PRASHANT GARG (L/H OF LATE SHRI PEEYUSH KUMAR),GHAZIABAD V. ITO,NFAC, DELHI

ITA 5146/DEL/2024

AI Insights

This case involves an appeal by Sh. Prashant Garg against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the assessment made by the Income Tax Officer (ITO) for the assessment year 2018-19. The ITO had assessed the income of the appellant at Rs. 1,01,44,668 as opposed to the declared income of Rs. 30,81,790, citing non-compliance and insufficient evidence to substantiate the claimed interest expenditure of Rs. 70,62,878 under section 57 of the Income Tax Act. The CIT(A) dismissed the appeal ex-parte, leading to the current appeal before the ITAT. A significant legal issue was the validity of the order passed on a deceased person, as the appeal was signed by a legal heir, which the ITAT found to be a ground for setting aside the order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471804 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA GUPTA
• Assessee Lawyers: PARTH SINGHAL
• Keywords: Set aside; Opportunity of being heard; Reasonable cause
• Section: 143(3); 142(1); 143(2)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘F’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, HON’BLE ACCOUNTANT MEMBER ITA No. 5146/Del/2024 Asstt. Year : 2018-19 SH. PRASHANT GARG VS. INCOME TAX OFFICER, (LEGAL HEIR OF LATE SHRI NATIONAL E-ASSESSMENT PEEYUSH KUMAR, GHAZIABAD) CENTRE, DELHI / 119, BAGH BHATIARI GT ROAD, ITO, WARD 2(2)(1), GHAZIABAD-201001 GHAZIABAD UTTAR PRADESH (PAN: AOFPG7849L) (Appellant) (Respondent) Appellant by : Shri Parth Singhal, Adv. Respondent by : Smt. Amisha Gupta, CIT(DR) Date of Hearing 27.02.2025 Date of Pronouncement 27.02.2025 ORDER PER MAHAVIR SINGH, VICE PRESIDENT : This appeal has been filed by the Assessee against the order dated 31.7.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi on the following grounds:- 1. That the Ld. CIT(A), NFAC Delhi has erred both in law and on facts in upholding the determination of income made by the AO 2 | P a g e of the appellant at Rs. 1,01,44,668/- as against declared income of Rs. 30,81,790/- by the appellant in an order of assessment dated 8.4.2021 u/s. 143(3) of the Act. 2. That the impugned order has been made on a dead person despite the fact that the Form No. 35 has been signed by the legal heir verified and therefore, the aforesaid order is illegal, invalid and void-ab-intio and therefore nullity. 3. That the Ld. CIT(A) has also erred both in law and on facts in disposing off the appeal exparte without granting any fair opportunity of being heard to the appellantThat the action taken u/s. 143(3) r.w.s. 143(3A) and 143(3B) of Act and consequent assessment framed, as upheld by the CIT(A) is vitiated, without jurisdiction and contrary to law. 3.1 That the finding that notices remained un-complied during the appellate proceedings is not based on correct appreciation of facts and circumstances of the case of the appellant and hence could not have been made a ground to deny an effective opportunity of being heard. 4. That the Ld. CIT(A) has grossly erred both in law and on facts in sustaining disallowance of Rs. 70,62,878/- representing expenditure incurred on interest u/s. 57 of the Act. 3 | P a g e 5. That the Ld. CIT(A) has further erred both in law and on facts in upholding the levy of interest of Rs. 1,73,705/- u/s. 234A of the Act, interest of Rs. 9,18,165/- u/s. 234 of the Act and u/s. 234F of the Act which are not leviable of the facts and circumstances of the case of the appellant. Prayer It is therefore, prayed that order made on a dead person may kindly be quashed as such. It is further prayed that, it be held that order disposing of the appeal exparte by the CIT(A) be set aside. It is further prayed that assessment made by the AO and sustained by the Ld. CIT(A) deserves to be quashed as such. It is also prayed that, disallowance made and sustained alongwith interest levied may kindly be deleted and, appeal of the appellant be allowed. 2. At the outset, it is noticed that there is a delay of 07 days in filing the appeal before the Tribunal. After hearing both the sides and perusing the records, we are of the considered view that the reasonable cause for the same has been attributed, hence, we condone the delay in dispute. 3. The brief facts of the case are that assessee e-filed the return of income on 27.3.2019 by declaring a total income of Rs. 30,81,790/-. The case was selected for limited scrutiny under CASS for the reason “large deduction claimed u/s. 57” Accordingly, notice u/s. 143(2) was issued on 22.9.2016 and was duly served upon the assessee. Further notices u/s. 142(1) dated 11.11.2020, 18.12.2020, 31.12.2020 4 | P a g e and a show cause notice dated 5.3.2021 were issued calling for details like loan confirmation from the lenders, their ITRs and bank statement etc. During the assessment proceedings, it is noticed by the AO that the assessee claimed the interest expenditure of Rs. 70,62,878/- under section 57 of the Act. Since the assessee failed to prove the satisfaction of the AO that the said interest expenditure has been expended wholly and exclusively for the purpose of earning interest income in terms of section 57(iii) of the Act, hence, the entire claim of interest expenses made by the assessee was disallowed and the income of the assessee was assessed at a total income of Rs. 1,01,44,688/- vide assessment order dated 8.4.2021 passed u/s. 143(3) of the Act. Upon assessee’s appeal, Ld. CIT(A) affirmed the AO’s order by dismissing the appeal of the assessee. Against the aforesaid order, assessee is in appeal before us. 4. At the outset, Ld. Counsel for the assesse submitted that impugned order of the Ld. CIT(A) has been made on a dead person despite the fact that the Form No. 35 has been signed by the legal heir verified and therefore, the said order is illegal, invalid and void-ab-initio and therefore, nullity. Ld. DR did not controvert the aforesaid contention of the Ld. AR. 5. We have heard both the parties and perused the records. After considering the aforesaid factual matrix, we find considerable potency in the contention of the Ld. AR that impugned order of the Ld. CIT(A) has been passed on a dead person despite the fact that the Form No. 35 has been signed by the legal heir viz. Shri Prashant Garg verified and therefore, the said order is illegal, invalid and not 5 | P a g e sustainable in the eyes of law. In view of above and in the interest of justice, we deem it fit and proper to send back the issues in dispute to the file of the Ld. CIT(A) to consider the same afresh and pass a speaking order in the name of Legal Heir Shri Prashant Garg, after giving adequate opportunity of being heard to the assessee, in accordance with law. We hold and direct accordingly. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 27.02.2025. SD/- SD/- (S. RIFAUR RAHMAN) (MAHAVIR SINGH) ACCOUNTANT MEMBER VICE PRESIDENT SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench "