PR. COMMISSIONER OF INCOME TAX-2, JODHPUR vs. SITA BADOLIYA

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ITA/147/2018HC RajasthanRJHC01055094201827 January 2020Author: SANGEET LODHA,PUSHPENDRA SINGH BHATI3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that an order passed in favour of or against a dead person is a nullity. It was undisputed that the respondent had expired prior to the ITAT's order. Therefore, the High Court found it appropriate to set aside the order under appeal. The reasoning was based on the established legal principle that proceedings against or in favour of a deceased person without substitution of their legal representatives are void. The ratio decidendi is that any order passed by an appellate authority without substituting the legal heirs of a deceased party is a nullity and liable to be quashed. Accordingly, the High Court set aside the ITAT's order and remanded the matter back to the ITAT to pass a fresh order after the substitution of the person representing the estate of the deceased, in accordance with law. The appeal and the application for substitution were disposed of.

What were the facts?

The appeal before the High Court was filed by the Principal Commissioner of Income Tax-2, Jodhpur (Revenue) against an order dated March 19, 2018, passed by the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench. The ITAT's order had dismissed the Revenue's appeal against an order dated August 30, 2016, passed by the Commissioner of Income Tax (Appeals)-2, Jodhpur. The Revenue filed an application to bring the legal representatives of the deceased respondent, Smt. Sita Badoliya, on record, stating she had expired on October 7, 2017, prior to the ITAT's order. The legal representatives argued that the ITAT order passed without their substitution was a nullity and should be set aside, with the matter remanded.

What were the issues?

1. Whether the order passed by the ITAT in ITA No.399/Jodh/2016 on 19.3.18, in favour of a deceased respondent (Smt. Sita Badoliya) without substitution of her legal representatives, is a nullity in the eyes of law and deserves to be set aside? (Question of law). Assessee's Contention: The proposed legal representatives argued that an order passed in favour of a dead person is a nullity. They contended that the ITAT order was passed without substitution, making it void. They further argued that the question of substitution in the present High Court appeal does not arise, as the ITAT order itself is a nullity and should be set aside, with the matter remanded to the ITAT for fresh adjudication after proper substitution. Revenue's Contention: The learned counsel for the appellant (Revenue) had no objection if the order under appeal was set aside and the matter was remanded to the ITAT.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN JODHPUR D.B. Income Tax Appeal No. 147/2018 Pr. Commissioner Of Income Tax-2, Jodhpur ----Appellant Versus Smt. Sita Badoliya, L/H Sh Jethmal Binawara, A-77, Kamla Nehru Nagar-II, Jodhpur. ----Respondent For Appellant(s) : Mr. Sunil Bhandari For Respondent(s) : Mr. Prateek Gattani for LRs of deceased respondent HON'BLE MR. JUSTICE SANGEET LODHA HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Order 27/01/2020

1.

This income tax appeal is directed against the order dated 19.3.18 passed by the Income Tax Appellate Tribunal (‘ITAT’), Jodhpur Bench, Jodhpur in ITA No.399/Jodh/2016, whereby the appeal preferred by the Revenue against the order dated 30.8.16 passed by the Commissioner of Income Tax (Appeals)-2, Jodhpur, has been dismissed.

2.

The appellant has preferred an application (No.2/19) to bring the legal representatives of deceased respondent on record. It is stated that respondent-Smt. Sita Badoliya had expired on 7.10.17, however, this fact was not brought on record and therefore, no steps could be taken to bring the legal representatives of deceased respondent on record before the ITAT. It is prayed that (2 of 3) [ITA-147/2018] the legal representatives of deceased respondent may be taken on record in the present appeal.

3.

Learned counsel appearing for the proposed legal representatives of deceased respondent submits that the order under appeal has been passed by the ITAT without substitution of the legal representatives of deceased respondent is nullity in the eyes of law, deserves to be set aside and question of substitution of the legal representatives as prayed for in the present appeal does not arise. Learned counsel submitted that the proposed legal representatives have right to contest the application seeking substitution inasmuch as, the substitution prayed for can be allowed only if they represent the estate of the deceased and therefore, while setting aside the order under appeal, the matter may be remanded to the ITAT.

4.

Learned counsel for the appellant has no objection if the order under appeal is set aside and the matter is remanded to the ITAT.

5.

Indisputably, the order passed in favour of or against the dead person is nullity. It is not disputed before this Court that the respondent had expired prior to institution of the present appeal and therefore, the question of substitution of the legal representatives of the deceased respondent in the present appeal does not arise. Obviously, the proposed legal representatives has right to contest the application seeking substitution, if any prayed for.

6.

In this view of the matter, it would be appropriate to set aside the order under appeal and remand the matter back to the ITAT to pass order afresh in accordance with law.

(3 of 3) [ITA-147/2018]

7.

Accordingly, the order under appeal is set aside. The matter is remanded to the ITAT to pass the order afresh after substitution of the person representing the estate of the deceased if any, in accordance with law.

8.

The appeal so also the application (No.2/19) stand disposed of accordingly. (PUSHPENDRA SINGH BHATI),J (SANGEET LODHA),J 14-Vij/-

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