, the assessment order is quashed as invalid, and the appeal of the assessee is allowed for the above reason. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 30/07/2024 at Ahmedabad. Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER (अɄपूणाŊ गुɑा,लेखा सद˟) Ahmedabad, dated 30/07/2024 btk* (SMC) ITA No. 787/Ahd/2023 - Dhaval Dilipkumar Thakkar L/h of late Dilipkumar Amrutlal Thakkar Vs ITO AY : 2017-18 5 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाडᭅ फाईल / Guard file. आदेशानुसार / BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation- 24.07.2024 2. Date on which the typed draft is placed before the Dictating Member ...25.07.24.... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ...26.07..2024......... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ...30..07.2024................. 5. Date on which the file goes to the Bench Clerk ...30.07.2024........ 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 8. Date of Despatch of the Order..................