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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’ LUCKNOW
Before: SHRI T.S. KAPOORSmt. Alka Kanodia,
This is an appeal filed by the Revenue against the order of ld. CIT(A)-I, Kanpur dated 19.11.2018. 2. At the outset, the ld. DR invited my attention to application for condonation of delay in filing the appeal and it was submitted that the appeal filed by Revenue relates to the relief given by ld. CIT(A) on account of long term capital gain allegedly earned by assessee on bogus companies and the tax involved in this appeal was less than Rs.20.00 lacs and therefore, the Pr. CIT, Kanpur had not recommended the proposal for filing the appeal before the ITAT on the ground that tax effect involved in this case was less than the monetary limit prescribed by the CBDT. It was submitted that later on CBDT vide Circular dated 06.09.2019 has decided that notwithstanding anything contained in any circular specifying monetary limit for Departmental Appeal before the ITAT, High Courts and Supreme Court appeal may be filed where Board by way of special order direct
filing of appeals on merits in cases involved in organized tax evasion activities and the assessee has earned long term capital gain in such a manner and therefore appeal filing in this case is mandatory and delay has occurred due to further instructions by CBDT and therefore delay has occurred due to circumstances beyond the control of Assessing Officer and in the interest of justice, same may be condoned and appeal be heard on merits. The ld. AR had no objection to condonation of delay in filing the appeal and considering the facts and circumstances of the case the delay was condoned and the ld. DR was directed to proceed with his arguments. 3. The ld. AR at the outset raised a preliminary objection against the filing of appeal by Revenue and submitted that the appeal has been filed on a dead person and it was submitted that the assessee had passed away on 14.12.2018 that is after the passing the order of the dated 19.11.2018 by the ld. CIT(A) and in this respect our attention was invited to copy of death certificate issued by the South Delhi Municipal Corporation placed as Annexure No.III. The ld.AR submitted that the present appeal has been filed on 07.02.2020 on which date the assessee was not alive thus undisputedly the present appeal has been filed against the dead person which is not permissible and reliance in this respect was placed on the judgment of the ITAT, Agra Bench in this case of ITO 4(2), Agra vs. Shri Mukesh Kumar Agarwal in ITA No. 353/Agra/2014 and further reliance was placed on the following judgments of various High Courts: 1. CIT vs. Smt. Santosh Rani in [1996] 219 ITR 301 (M.P.) 2. Alamelu Veerappan vs. ITO, [2018] 95 taxmann.com 155 (Madras) 3. Savita Kapila vs. ACIT, [2020] 118 taxmann.com 46 (Delhi).
3.1 It was submitted that in view of the above facts and circumstances of judicial precedents the appeal filed by the Revenue may be dismissed as not maintainable.
The ld. DR, on the other hand, submitted that the fact of the death of the assessee was not brought to the notice of the Department and therefore, now this argument is not sustainable. It was submitted that the legal heirs of the assessee should have informed the Department about the death of the assessee so that the Department could have brought the legal heir on record and therefore it was argued that the arguments taken by ld. AR are not sustainable and the appeal be heard on merits. 5. In rejoinder, the ld. AR invited my attention to the judgment of the Hon'ble Delhi High Court in the case of Savita Kapila vs. ACIT (Supra) where the Hon'ble Court has held that there is no statutory provision which has cast a duty upon the legal representatives to intimate the factum of death of an assessee to Department and therefore, the notice issued by the Assessing Officer after his death could not have been validly served upon the assessee and therefore, it was submitted that the appeal filed by the Revenue is not maintainable. 6. I have heard the rival parties and gone through the material placed on record. I find that the ld. CIT(A) has passed the order on 19.11.2018 in the name of the assessee and the assessee died on 14.12.2018 as per the death certificate issued by the South Delhi Municipal Corporation, Delhi placed at Annexure No.III in the paper book. The Department has filed the appeal before this Tribunal on 07.02.2020 on which date the assessee was not alive. Thus, undisputedly the present appeal has been filed against the dead person. The ld. DR has argued that since the Department was not aware of the death of the assessee and the legal heirs of the assessee also did not inform the Department, therefore, the Department cannot be faulted for filing the appeal against the dead person. Such a situation has been answered by Hon'ble Delhi High Court in the case of Savita Kapila vs. ACIT (Supra) where the Hon'ble Court has held that in the absence of statutory provision a duty cannot be cast upon the legal representatives to intimate the factum of death of an assessee Department and thus, where Assessing Officer issued a notice to assessee u/s. 148 after his
death and in such a case it could not have been validly served upon the assessee and therefore, such notice was quashed. The relevant findings of Hon'ble Court are below:
“31. In Alamelu Veerappan Vs. The Income Tax Officer, Non Corporate Ward 2(2), Chennai, 2018 (6) TMI 760 - Madras High Court, it has been held by the Madras High Court, "In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application." In Rajender Kumar Sehgal (supra), a Coordinate bench of this Court has held, "This court is of the opinion that the absence of any provision in the Act, to fasten revenue liability upon a deceased individual, in the absence of pending or previously instituted proceeding which is really what the present case is all about, renders fatal the effort of the revenue to impose the tax burden upon a legal representative." THERE IS NO STATUTORY REQUIREMENT IMPOSING AN OBLIGATION UPON LEGAL HEIRS TO INTIMATE THE DEATH OF THE ASSESSEE. 32. This Court is of the view that in the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department. After all, there may be cases where the legal representatives are estranged from the deceased assessee or the deceased assessee may have bequeathed his entire wealth to a charity. Consequently, whether PAN record was updated or not or whether the Department was made aware by the legal representatives or not is irrelevant. In Alamelu Veerappan (supra) it has been held "nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration." 33. The judgment in Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited (supra) offers no assistance to the respondents. In Pr. Commissioner of Income Tax v. Maruti Suzuki India Limited (supra) the Supreme Court was dealing with Section 170 of the Act, 1961 (succession to business otherwise than on death) wherein notice under Section 143(2) of the Act, 1961 was issued to non-existing company. In that case, Department by very nature of transaction was aware about the amalgamation. However, the said judgment nowhere states that there is an obligation upon the legal representative to inform the Income Tax
Department about the death of the assessee or to surrender the PAN of the deceased assessee. The relevant portion of the said judgment is reproduced hereinbelow:- "35. In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. 36 to 38 xxxx xxxx xxxx xxxx 39. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment. 34. Consequently, the legal heirs are under no statutory obligation to intimate the death of the assessee to the revenue.” 7. In view of the above, the appeal filed by the Revenue is not maintainable and therefore is dismissed. In the result, appeal filed by the Revenue is dismissed. 8.
(Order pronounced in the open court on 07/07/2021) Sd/- (T.S. Kapoor) Accountant Member Aks – Dtd. 07/07/2021
Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order Assistant Registrar