BHUPINDER PAL SINGH,AMBALA vs. INCOME TAX OFFICER-WARD-1, AMBALA, AMBALA

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ITA 1777/CHANDI/2025Status: DisposedITAT Chandigarh06 July 2026AY 2011-124 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal rejected the argument that the reassessment notice was issued in the name of a deceased assessee, as no return was filed and legal heirs did not inform the AO. The Tribunal restored the issue of whether the interest income accrued to the assessee to the AO for fresh consideration with evidence.

What were the facts?

The assessee's case was reopened based on AIR information regarding time deposits and interest earned. A notice under section 148 was issued, which was not complied with. The Assessing Officer made an addition of interest income on a best judgment basis.

What were the issues?

Whether the reassessment proceedings initiated in the name of a deceased assessee are valid, and whether the interest income accrued to the assessee during the assessment year.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH PHYSICAL HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.1777/CHANDI/2025 (िनधा�रणवष� / Assessment Year: 2011-12) Shri Bhupinder Pal Singh ITO Ward – 1 (Through L/h Smt. Chitra Singh) Ambala Cantt बनाम/ Vs. C/o Rajiv Goel and Associates Haryana 179, Bank Road, Ambala Cantt. Haryana - 133001 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AHKPS-6254-P (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Dhruv Goel (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 29-06-2026 घोषणाकीतारीख /Date of Pronouncement 06-07-2026 : आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2011- 12 arises out of common order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Vishakhapatnam [CIT(A)] dated 23.10.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 144 r.w.s. 147 of the Act on 15.12.2018. Having heard rival submissions, the appeal is disposed- off as under. 2. The assessee’s case was reopened pursuant to receipt of AIR information that the assessee made time deposits of Rs.125.60 Lacs

and earned interest of Rs.12.77 Lacs. A notice u/s 148 was issued which remained non-complied with by the assessee. In the absence of any reply forthcoming from the assessee, bank statement was obtained by Ld. AO from assessee’s bank and finally, Ld. AO made addition of interest income for Rs.14,68,332/- and framed the assessment. 3. During first appeal, it was explained by legal heir of the assessee that the assessee left for heavenly abode on 08-09-2008. One property situated at Morni Hills was acquired by the Forest department. However, some dispute was pending in the court. As per court’s instructions, FDRs was made in the name of Additional District Judge, Panchkula with Bank of India. The court had ordered to credit interest in the name of the assessee. However, in order to secure the interest of the appellant therein, it was directed that the saidamount of interest would be paid to the deceased assessee on his furnishing adequate security to the satisfaction of the executing court. Therefore, the assessee did not withdraw the interest due to disputed case because in case of adverse decision, the whole amount would be transferred to the other party. On these facts, the assessee stated that no real income accrued to the assessee and the accrual of income was dependent upon the decision of the court in future. The interest was getting credited without any right to withdraw the interest till the decision of the court. However, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before Tribunal.

4.

The legal argument as taken by Ld. AR is that the reassessment notice was issuedin the name of the deceased assessee. The said argument is to be rejected at its threshold since no return of income was ever filed on behalf of the assessee whereas the interest income continued to accrue in the name of the deceased assessee and the legal heirs never informed Ld. AO about the demise of the assessee. Nothing has been shown that the deceased assessee was substituted with the legal heirs before appropriate authorities. Therefore, this legal ground stands rejected. 5. So far as the merits of the case are concerned, it could be seen that the whole case of the assessee is based on the argument that no real income has accrued to the assessee till date. However, the said argument is not backed up by any cogent / concrete document on record. Pertinently, the assessee remained unrepresented during assessment proceedings. The vital issue to be adjudicated in the appeal would be to ascertain whether assessee’s right to receive the interest during this year actually crystallized or not. The relevant documents in that regard have not been placed on record. Therefore, on the given set of facts, I deem it fit to grant another opportunity of hearing to the assessee to substantiate this argument before Ld. AO with cogent evidence to demonstrate that impugned interest income never accrued to the assessee. The issue, on merits, stands restored back to Ld. AO for fresh consideration with a direction to the assessee’s representative to plead and prove their case forthwith.

6.

The appeal stands partly allowed for statistical purposes. Order pronounced on 06th July, 2026

-Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER AS Dated: 06-07-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

ASSISTANT REGISTRAR

ITAT CHANDIGARH

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