LATE KHIMJIBHAI G. GEDIA,MUMBAI vs. CIT,CENTRAL CIRCLE-13, MUMBAI

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ITA 2172/MUM/2022Status: DisposedITAT Mumbai22 February 2023AY 2006-077 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that assessment proceedings initiated and orders passed in the name of a deceased person, especially when notices under section 153C were issued to the deceased, are invalid and unenforceable. The participation of the legal heir does not cure this defect.

What were the facts?

A search and seizure action was conducted, and subsequently, notices under section 153C were issued in the name of the deceased assessee, Shri Khimjibhai Gedia, for assessment years 2004-05 to 2007-08. The assessee had passed away before the search and seizure action took place.

What were the issues?

Whether assessment proceedings and notices issued under section 153C in the name of a deceased person are valid. Whether the participation of a legal heir cures the defect of issuing notices to a dead person.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(6)Show list

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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM & SHRI PAVAN KUMAR GADALE, JM

For Appellant: Shri Ketan Vajani, CA
For Respondent: Dr. Pallavi Darade, CIT DR
Hearing: 12.12.2022Pronounced: 22.02.2023

Heard together (2 matters)

ITA No. 2171/MUM/2022
ITA No. 2173/MUM/2022

Read from the judgment's own cause title. This page is filed under one of them.

1.

These are 4 appeals pertaining to same assessee one Late Shri Khimjibhaiji Gedia filed by his legal heir Smt rasilaben Khimjibhai Gedia for A.Y. 2004-

2.

The assessee is aggrieved with that and has preferred appeal before us through the legal heirs Smt. Rasilaben Khimji Gedia of the assessee.

3.

The brief facts of the case shows that i. Shri Khimjibhai Gedia expired on 22.01.2007.

ii. search and seizure action u/s. 132 and survey action u/s. 133A were carried out in case of Gedia Group on 25.08.2009. iii. Several documents were seized containing evidence of cash loan and interest. Some of the documents pertained to the assessee for the relevant assessment year. iv. Accordingly, notices u/s. 153C were issued in the name of late Shri Khimjibhai G Gedia. v. For A.Y. 2004-05 to the original return was filed by the assessee on 02.08.2004 at a total income of ₹ 1,16,569/-. vii. During the course of assessment proceedings, the undisclosed bank accounts were also found. Undisclosed cash loans were also found. viii. The ld. AO also raised several query letters and final show cause notice. However, there was no response.

4.

Therefore, the ld. AO passed order u/s. 143(3) r.w.s. 143C of the Act on 30.11.2011 in the name of Late Shri. Khimjibhaiji Gedia, (legal heir Smt. Rasilalben Khimjiibhai Gedia) the total income of the assessee was computed at ₹ 1,62,57,504/-.

5.

The assessee aggrieved preferred an appeal before the ld.CIT (A) raising the first ground that assessment made on a dead person deserves to be quashed. On the merits several ground were taken. The appeal was filed by wife of the assessee has legal heir.

6.

Similarly, for A.Y. 2005-06 the assessment order u/s. 143(3) r.w.s. 153C was passed on 31.11.2011 declaring total income at ₹60,07,420/-. For A.Y. 2006-07 the assessment order was passed on 30.11.2011 determining total income of the assessee

7.

The appeals filed by the assessee before the CIT (A) 37 earlier were disposed off on technical issues. That order was challenged before the ITAT and ITAT set aside the orders back to the file of the ld.CIT (A) and thereafter the ld.CIT (A) passed order on 24.04.2022 where this additional ground was raised.

8.

The ld.CIT(A) rejected this ground vide paragraph 5.1 of order without giving any reason however, in paragraph no. 6.1.2 of his order he held that the appellant has never communicated to AO about the

9.

The ld AR submitted a paper book in two volumes containing 103 pages. He submitted that Mr. Khimjibhai Gedia passed away on 22.01.2007, which is evidenced by the Death Certificate placed on Page No. 1. The notice was issued on 24.02.2010 for the respective assessment years in the name of Mr. Khimjibhai Gedia. The search took place on 25.08.2009. Therefore, the assessee in whose name the orders have been passed was not alive. Therefore, the whole proceeding in all these four assessment years deserves to be quashed. He submitted that there could not be an assessment order or even the initiation of assessment proceedings in case of a dead person.

10.

The ld. DR vehemently supported the order of the AO.

11.

We have carefully considered the rival contention. In the present case, search took place when the assessee was not alive. The notices u/s. 153C were also issued in the name of the assessee i.e. dead person. Therefore, the initiation of 153C proceedings itself was on a dead person. In fact, notices issue u/s. 153C against dead person is unenforceable in

12.

In the result, appeal of the assessee on these ground are allowed for all the 4 years.

13.

In view of our above finding, We do not feel any requirement to adjudicate on other grounds.

14.

Accordingly, appeals of the assessee are allowed.

Order pronounced in the open court on 22.02.2023.

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