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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
[ITA No.407/Ind/2016] [Vokram Singh Puar]
आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No.407/Ind/2016 Assessment Year: 2011-12 Vikram Singh Paur, Pr. CIT Son & Legal Heir of Late Shri Bhopal बनाम/ Tukoji Rao Puar Vs. Dewas (Appellant) (Revenue ) P.A. No.AGDPP8186B Appellant by Shri Girish Agrawal, CA Revenue by Shri S.B. Prasad, CIT-DR Date of Hearing: 27.01.2020 Date of Pronouncement: 20 .05.2020 आदेश / O R D E R PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of
Pr. CIT, Bhopal dated 18.03.2016 for the assessment year
2011-12. The assessee has raised following grounds of
appeal:
[ITA No.407/Ind/2016] [Vokram Singh Puar]
“1.The ld. Pr. CIT, Bhopal erred in passing the order u/s 263 fo the IT Act 1961 in the name of Tukoji Rao Puar, Dewas who expired on 15.06.2015. 2. The Ld. Pr. CIT, Bhopal was awared this fact and he also issued notice in the name of son and LR Vikram Singh Puar earlier a copy of such correspondence is enclosed as per annexure-D. 3. The Ld. Pr. CIT, Bhopal erred imposing the order in the name of death person and this is bad in law and even it deserved to be quashed. 4. The Ld. Pr. CIT, Bhopal, erred in stating that the AO passed order in hest in the month of march without considering the amount of capital gain and amount of gifts. 5. The income tax proceeding for the assessment years under reference being carried simultaneously before AO-Dewas and AP-Bhopal since 2012. 6. The required information were filed earlier which is clear on the latter dated 25.09.2012 as per annexure-E.
Ground no.1 to 3 are against the legality of the order on
the ground that the impugned order has been passed
against the deceased person which is nullity in the eyes of
law. This Tribunal was pleased to allow the appeal of the
assessee. Subsequently, revenue filed Miscellaneous
Application(MA) arguing that the mistake was purely
[ITA No.407/Ind/2016] [Vokram Singh Puar]
typographical, order was recalled to ascertain whether
there is a typographical error in the order of the Ld. Pr.
CIT.
The ld. counsel for the assessee argued that the Ld. Pr.
CIT was aware of the factum of death of the assessee as
while issuing notice it was corrected to be addressed to the
legal heir of the deceased assessee. He reiterated the
submissions as made in the written submissions are as
under:
Ld. Pr. CIT passed the impugned order in the name of deceased assessee which is bad in law. The fact of death of the assessee was brought on record before the Ld. Pr. CIT in the proceedings u/s 263 which is undisputed. It is not the case where the Ld. Pr.CIT was not aware of the death of the assessee. Impugned order passed in the name of deceased assessee is a jurisdictional defect and is not curable under the provisions of section 292B. It is a substantive illegality and not a procedural violation of nature adverted to in section 292B. 2. Contention of the Department that legal heir i.e. the son of the deceased assessee attended the hearing is factually incorrect. AR of the deceased assessee attended the hearing under the erstwhile power of attorney. 3
[ITA No.407/Ind/2016] [Vokram Singh Puar]
Aspect of participation in the proceedings is dealt in section 292BB so as to cover the procedural defects relating to issue and service of notices which is not a case in the instant appeal. Without prejudice, participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. 3. Recently, Hon’ble Supreme Court in the case of Maruti Suzuki India Limited – [2019] 107 taxmann.com 375 order pronounced on 25.07.2019 dealt with the same issue of assessment order passed in the name of a non-existent entity holding it to be void ab initio. [CLPB 7- 9] a. Para 33 of the above decision gives a finding in favour of the assessee by placing reliance on its own earlier decision in the case of CIT v. Spice Enfotainment Ltd. [Civil Appeal No. 285 of 2014, dated 2-11-2017]. [CLPB 1-2] b. A batch of Civil Appeals was filed before the Hon’ble Supreme Court against the decisions of the Delhi High Court, the lead appeal being Spice Enfotainment (supra). On 2 November 2017, Hon’ble Supreme Court dismissed the Civil Appeals and tagged Special Leave Petitions in terms of the following order : "Delay condoned. Heard the learned Senior Counsel appearing for the parties. We do not find any reason to interfere with the impugned judgment(s) passed by the High Court. In view of this, we find no merit in the appeals and special leave petitions. Accordingly, the appeals and special leave petitions are dismissed." [CLPB 12 back side] c. The doctrine of merger results in the settled legal position that the judgment of the Delhi High Court stands affirmed by the above decision in the Civil Appeals. Though, leave was not granted by the Hon’ble Supreme 4
[ITA No.407/Ind/2016] [Vokram Singh Puar]
Court, reasons have been assigned by the Hon’ble Supreme Court for rejecting the Special Leave Petition. The law declared would attract the applicability of Article 141 of the Constitution. For, as the Hon’ble Supreme Court has held in Kunhayammed v. State of Kerala [2000] 113 Taxman 470/245 ITR 360 (SC) : [CLPB 16 back side]
"40…Where the order rejecting an SLP is a speaking order, that is, where reasons have been assigned by this Court for rejecting the petition for special leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court. However this would be so not by reference to the doctrine of merger." [emphasis supplied]
d. In Spice Entertainment Ltd. v CST 2012 (280) ELT 43 (Delhi) the Division Bench of the Hon’ble Delhi High Court dealt with the question as to whether an assessment in the name of a company which has been amalgamated and has been dissolved is null and void or, whether the framing of an assessment in the name of such company is merely a procedural defect which can be cured. Hon’ble High Court held that upon a notice under Section 143 (2) being addressed, the amalgamated company had 5
[ITA No.407/Ind/2016] [Vokram Singh Puar]
brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a non-existent company which renders it void. This, in the view of the Hon’ble High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppel against law. [CLPB 3-6] 4. From the above facts and jurisprudence squarely covering the instant case of assessee, it is evidently demonstrated that –
a. Ld. Pr.CIT was informed and was aware of the death of the assessee in the course of impugned proceedings u/s 263. It is an undisputed fact since he himself had issued a notice to the legal heir of the deceased assessee.
b. Without prejudice to fact that legal heir did not attend the hearing before Ld. Pr.CIT, participation in proceedings cannot operate as estoppel against law. c. Framing of assessment against a non-existing entity / person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person. d. Section 292B covers only the procedural irregularity. Jurisdictional defects or substantive illegality which goes to the root of the matter are not curable by under section 292B. Contention of the Department that order made in the name of the deceased assessee is a ‘typographical error’ despite the fact that Ld. Pr.CIT being aware of death of the assessee, he having issued a notice on the legal heir, ought to be out rightly ruled out in view of above referred decisions of the Hon’ble Supreme Court and Delhi High Court. Considering the above facts and principle of law emanating from decision of Hon’ble Supreme Court in 6
[ITA No.407/Ind/2016] [Vokram Singh Puar]
Maruti Suzuki India Limited (supra) by following its own decision of Spice Entertainment Limited (supra), instant case is squarely covered in favour of assessee. Impugned order passed in the name of deceased assessee is void ab initio and ought to be quashed. In continuation to the submission already on record, the following may please be considered -
Instant appeal emanates from the disposal of miscellaneous application MA 33/Ind/2018 order pronounced on 09.08.2019. The matter has been recalled for – [PB 24-25 para 5] “……We need to examine whether it is purely a typographical error……..” 2. Provisions of section 254(2) reads – “The Appellate Tribunal may……..with a view to rectifying any mistake apparent from record………..” Those mistakes which are apparent from record can be rectified under the provisions of section 254(2). 3. In the instant case on the matter being recalled with a very specific objective, what has to be examined is whether Ld. Pr.CIT has made purely typographical error by passing the order u/s 263 in the name of deceased assessee, Late Shri Tukoji Rao Puar, more particularly when the fact of death was informed. [PB 7] 4. Ld. Pr.CIT made a typographical error by stating – “Legal hair of Shri Tukoji Rao Puar” in the notice issued u/s 263 dated 10.03.2016. The mistake of using the word “hair” instead of “heir” has been rectified manually in the said notice. [PB 8] From the above it is evident that Ld. Pr.CIT applied his mind and suo moto rectified the typographical error so made by over-writing in his own handwriting. There is no such suo moto correction by the Ld. Pr.CIT on the alleged typographical mistake while passing the impugned order u/s 263 which has been made in the name of deceased assessee, Late Shri Tukoji Rao Puar.
[ITA No.407/Ind/2016] [Vokram Singh Puar]
In the prayer of miscellaneous application MA No. 33/Ind/2018, department has stated – “5. The notice was issued to the legal Heir of the deceased assessee, who has also participated in the proceedings and whose submission was duly considered by the Pr. CIT, while passing the order u/s 263…….” The aspect of “participation” in the proceedings is dealt in section 292BB. Provisions of section 292BB are applicable only to any assessment or reassessment proceedings. Instant proceedings being initiated u/s 263 are revisional proceedings. Provisions of section 292BB are not applicable. Reliance is placed on the decision of Hon’ble Kolkata Bench “C” of ITAT in the case of Emerald Company Limited – [2017] 83 taxmann.com 29 – order pronounced on 13.01.2016 – HEAD NOTE – “Section 292BB of the Income-tax Act, 1961 - Notice deemed to be valid in certain circumstances (Scope of provisions) - Assessment year 2010-11 - Section 292BB can be made applicable only for assessment or reassessment proceedings and same cannot be made applicable for revisional proceedings as contemplated under section 263 [In favour of assessee] 6. Assessee submits that the invalidity of passing of an order in the name of deceased assessee, Late Shri Tukoji Rao Puar even when the fact of death was informed cannot be rectified under the provisions of section 154. Reliance is placed on the decision of Hon’ble Jurisdictional High Court of Madhya Pradesh in the case of Fatehlal – [1996] 218 ITR 218 – order pronounced on 29.11.1995 – “………..This invalidity was not liable to be cured by rectification of the name of the legal heir under section 154 of the Act…….” 7. Defect of framing of an order in the name of a deceased person cannot be rectified under the provisions of section 292B. It goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any order against a dead person. 8
[ITA No.407/Ind/2016] [Vokram Singh Puar]
Term “person” has been defined u/s 2(31) which inter alia include an individual. Hon’ble Supreme Court while adjudicating in the matter of Maruti Suzuki India Limited – [2019] 107 taxmann.com 375 – order pronounced on 25.07.2019, followed its own decision in the case of Spice Entertainment vide Civil Appeal No. 285 of 2014 wherein SLP by the Department was dismissed. In the matter of Spice Entertainment before the Hon’ble Delhi High Court, while passing the order in favour of assessee, it stated in Para 16 and 17 –
When we apply the ratio of aforesaid cases to the facts of this case, the irresistible conclusion would be provisions of Section 292B of the Act are not applicable in such a case. The framing of assessment against a non- existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person. [emphasis supplied] 17. The order of the Tribunal is, therefore, clearly unsustainable. We, thus, decide the questions of law in favour of the assessee and against the Revenue and allow these appeals. [emphasis supplied]
Considering the above facts and circumstances of the case, submissions made, judicial precedents and documents on record, the finding already given by your Honors vide order dated 09.03.2018 in Para 4 Page 3 that “……It is a settled position of law that any order passed against the dead person is nullity……..”, ought to be upheld as such. To reiterate, the impugned order for revision passed in the name of deceased assessee is void ab initio liable to be quashed.
[ITA No.407/Ind/2016] [Vokram Singh Puar]
On the other hand, Ld. CIT, DR opposed the
submissions of the assessee and supporting the impugned
order.
We have heard rival statements and perused the
materials available on record and gone through the
impugned order. It is pointed out by the Ld. Counsel for
the assessee that the Ld. Pr. CIT was conscious of the fact
that the order was to be made against the legal heirs as
notice was duly corrected by him. But strangely the
impugned order is passed in the name of the dead person.
It is also contended that Section 159 of the Act does not
cover the order passed u/s 263 of the Act. For the sake of
clarity Section 159 is reproduced as under :-
Legal representatives (1) Where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 10
[ITA No.407/Ind/2016] [Vokram Singh Puar]
147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of subsection (1),- (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub- section (2) of section 161, section 162 and section 167 shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of subsection (4) and sub- section (5), be limited to the extent to which the estate is capable of meeting the liability.
From the aforesaid provision is clear that it speaks 5.
about assessment or reassessment but it does not speak
about proceedings initiated u/s 263 of the Act. 11
[ITA No.407/Ind/2016] [Vokram Singh Puar]
Undisputedly, the mistake as sought to be rectified by the
revenue indirectly, in fact had occurred in the impugned
order. As it is stated by the revenue that clerical mistake
crept into the impugned order in the form of typographical
error which is evident from the fact that the notice u/s 263
of the Act was issued against the legal heirs. At this
juncture it would be appropriate to reproduce the
provisions of Section 154 of the Act that speaks as under
:- 154. 12[(1) With a view to rectifying any mistake apparent from the record13 an income-tax authority referred to in section 116 may,— (a) amend any order passed by it under the provisions of this Act ; 14[(b) amend any intimation or deemed intimation under sub- section (1) of section 143;]] 15[(c) amend any intimation under sub-section (1) of section 200A.] 16[(1A) Where any matter17 has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided.]
[ITA No.407/Ind/2016] [Vokram Singh Puar]
(2) Subject to the other provisions of this section, the authority concerned— (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee 18[or by the deductor], and where the authority concerned is the 19[***] 20[Commissioner (Appeals)], by the 21[Assessing] Officer also. 22[* * *] (3) An amendment, which has the effect of enhancing an assessment17 or reducing a refund or otherwise increasing the liability of the assessee 18[or the deductor], shall not be made under this section unless the authority concerned has given notice to the assessee 18[or the deductor] of its intention so to do and has allowed the assessee 18[or the deductor] a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. 23[(5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor, the Assessing Officer shall make any refund which may be due to such assessee or the deductor.] (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund 24[already made or otherwise increasing the liability of the assessee or the deductor, the Assessing Officer shall serve on the assessee or the deductor, as the case may be] a notice of demand in the prescribed form specifying the sum payable25, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section 155 or sub-section (4) of section 18626 no amendment under this section shall be made after the expiry of four years 27[from the end of the financial year in which the order28 sought to be amended was passed.] 13
[ITA No.407/Ind/2016] [Vokram Singh Puar]
29[(8) Without prejudice to the provisions of sub-section (7), where an application for amendment under this section is made by the assessee 30[or by the deductor] on or after the 1st day of June, 2001 to an income-tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,— (a) making the amendment; or (b) refusing to allow the claim.] 6. From the above it is clear that all authorities as
prescribed u/s 116 of the Act with a view to rectify any
mistake apparent from record can amend any order passed
by it under the provisions of the Act. Hence the Ld. Pr. CIT
was empowered to rectify the mistake which has not been
done. In our considered view Ld. Pr. CIT ought to have
rectified the claim of typographical error by passing
appropriate order u/s 154 of the Act as it has not been
passed he cannot now rectify the mistake as occurred in
the impugned order. Before us the assessee has sought
that the order passed against a dead person which is
nullity in the eyes of law. We held accordingly and the
impugned order is hereby quashed. However, before
[ITA No.407/Ind/2016] [Vokram Singh Puar]
parting we make it clear that this order shall not come in
the way of Ld. Pr. CIT, if he rectifies the mistake so
occurred in the impugned order in accordance with law.
The appeal of the assessee is hereby allowed.
Order was pronounced in the open court on 20 .05.2020.
Sd/- Sd- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore; �दनांक Dated : 20/05/2020 Patel/PS
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order
Assistant Registrar, Indore