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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘D’
Before: SHRI RAJPAL YADAV & SHRI PRADIPKUMAR KEDIA
आदेश/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
Revenue is in appeal before the Tribunal against order of ld.CIT(A)-10, Ahmedabad dated 29.3.2017 passed for the Asstt.Year 2012-13.
Sole grievance of the Revenue is that the ld.CIT(A) has erred in quashing the assessment order on the ground that this assessment order has been framed on the deceased person.
2 3. Brief facts of the case are that the assessee has filed her return of income declaring total income at Rs.32,85,470/-. The case was selected for scrutiny assessment and notice under section 143(2) was alleged to have been issued on 6.8.2013. Thereafter a questionnaire was issued under section 142(1) on 17.1.2014. Due to change of AO a fresh notice under section 143(2) was issued on 4.9.2014. The case of the assessee is that the assessee died on 2.2.2015 and this fact was brought to the notice of the AO on 27.2.2015. Inspite of that AO has passed an assessment order in the name of deceased person without giving notice to the legal heirs under section 143(2) of the Income Tax Act. The ld.CIT(A) accepted this contention of the assessee and held that the assessment order is invalid. It quashed the assessment order. The finding recorded by the ld.CIT(A) reads as under:
“13. On going through facts of the case, the legal heir informed the AO about the death of the appellant on 27/02/2015 and the order u/s 143(3) was passed by the AO on 05/03/2015. Therefore, there is a gap of less than 7 days (February being a month of 28 days in 2015) between these two events. It is not possible in such a short time to determine the legal representative and all further proceedings are required to be taken against the legal representative only. A notice, if any u/s 143(2) will therefore, have to be served on such legal representative. The AO has not brought anything on record to prove that the proceedings were initiated for determination of legal representative and whether notice u/s 143(2) was served on such legal representative. In fact, looking at the time gap, it is not possible to do so.
Therefore, respectfully following the order of Hon'ble Gujarat High Court and Hon'ble ITAT Ahmedabad Bench, it is held that the legal representative in this case has not been 3 impleaded before passing the assessment order. Therefore, the assessment order has been passed on a dead person which is not valid and cannot be sustain in the eyes of the law. Therefore, the ground no. 2 taken by the appellant is allowed and it is held that the order passed by the AO is not a valid order in the eye of the law. Since the appellant succeeds on this ground, the all other grounds taken by the appellant become academic and therefore, are not being adjudicated upon separately.”
The ld.counsel for the assessee contended that the issue in dispute is squarely covered in favour of the assessee by the decision of Hon’ble Gujarat High Court n the case of CIT Vs. Sumantbhai C. Munshaw (Decd), 128 ITR 0142. The ld.DR relied upon the order of the AO.
We have duly considered rival submissions and gone through the record carefully. It is pertinent to note that jurisdiction for scrutinizing return under section 139(1) is being infused in the AO by virtue of notice issued under section 143(2) within time limit provided in the proviso appended to section 143(2). It is not disputed before us that such notice was not issued within time limit and no objection qua that aspect was raised by the assessee before the ld.CIT(A). The case of the assessee is that assessee died on 11.2.2015 and intimation to this effect was transmitted to the AO. Legal heirs of the assessee had asked the AO to grant some more time to comply and file details as required by the AO. The ld.AO failed to give notice to the L/R and passed the impugned order on 5.3.2015. It is pertinent to observe that section 159 of the Act governs this situation. For the facility of reference, we take note of section 159 which reads as under:
4 “159. (1) Where a person dies, his legal representative 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 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 sub-section (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.
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A perusal of sub-clause (b) of sub-section (2) indicate that if any proceedings taken against the deceased before his death would be deemed to have been taken against the L/R and may be continued against the L/R from the stage at which it stood on the date of the death of the deceased. In the present case, the ld.AO has initiated assessment proceedings against the deceased validly. Before passing of the final assessment order, the assessee has died. L/Rs. have come up on the record. Therefore, it is to be assumed that proceedings was valid and legal. Only irregularity at the most can be that an opportunity to be given to the L/R for defending them against any proposed addition. That could not be 5 fulfilled on account of time limit due to short span of time available with the AO. Considering the above aspect, we set aside both the orders of the Revenue authorities and restore this issue to the file of the AO. He shall provide an opportunity of hearing to the LR and re-adjudicate the issue in accordance with law. Appeal of the Revenue is allowed for statistical purpose.
In the result, appeal of the Revenue is allowed for statistical purpose. Order pronounced in the Court on 9th July, 2019.