The ITO, Ward-1, Vapi V. Shri Akhter Nooruddinahmed Saiyed, Vapi

ITA 837/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76695 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 20-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 143(3); 15

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !'# !$ !'# !$ !'# !$ !'# !$0 00 0! !! !0 00 0 %$ %$ %$ %$, , , , &' ( &' ( &' ( &' ( & & & & BEFORE SHRI G.C. GUPTA, VICE-PRESIDENT AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 837/AHD/2013 ASSESSMENT YEAR 2009-10 INCOME TAX OFFICER, VAPI WARD-1, VAPI. PAN: AWJPS3521R VS SHRI AKHTER NOORUDDINAHMED SAIYED 7, GODAL COMPLEX, GODAL NAGAR, VAPI. )*/ APPELLANT ,-)* / RESPONDENT REVENUE BY : SHRI P.L. KUREEL, SR. DR ASSESSEE(S) BY : NONE $'. / 0'/ // / DATE OF HEARING : 20/05/2014 123 / 0' / DATE OF PRONOUNCEMENT : 23/05/2014 &4 &4 &4 &4/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE CIT(A), VALSAD DATED 27.12.2012 BY TAKING THE FOLLO WING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN RESTRICTING TH E ADDITION FROM RS 18,34,600/- TO RS 1,66,949/- AS G.P. @ 9.10% MADE ON ACCOUNT OF THE UNDISCLOSED INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCES OF EXPENSES OF RS 7,78,364/-. ITA NO. 837/AHD/2013 SH. AKHTER NOORUDDIN AHMED SAIYED VS. ITO, WARD-1, VAPI FOR A.Y. 2009-10 - 2 - 2. NOTICE WAS ISSUED TO THE RESPONDENT ASSESSEE BY REGISTERED POST WITH ACKNOWLEDGEMENT DUE ON 07.05.2014 WHICH WAS RE TURNED BY THE POSTAL AUTHORITIES ON 09.05.2014 WITH THE REMARKS DECEASE D. 3. THE DEPARTMENTAL REPRESENTATIVE AT THE TIME OF THE HEARING FILED BEFORE US COPY OF THE DEATH CERTIFICATE OF THE ASSE SSEE SHRI AKHTER NOORUDDINAHMED SAIYED AND POINTED OUT THEREFROM THA T THE ASSESSEE EXPIRED ON 29.12.2009 AND THE IMPUGNED ORDER OF ASS ESSMENT WAS PASSED BY THE ASSESSING OFFICER ON 21.11.2011. AS THE ASS ESSMENT HAS NOT BEEN MADE IN THE NAME OF THE LEGAL REPRESENTATIVE, THERE FORE THE ASSESSMENT SHOULD BE SET ASIDE AND THE MATTER SHOULD BE RESTOR ED BACK TO THE FILE OF THE ASSESSING OFFICER FOR MAKING ASSESSMENT AFRESH AFTE R BRINGING LEGAL REPRESENTATIVES OF THE ASSESSEE ON RECORD. 4. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE A ND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL AVAILA BLE ON RECORD. WE FIND THAT IN THE INSTANT CASE, THE ASSESSMENT ORDER WAS PASSED ON LATE SHRI AKHTER NOORUDDINAHMED SAIYED U/S. 143(3) OF THE ACT ON 21.11.2011, AND THEREAFTER, THE CIT(A) PASSED THE APPELLATE ORDER O N 27.12.2012. ACCORDING TO THE DEATH CERTIFICATE OF SHRI AKHTER NOORUDDINAH MED SAIYED FILED BEFORE US BY THE DEPARTMENTAL REPRESENTATIVE, THE ASSESSEE HAD EXPIRED ON 29.12.2009 WHICH WAS MUCH BEFORE THE DATE OF PASSIN G OF THE ASSESSMENT ORDER. 5. IT MAY BE RECALLED THAT IN THE CASE OF ELLIS C. REID V. CIT 5 ITC 100 THE BOMBAY HIGH COURT HAD HELD THAT WHERE A PER SON DIED AFTER THE COMMENCEMENT OF THE ASSESSMENT YEAR BUT BEFORE HIS INCOME OF THE PREVIOUS YEAR WAS ASSESSED, HIS EXECUTOR WAS NOT LI ABLE TO PAY THE TAX AND ITA NO. 837/AHD/2013 SH. AKHTER NOORUDDIN AHMED SAIYED VS. ITO, WARD-1, VAPI FOR A.Y. 2009-10 - 3 - THAT IF THE DEATH OCCURRED WHILE ASSESSMENT PROCEED INGS WERE PENDING, THE PROCEEDINGS COULD NOT BE CONTINUED AND THE ASSESSME NT COULD NOT BE MADE AFTER THE PERSON'S DEATH: THIS VIEW OF THE BOMBAY H IGH COURT LED THE LEGISLATURE TO INTRODUCE SECTION 24B IN THE1922 ACT IN 1933. SECTION 24B CORRESPONDS TO SECTION 159 OF THE PRESENT ACT. THE RELEVANT PART OF SECTION 159 READS AS UNDER:- 159. (1) WHERE A PERSON DIES, HIS LEGAL REPRESENTAT IVE SHALL BE LIABLE TO PAY ANY SUM WHICH THE DECEASED WOULD HAVE BEEN LIAB LE TO PAY IF HE HAD NOT DIED, IN THE LIKE MANNER AND TO THE SAME EX TENT AS THE DECEASED. (2) FOR THE PURPOSE OF MAKING AN ASSESSMENT (INCLUD ING AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SEC TION 147) OF THE INCOME OF THE DECEASED AND FOR THE PURPOSE OF LEVYI NG ANY SUM IN THE HANDS OF THE LEGAL REPRESENTATIVE IN ACCORDANCE WIT H THE PROVISIONS OF SUB-SECTION (1)- (A) ANY PROCEEDING TAKEN AGAINST THE DECEASED BEFOR E HIS DEATH SHALL BE DEEMED TO HAVE BEEN TAKEN AGAINST THE LEGAL REPR ESENTATIVE AND MAY BE CONTINUED AGAINST THE LEGAL REPRESENTATIVE F ROM THE STAGE AT WHICH IT STOOD ON THE DATE OF THE DEATH OF DECEASED ; (B) ANY PROCEEDING WHICH COULD HAVE BEEN TAKEN AGAI NST THE DECEASED IF HE HAD SURVIVED, MAY BE TAKEN AGAINST THE LEGAL REPRESENTATIVE; AND (C) ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACCO RDINGLY. (3) THE LEGAL REPRESENTATIVE OF THE DECEASED SHALL, FOR THE PURPOSES OF THIS ACT, BE DEEMED TO BE AN ASSESSEE. ITA NO. 837/AHD/2013 SH. AKHTER NOORUDDIN AHMED SAIYED VS. ITO, WARD-1, VAPI FOR A.Y. 2009-10 - 4 - A STUDY OF SUB-SECTION (1) OF SECTION 159 CLEARLY S HOWS THAT IT IS BY A LEGAL FICTION CREATED IN THE PROVISION THAT THE LEGAL REP RESENTATIVE OF A DECEASED PERSON HAD BEEN MADE LIABLE TO PAY ANY SUM WHICH TH E DECEASED WOULD HAVE BEEN LIABLE TO PAY IF HE HAD NOT DIED, IN THE LIKE MANNER AND TO THE SAME EXTENT AS THE DECEASED. THE LEGAL REPRESENTAT IVE OF THE DECEASED, AS HAS BEEN LAID DOWN IN SUB-SECTION (3) OF SECTION 15 9 ARE, BY SUCH LEGAL FICTION, DEEMED TO BE THE ASSESSEES. SUB-SECTION (2 ) OF SECTION 159 LAYS DOWN THE CONDITIONS OF APPLICABILITY OF THE PROVISI ONS OF SECTION 159. CLAUSE (A) OF SUB-SECTION (2) SAYS THAT ANY PROCEEDINGS TA KEN AGAINST THE DECEASED BEFORE HIS DEATH SHALL BE DEEMED TO HAVE BEEN TAKEN AGAINST THE LEGAL REPRESENTATIVE AND MAY BE CONTINUED AGAINST THE LEG AL REPRESENTATIVE FROM THE STAGE AT WHICH IT STOOD ON THE DATE OF THE DEAT H OF THE DECEASED. FOR THE APPLICABILITY OF THIS CLAUSE THE PROCEEDINGS FOR MA KING AN ASSESSMENT OR FOR THE PURPOSE OF LEVYING ANY SUM SHOULD HAVE BEEN TAK EN AGAINST THE DECEASED IN HIS LIFETIME AND THESE WOULD BE SUCH PR OCEEDINGS WHICH MAY BE CONTINUED AGAINST THE LEGAL REPRESENTATIVE FROM THE STAGE AT WHICH SUCH PROCEEDINGS STOOD ON THE DATE OF THE DEATH OF THE D ECEASED. CLAUSE (B) OF SUB-SECTION (2) SAYS THAT ANY PROCEEDINGS WHICH COU LD HAVE BEEN TAKEN AGAINST THE DECEASED IF HE HAD SURVIVED MAY BE TAKE N AGAINST THE LEGAL REPRESENTATIVE. THIS CLAUSE OBVIOUSLY DEALS WITH TH E SITUATION WHERE THE PROCEEDINGS ARE CONTEMPLATED TO BE TAKEN AGAINST TH E ESTATE OF THE DECEASED AFTER HIS DEATH. SINCE THE LEGAL REPRESENT ATIVE OF THE DECEASED REPRESENTS HIS ESTATE SUCH PROCEEDINGS MAY BE TAKEN AGAINST THEM. THE STUDY OF THESE PROVISIONS CLEARLY BRINGS US TO HOLD THAT ONLY THOSE PROCEEDINGS FOR MAKING ASSESSMENT OR LEVYING ANY SU M MAY BE TAKEN AGAINST THE DECEASED, SO THAT THEY MAY BE CONTINUED AFTER HIS DEATH, WHICH HAVE BEEN TAKEN IN HIS LIFETIME. IN HIS LIFETIME SU CH PROCEEDINGS WOULD NECESSARILY BE TAKEN AGAINST AND IN THE NAME OF THE DECEASED. HOWEVER, IF THE DECEASED HAD DIED BEFORE ANY SUCH PROCEEDINGS C OULD HAVE BEEN TAKEN AGAINST HIM, THE PROCEEDINGS MAY BE TAKEN AGAINST T HE LEGAL REPRESENTATIVE ITA NO. 837/AHD/2013 SH. AKHTER NOORUDDIN AHMED SAIYED VS. ITO, WARD-1, VAPI FOR A.Y. 2009-10 - 5 - OF THE DECEASED UNDER THE PROVISIONS OF SUB-CLAUSE (B) OF SUB-SECTION (2) OF SECTION 159. IT IS CLEARLY INFERRED THAT ASSESSMENT UNDER THE ACT CAN ONLY BE MADE AGAINST AN INDIVIDUAL ASSESSEE WHO MUST BE A L IVING PERSON. 6. IN THE CASE OF CIT V. AMARCHAND N. SHROFF [1963 ] 48 ITR 59 THE SUPREME COURT HELD THAT THE INDIVIDUAL HAS ORDINARI LY TO BE A LIVING PERSON AND THERE COULD BE NO ASSESSMENT ON A DEAD PERSON. WITH REGARD TO THE LEGAL FICTION, AS HAS BEEN CREATED UNDER SECTION 15 9 OF THE ACT, THEIR LORDSHIPS OF THE SUPREME COURT REFERRING TO THEIR E ARLIER DECISION IN THE CASE OF BENGAL IMMUNITY CO. LTD. V. STATE OF BIHAR (SIC. ) OBSERVED THAT LEGAL FICTIONS ARE ONLY FOR A DEFINITE PURPOSE FOR WHICH THEY ARE CREATED AND SHOULD NOT BE EXTENDED BEYOND THAT LIMITED FIELD. THE SAME PRINCIPLE WAS REITERATED BY THE SUPREME COURT IN THE CASE OF FIRST ADDL. ITO V. MRS. SUSEELA SADANANDAN [1965] 57 ITR 168 WHERE IT WAS HELD THAT ON THE DEATH OF A PERSON THE INCOME-TAX OFFICER HAS TO PROCEED AGAINS T THE EXECUTOR AND/OR LEGAL REPRESENTATIVE OF THE DECEASED. THE PROPOSITI ON LAID DOWN BY THE SUPREME COURT IN THE ABOVE CASES WAS FOLLOWED BY TH E CALCUTTA HIGH COURT IN THE CASE OF CIT V. SHANTILAL C. MEHTA [1978] 113 ITR 79 WHERE IT WAS HELD THAT ON THE DEATH OF AN ASSESSEE, HIS ESTATE REMAIN S LIABLE FOR PAYMENT OF TAXES ACCRUING BOTH BEFORE AND AFTER HIS DEATH. AFT ER THE DEATH OF THE ASSESSEE, THE ASSESSMENT PROCEEDINGS CAN ONLY CONTI NUE IN THE NAME OF HIS LEGAL REPRESENTATIVE. THE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT V. C.V. RAGHAVA REDDY [1984] 148 ITR 385 FOLLOWING THE SAME PRINCIPLE HELD THAT UNDER SECTION 159 A PROCEEDING COULD BE CONTIN UED AGAINST THE LEGAL REPRESENTATIVE OF THE DECEASED ASSESSEE ONLY IF IT HAD BEEN INITIATED WHEN THE ASSESSEE WAS ALIVE. IT IS THUS WELL SETTLED THA T AN ASSESSMENT MADE ON A DEAD PERSON WOULD, ON THE FACE OF IT, BE A NULLITY IN LAW. 10. IN THE INSTANT CASE, THE DEPARTMENTAL REPRESEN TATIVE COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT THE IMPUG NED ASSESSMENT ORDER WAS PASSED AFTER ISSUING ANY NOTICE TO THE LEGAL RE PRESENTATIVE OF THE ITA NO. 837/AHD/2013 SH. AKHTER NOORUDDIN AHMED SAIYED VS. ITO, WARD-1, VAPI FOR A.Y. 2009-10 - 6 - DECEASED INDIVIDUAL. THEREFORE, IN OUR CONSIDERED VIEW, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. WE, THEREFORE, DI SMISS THE SAME. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 23 RD OF MAY, 2014 AT AHMEDABAD. SD/- SD/- (G.C. GUPTA) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 23/05/2014 GHANSHYAM MAURYA, SR. P.S. TRUE COPY &4 &4 &4 &4 / ,5 6&53 / ,5 6&53 / ,5 6&53 / ,5 6&53/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. ,-)* / THE RESPONDENT. 3. ## 7 / CONCERNED CIT 4. 7() / THE CIT(A)-III, AHMEDABAD 5. 5': ,$ , , / DR, ITAT, AHMEDABAD 6. ;< =. / GUARD FILE. &4$ &4$ &4$ &4$ / BY ORDER, / // / # # # # ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD