LATE RAMCHANDRA WAMAN KHAMBETE ,MUMBAI V. I.T.O -42(3)(2), MUMBAI

ITA 5754/MUM/2024

AI Insights

The case involves an appeal by Ravindra Khambete, the legal heir of the late Ramchandra Waman Khambete, against the order of the Commissioner of Income-tax (Appeals)-4 Kolkata for the assessment year 2014-15. The primary contention was the legality of the reassessment order issued in the name of a deceased person and the subsequent additions made under various sections of the Income-tax Act, 1961. The tribunal examined whether the reassessment and the additions were legally tenable, considering the procedural lapses in addressing the legal heir post the assessee's death.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474423 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Assessment Year: 2014-2015
• Other Referred Cases: NTPC vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN UNAVEKAR
• Assessee Lawyers: ASHUTOSH PATARE
• Keywords: Reassessment proceedings; Unexplained cash credit; Reopening of assessment
• Section: 148; 144; 143(3); 142(1); 68; 56(2)(vii)(b)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “K (SMC)” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) ITA No. 5754/MUM/2024 Assessment Year: 2014-15 Ravindra Khambete Legal Heir of Late Ramchandra Waman Khambete, 103, Anuradha Building, Amrutkumbh Sahaniwas, B.S. Road, Dadar, Mumbai-400028. Vs. ITO-42(3)(2), Kautilya Bhavan, Bandra Kurla Complex, Bandra (East), Mumbai-400051. PAN NO. ADYPK 9695 E Appellant Respondent Assessee by : Mr. Ashutosh Patare Revenue by : Mr. Kiran Unavekar, Sr. DR Date of Hearing : 02/04/2025 Date of pronouncement : 04/04/2025 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the legal heir on behalf of the assessee against the order of the Ld. Commissioner of Income- tax (Appeals)-4 Kolkata [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds: 1. Ld. CIT(A) erred in confirming the action of Ld AO of issuing notice of reopening of assessment deceased person and completing the assessment. 2. Ld. CIT(A) erred in confirming the action of Ld. AO in adding Rs. 7,96,175/ the difference between stamp duty valuation and the agreement 2. Before us, additional ground assessee, which are reproduced as under: 1. The Assessment Order passed u/s. 144 r.w.s. 147 of the Act dated 02.12.2019 is without DIN Number and therefore the assessment order passed is bad in law. 2. The Asses dated 02.12.2019 is passed in the name of the deceased person and therefore 3. The additional ground raised not requiring investigation of the fresh fact, sam adjudication in view of ratio laid down in Supreme Court in case of NTPC reported in 229 ITR 383. 4. Briefly stated facts of the case are that was filed by the assessee on 18.06.2014 declarin Rs.3,26,370/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment order passed u/s 143 30.12.2016, the Assessing Officer made addition of Rs.14,11,000/ as unexplained cash credit u/s 68 of the Act and computed the tax liability under normal provisions of the Act. Subsequently, it was noticed that the addition u/s 68 of Late Ramchandra Waman Khambete ITA No. 5754/MUM/2024 Ld. CIT(A) erred in confirming the action of Ld AO of issuing notice of reopening of assessment u/s 147 to a deceased person and completing the assessment. Ld. CIT(A) erred in confirming the action of Ld. AO in adding Rs. 7,96,175/- u/s 56(2)(vii)(b) of the act being the difference between stamp duty valuation and the agreement value. dditional grounds have been filed on behalf of the which are reproduced as under: The Assessment Order passed u/s. 144 r.w.s. 147 of the Act dated 02.12.2019 is without DIN Number and therefore the assessment order passed is bad in law. The Assessment Order passed u/s. 144 r.w.s. 147 of the Act dated 02.12.2019 is passed in the name of the deceased person and therefore is bad in law. The additional ground raised being purely legal in nature not requiring investigation of the fresh fact, same are view of ratio laid down in decision of the Hon’ble Supreme Court in case of NTPC reported in 229 ITR 383. Briefly stated facts of the case are that the return of income was filed by the assessee on 18.06.2014 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied with. In the assessment order passed u/s 143(3) of the Act dated 30.12.2016, the Assessing Officer made addition of Rs.14,11,000/ as unexplained cash credit u/s 68 of the Act and computed the tax liability under normal provisions of the Act. Subsequently, it was noticed that the addition u/s 68 of the Act should have been Late Ramchandra Waman Khambete 2 ITA No. 5754/MUM/2024 Ld. CIT(A) erred in confirming the action of Ld AO of u/s 147 to a deceased person and completing the assessment. Ld. CIT(A) erred in confirming the action of Ld. AO in u/s 56(2)(vii)(b) of the act being the difference between stamp duty valuation and the been filed on behalf of the The Assessment Order passed u/s. 144 r.w.s. 147 of the Act dated 02.12.2019 is without DIN Number and therefore the sment Order passed u/s. 144 r.w.s. 147 of the Act dated 02.12.2019 is passed in the name of the deceased legal in nature and are admitted for decision of the Hon’ble Supreme Court in case of NTPC reported in 229 ITR 383. return of income g total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied (3) of the Act dated 30.12.2016, the Assessing Officer made addition of Rs.14,11,000/- as unexplained cash credit u/s 68 of the Act and computed the tax liability under normal provisions of the Act. Subsequently, it was the Act should have been subjected to special rate of u/s 115BBE of the Act and therefore, after recording reason a notice u/s 148 of the Act dated 05.03.2019 was issued in the case of the assessee and subsequent issued. In response to submitted that the assessee Shri Ramchandra Waman Khambete had passed away on 14.11.2018. Despite intimation by the legal heir regarding demise of the assessee, th to complete the assessment in the hands of the assessee after making addition of Rs.70.96,175/ heir of the assessee before the Ld. CIT(A) was 5. Before us, the Ld. counsel for the additional ground challenging deceased person. The Ld. counsel for the assessee has brought to our attention that not only notice u/s 148 of the Act was issued on the deceased person passed by the AO on that the legal heir has also intimated to the Assessing Officer regarding death of the assessee and despite then Assessing Officer has passed the order bad-in-law. The AO was required to bring the legal heir of the assessee on record and accordingly the estate of deceased person should have been subject to reassessment through legal heir, but, the AO didn’t do the Late Ramchandra Waman Khambete ITA No. 5754/MUM/2024 subjected to special rate of u/s 115BBE of the Act and therefore, after recording reasons to believe that income escaped assessment, notice u/s 148 of the Act dated 05.03.2019 was issued in the case of the assessee and subsequent notices u/s 142(1) were also issued. In response to notices, the legal heir of the assessee submitted that the assessee Shri Ramchandra Waman Khambete had passed away on 14.11.2018. Despite intimation by the legal heir regarding demise of the assessee, the Assessing Officer went to complete the assessment in the hands of the assessee after making addition of Rs.70.96,175/-. The appeal filed by the legal heir of the assessee before the Ld. CIT(A) was also dismissed. Before us, the Ld. counsel for the assessee referred to the additional ground challenging the assessment order passed on deceased person. The Ld. counsel for the assessee has brought to our attention that not only notice u/s 148 of the Act was issued on the deceased person but the reassessment order has also been AO on deceased person which is bad in law. The fact that the legal heir has also intimated to the Assessing Officer regarding death of the assessee and despite then Assessing Officer has passed the order on non-existent person, which is invalid and law. The AO was required to bring the legal heir of the assessee on record and accordingly the estate of deceased person should have been subject to reassessment through legal heir, but, the AO didn’t do the same. Therefore, we quash the reassessment Late Ramchandra Waman Khambete 3 ITA No. 5754/MUM/2024 subjected to special rate of u/s 115BBE of the Act and therefore, s to believe that income escaped assessment, notice u/s 148 of the Act dated 05.03.2019 was issued in the case notices u/s 142(1) were also the legal heir of the assessee submitted that the assessee Shri Ramchandra Waman Khambete had passed away on 14.11.2018. Despite intimation by the legal e Assessing Officer went on to complete the assessment in the hands of the assessee after . The appeal filed by the legal dismissed. assessee referred to the order passed on deceased person. The Ld. counsel for the assessee has brought to our attention that not only notice u/s 148 of the Act was issued on ment order has also been deceased person which is bad in law. The fact that the legal heir has also intimated to the Assessing Officer regarding death of the assessee and despite then Assessing Officer person, which is invalid and law. The AO was required to bring the legal heir of the assessee on record and accordingly the estate of deceased person should have been subject to reassessment through legal heir, but, the reassessment proceedings in the case of the assessee. becomes infructuous. 6. In the result, the appeal of the assessee stands allowed. Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 04/04/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Late Ramchandra Waman Khambete ITA No. 5754/MUM/2024 proceedings in the case of the assessee. Thus, the present appeal becomes infructuous. In the result, the appeal of the assessee stands allowed. nounced in the open Court on 04/04/2025. Sd/- Sd/ HAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Late Ramchandra Waman Khambete 4 ITA No. 5754/MUM/2024 he present appeal In the result, the appeal of the assessee stands allowed. /04/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "