PR. COMMISSIONER OF INCOME TAX, PANCHKULA vs. SH. YOGINDER SINGH, THROUGH LEGAL HEIR SH. VIRENDER SINGH

ITA/271/2017HC Punjab & HaryanaPHHC01117471201723 October 2018Author: MR. JUSTICE SURINDER GUPTA,LOK ADALAT BENCH - 37 pages
AI SummaryRemanded

What were the facts?

The assessee, Sh. Yoginder Singh, filed an income tax return for AY 2006-07 declaring an income of Rs. 42,96,825. The Assessing Officer (AO) later invoked Section 147 to re-open the assessment for AY 2006-07, noting enhanced compensation and interest received by the assessee. Sh. Yoginder Singh died on 08.04.2008. The AO issued a notice under Section 148 on 25.03.2013 to the deceased assessee through his legal heirs. The notice was sent via speed post to the address on record but was returned with a remark that the assessee had died years ago. The AO subsequently issued notices under Sections 143(2) and 142(1). One legal heir filed a reply, and later a Chartered Accountant attended proceedings, raising an objection about non-service of the Section 148 notice. The AO rejected these objections and passed an assessment order under Section 143(3) read with Section 147 on 28.02.2014. The CIT(A) partly allowed the appeal, but the ITAT allowed the assessee's appeal solely on the ground of invalid notice service.

What did the High Court hold?

The High Court held that the ITAT's order allowing the appeal solely on the ground of invalid service of notice under Section 148 was not sustainable. The Court referred to Section 159(2)(b) of the Act, which states that any proceeding that could have been taken against the deceased if alive may be taken against the legal representative, and such representative is deemed an assessee. The Court noted that the legal heirs participated in the assessment proceedings. Furthermore, Section 292B of the Act provides that proceedings shall not be invalid merely by reason of any mistake, defect, or omission if they are in substance and effect in conformity with the intent and purpose of the Act. The Court observed that the notice under Section 148 was issued within time to the deceased through legal heirs, and although returned, the address was correct. The legal heirs filed a reply to a subsequent notice and attended proceedings, raising objections about non-service of the Section 148 notice, which the AO rightly rejected. The Court found that the ITAT's reasoning that the re-assessment order was invalid because it was passed in the name of a dead person and the notice was not served was unsustainable. Consequently, the impugned order of the ITAT was set aside, and the matter was remanded back to the Tribunal to decide the appeal on merits. The substantial questions of law were answered accordingly.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was correct in holding the notice issued under Section 148 invalid because it was not addressed in the name of the legal representatives of the deceased assessee, despite being addressed to the deceased through legal heirs. 2. Whether the ITAT was correct in holding re-assessment proceedings invalid on the ground that the notice was addressed to the deceased through legal heirs, ignoring that the AO had validly assumed jurisdiction under Section 147 after recording reasons. 3. Whether the ITAT was correct in quashing the assessment order under Section 143(3) read with Section 147 on the ground that the legal heirs were not impleaded as necessary parties. 4. Whether the ITAT was correct in holding the re-assessment invalid because notice under Section 148 was not served on the assessee or legal heirs, rendering the proceedings without jurisdiction. 5. Whether the ITAT was correct in equating 'issue' and 'serve' as jurisdictional aspects, when they operate differently and defects are curable under Sections 292B and 292BB. Assessee's contentions: The statutory requirements to serve notice under Section 148 were not complied with, rendering the initiation of proceedings without jurisdiction. The Tribunal was justified in accepting the appeal. Revenue's contentions: The notice under Section 148 was issued within limitation and sent to the deceased through his legal heirs. One legal heir filed a reply, and assessment proceedings were attended. The Tribunal erred in accepting the assessee's appeal.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 148,Section 147,Section 143(3),Section 143(1),Section 143(2),Section 142(1),Section 159,Section 292B,Section 292BB

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 23.10.2018 Pr. Commissioner of Income Tax, Panchkula.

.......Appellant Versus Sh. Yoginder Singh ......Respondent CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL, JUDGE HON'BLE MR. JUSTICE AVNEESH JHINGAN, JUDGE Present: Mr. Yogesh Putney, Senior Standing Counsel for the revenue-appellant. Mr. Arvind Bansal, Advocate for the assessee-respondent. **** AVNEESH JHINGAL, J. The appellant-revenue has filed the present appeal under Section 260-A of the Income Tax Act, 1961 (for short 'the Act') against the order dated 21.10.2016 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh, (for short ' the Tribunal') in ITA No. 373/CHD/2015. The assessment year involved is 2006-07. 2. The appellant has claimed following substantial questions of law: ''(i) Whether on the facts and in the circumstances of the case the ld.ITAT was right in law in holding the notice issued and served under Section 148 of the Income Tax Act, 1961 as invalid on t

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 260-A

All 2,347 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →