ITO WARD-44(6), NEW DELHI, NEW DELHI V. HARSH ARORA, DELHI

ITA 902/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against an order of the Commissioner of Income Tax (Appeals) concerning the assessment year 2015-16. The appeal was initially filed in the name of Harsh Arora, who had passed away before the order was issued. The legal representatives of Harsh Arora argued that the appeal against a deceased person is void. The Department's representative suggested remanding the case for fresh adjudication to ensure justice and fair play. The Tribunal, referencing decisions from the Delhi and Madras High Courts, set aside the previous orders and remanded the case back to the CIT(A) to be decided afresh with the legal representative on record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396682 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: Deepak Chhabra v. ITO, Ramesh M. Mehta v. Asstt. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RAJEEV SAXENA
• Keywords: Set aside

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.902/DEL/2024 (ASSESSMENT YEAR: 2015-16) Income Tax Officer, Ward 44(6), Room No. 1808, E-2 Block, Civic Centre, New Delhi-110026 Vs. Shri Harsh Arora, 38-C, Road No. 73, West Punjabi Bagh, New Delhi-110002. PAN: AAJPA1520C (Appellant) (Respondent) Assessee by Shri Rajeev Saxena, Adv. Ms. Sumangla Saxena, Adv. and Shri Dishant Sethi, Adv. Department by Shri Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 29/05/2025 Date of Pronouncement 29/05/2025 O R D E R PER MANISH AGARWAL, AM: This appeal is filed by the revenue against the order of ld. Commissioner of Income Tax [CIT(A), in short], National Faceless Appeal Centre (NFAC) dt. 19.01.2024 in appeal No. CIT(A), Delhi- 14/10140/2017-18 for Assessment Year 2015-16 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short). 2. At the time of hearing, the ld. counsel for the assessee, vide letter dated 29th May, 2025, placed on record, submitted that the revenue has filed the appeal in the name of assessee Harsh Arora who had expired on 04.09.2019 i.e. prior to the date when the impugned order was passed by the ld. CIT(A). He further submitted that the necessary action was already taken for bringing the legal representative (LR) on record in IT portal, and copy of the same is also produced before us. It is, therefore, submitted by the ld. AR that the appeal filed by the revenue against the dead person is void and thus not maintainable and deserves to be dismissed. 2 ITA No. 902/Del/2024 ITO Vs. Harsh Arora 3. On the other hand, ld. Sr. DR submitted that the ld. CIT(A), NFAC has decided the appeal in the name of the deceased assessee and the assessee has not objected to the said order as the same was in the favour of assessee. He, therefore, submits that in the interest of justice and fair play to both parties, the case may be sent back to ld. CIT(A) for fresh adjudication after imputing the legal heir on record. 4. After considering the arguments from both the parties, we find that the assessee expired on 13.01.2024 and the necessary action was taken in IT portal however, the same is merely a procedure to replace the deceased assessee for making further compliance pertaining to the deceased assessee. In case where any appellate proceedings are pending/under process, LR as defined in section 2(29) of the Act must be imputed on record. Section 2(11) of Code of Civil Procedure, read with section 2 (29) of the Income Tax Act, states that 'legal representative' means a person who in law represents the estate of a deceased person. 5. Section 159 of the Income Tax Act provides that: (i) LR would be liable for the tax dues of the deceased, ( ii) for making assessment or reassessment (in respect of income of the deceased) or for levying any tax (on the income of the deceased), LR would be deemed assessee, (iii) proceedings may be continued against LR from the stage at which it stood on the date of the death of the deceased, (iv) all the provisions of the Act will be applicable against the LR., (v) Liability of LR will be limited to the extent of estate of the deceased. Thus, LR would be a deemed assessee on behalf of the deceased. Therefore, where an individual dies, during appellate proceedings, then necessary information to the appellate authority, along with the death certificate and names and addresses of all the legal heirs must be given. Besides, revised Form 35 duly signed by the LR as defined in section 2(29) of the 3 ITA No. 902/Del/2024 ITO Vs. Harsh Arora Act needs to be filed before the appellate authorities which has not been done in the present case. 6. The Hon’ble jurisdictional high court in case of Deepak Chhabra v. ITO reported in [2006] 154 TAXMAN 215 (Delhi) where the assessee died during the pendency of appeal before Tribunal and the Tribunal has passed the order on dead person has set aside the matter for fresh consideration after taking legal representative on records. The relevant observations of the hon’ble court are as under: “6. The material facts disclosed before us are not disputed. It is not denied that the deceased assessed had passed away during the pendency of the appeal before the Tribunal. It is also not in dispute that the factum of his death was placed on record by Mr. Manjani, counsel appearing for the appellant. So much so, the particulars of the LRs left behind by the deceased were also given and a prayer for substitution of one of them as a respondent made in the appeal. It is also common ground that the Tribunal did not notice the said application or made any order of substitution for final disposal of the appeal. The disposal of the appeal by the order impugned in IT Appeal No. 201 of 2005 was on the assumption that the deceased was alive, which assumption was factually erroneous. In the circumstances, therefore, the judgment does appear to have been rendered against a dead person and has to be treated as a nullity. The question, however is, whether there is any legal impediment in rectifying the error by making a proper order of substitution in the present appeal which is a continuation of the proceedings before the Tribunal. Both Mr. Manjam and Mr. Jolly, were agreeable to an order of substitution being made and the matter remanded back for fresh hearing in accordance with law. In the circumstances therefore, and keeping in view the fact that Mr. Manjani has offered to appear for not only Mr. Deepak Chhabrathe appellant, but also the other legal representative, Dr. Smt. Sheetal Jhamb, we direct as under: (i) The impugned order passed by the Tribunal is set aside. (ii) Shri Deepak Chhabra and Dr. Smt. Sheetal Jhamb shall stand substituted in place of the deceased assessed as his legal representatives in the appeal before the Tribunal. 4 ITA No. 902/Del/2024 ITO Vs. Harsh Arora (iii) The matter shall stand remanded back to the Tribunal for a fresh hearing and disposal in accordance with law. 7. The Hon’ble Madras High court in the case of Ramesh M. Mehta v. Asstt. CIT reported in [2014] 41 taxmann.com 76 (Madras) under identical facts has held as under: “6.A reading of the 'Will' left by the deceased Ramesh M. Mehta shows that the deceased had appointed Mr. Navin Mansukhlal Mehta and Mr. Nilesh Ramesh Mehta, sons of the deceased as executors of 'Will' and proceedings have been initiated before the Bombay High Court for probating the 'Will'. In the background of Section 159 of the Income Tax Act, when the deceased had appointed the appellant namely Nilesh R. Mehta as the executor along with yet another person namely Naveen Shuklal Mehta, the said executors are competent enough to represent the estate of the deceased. The Trust was created by the deceased only under the 'Will'. Since the assessee Ramesh M. Mehta was not alive on the date when the order of the Commissioner of Income Tax was made and that the order cannot stand in the name of a dead person, we feel that in fitness of things the order of Income Tax Appellate Tribunal needs to be set aside, so too the order of the Commissioner of Income Tax (Appeals). Since the assessment order had been passed prior to the date of the death of the deceased, further filing of the appeal by the deceased assessee was rightly done by the assessee. However, on the date of the order passed by the Commissioner of Income tax (Appeals) i.e. on 21.8.2012, the assessee was not alive and he having died on 03.12.2011, the proper course herein would be to set aide those orders of the Commissioner of Income Tax (Appeals) as well as the Income Tax Appellate Tribunal and to remand the matter back to the file of the Commissioner of Income Tax (Appeals) to pass orders in accordance with law. Accordingly, the orders of Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal are set aside and the matter is remanded to the files of Commissioner of Income Tax (Appeals). The present appellant is hereby directed to take necessary steps to file a petition, bring the facts before the Commissioner of Income Tax (Appeals) so on to enable the Commissioner of Income Tax (Appeals) to pass orders on the right person representing the estate of the deceased. Thereafter, it is open to the executors to pursue the appeal remedy, if they are so advised, before the Income Tax Appellate Tribunal. 8. In view of these facts and by following the order of hon’ble high courts in above stated cases, we remand the matter back to the file of ld. CIT(A) to decide the appeal a fresh after taking on record the fact of the death of the assessee appellant. We further direct to the family members of the assessee to file revised Form 35 in accordance with law after inputting the legal representative so that the order could be passed on the right person. With these 5 ITA No. 902/Del/2024 ITO Vs. Harsh Arora directions, appeal of the revenue is partly allowed for statistical purposes. Order pronounced in open court on 29/05/2025. Sd/- Sd/- Sd/- Sd/- (SATBEER SINGH GODARA) (MANISH AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30/05/2025 PK/Sr. Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "