COMMISSIONER OF INCOME TAX vs. MOTI RAM

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ITA/335/2008HC Punjab & HaryanaPHHC01080316200817 July 2008Author: MR. JUSTICE SATISH KUMAR MITTAL,MR. JUSTICE AUGUSTINE GEORGE MASIH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT was correct in upholding the order of the CIT(A). The Court noted that the assessee expired on September 14, 2003, and the return was filed on November 28, 2003, with the deceased's signature. As per Section 140 of the Act, a return for an individual must be signed and verified by the individual himself or by a duly authorized person in specific circumstances (absence from India, mental incapacity, or other reasons preventing the individual from signing). In this case, the assessee was deceased at the time of filing, and the return was neither signed nor verified by the legal heirs. The Court referred to its own prior decision in Commissioner of Income Tax, Karnal versus Sh. Rakesh Kumar, Mukesh Kumar, Panipat, ITA No. 256 of 2008, decided on July 1, 2008, which held that proceedings based on a void authorization in the name of a dead person are null and void. Therefore, the return filed was null and void, and no valid assessment could be made on it. The appeal was dismissed as no substantial question of law arose.

What were the facts?

The assessee, Sh. Moti Ram, expired on September 14, 2003. His return of income for Assessment Year 2003-04, showing agricultural income of Rs. 2,20,000/-, was filed on November 28, 2003, bearing his signature. The Assessing Officer proceeded with assessment under Section 143(3) of the Income Tax Act, 1961, despite the contention that the return was filed after the assessee's death. The legal heirs challenged the assessment order before the CIT(A), who declared the return and the subsequent assessment null and void. The ITAT upheld the CIT(A)'s order, dismissing the revenue's appeal. The revenue has appealed to the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the CIT(A) holding the return of income and assessment framed as null and void? (Question of law) Assessee's Contention: The return filed after the assessee's death was null and void ab initio, rendering any action taken on it invalid. The legal heirs did not sign the return on behalf of the deceased assessee. Revenue's Contention: The revenue argued that the ITAT was not right in upholding the CIT(A)'s order. The revenue contended that the return, though filed after death, bore the deceased assessee's signature and therefore should be considered valid, or at least that a valid assessment could be made on it. The revenue relied on Section 139 and Section 140 of the Act.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 139,Section 140,Section 158-BC(c),Section 144

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 335 of 2008 DATE OF DECISION : 17.07.2008 Commissioner of Income Tax, Karnal .... APPELLANT Versus Sh. Moti Ram (Deceased) through his legal heir Sh. Dharam Pal ..... RESPONDENT CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL

HON'BLE MR. JUSTICE AUGUSTINE GEORGE MASIH

Present: Mr. Sanjeev Kaushik, Advocate, for the appellant-revenue.

* * * SATISH KUMAR MITTAL , J. The Revenue has filed this appeal under Section 260 A of the Income Tax Act, 1961 (hereinafter referred to as `the Act') against the order dated 20.8.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (hereinafter referred to as `the ITAT') in ITA No. 439/Chandi/ 2007 for the Assessment Year 2003-04, by raising the following substantial questions of law :- “Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the the order of the CIT (A) holding the return of income and assessment framed as null and void?”

-2- The brief facts of the case are that the return of income in this case was filed on 28.11.2003 after the death of the assessee, as the assessee had expired on 14.9.2003. The return of income was signed by the assessee himself during his life time, but the same was filed after his death. In the return of income, only agriculture income of Rs. 2,20,000/- was shown by the assessee. The Assessing Officer made the assessment under Section 143 (3) of the Act, in spite of the contention raised that the return filed by the assessee was null and void. The legal heirs of the assessee challenged the validity of the assessment order before the CIT (A), who after considering the submissions of the legal heirs of the assessee held that the return filed in the name of the assessee after his death was null and void ab initio. Hence, any action taken on such a return was also null and void. Feeling aggrieved against the order of the CIT (A), the revenue filed appeal before the ITAT, who vide its order dated 20.8.2007 upheld the order of the CIT (A) and dismissed the appeal of the revenue on the ground that the deceased assessee did not authorise any person, including his legal heirs, to sign the return of income, when he was alive. It was further observed that the return filed in this case was null and void, because the assessee was not alive at the time of filing of return and the legal heirs have not signed the return on behalf of the assessee. Against the said order, the revenue has filed the instant appeal, raising the aforesaid substantial question of law. After hearing learned counsel for the revenue and going -3- through the impugned order, we do not find any merit in the instant appeal. In the present case, it is not disputed that the assessee expired on 14.9.2003, whereas the return of income having the signatures of the deceased assessee was filed on 28.11.2003. When the return was filed, the assessee was not alive, though the return filed was bearing his signatures. Sections 139 and 140 of the Act, which are relevant for the adjudication of the issue raised in this appeal are re-produced below :

139.

(1) Every person, - (a) x x x (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Provided x x x (1A) x x x

140.

The return under section 139 shall be signed and verified- (a) in the case of an individual, - -4- (i) by the individual himself; (ii) where he is absent from India, by the individual himself or by some person duly authorised by him in this behalf; (iii) where he is mentally incapacitated from attending to his affairs, by his guardian or any other person competent to act on his behalf; and (iv) where, for any other reason, it is not possible for the individual to sign the return, by any person duly authorised by him in this behalf: Provided that in a case referred to in sub-clause (ii) or sub-clause (iv), the person signing the return holds a valid power of attorney from the individual to do so, which shall be attached to the return. (b) x x x (c) x x x (d) x x x (e) x x x (f) in the case of any other person, by that person or by some person competent to act on his behalf.” From a perusal of the aforesaid provisions, it is clear that in case of an individual, the return of income is to be filed, signed and verified by the individual himself or by some person duly authorised by him in this -5- behalf, if he himself is absent from India. If the assessee is mentally incapacitated from attending to his affairs, the return is to be signed by his guardian or any other person competent to act on his behalf. In the instant case, the return was filed on 28.11.2003. On that day, the assessee had already expired. The return filed with the signatures of the assessee after his death cannot be taken as a valid return filed by the assessee himself. Undisputedly, the return was neither signed nor verified by the legal heirs of the deceased. Further, this Court in The Commissioner of Income Tax, Karnal versus Sh. Rakesh Kumar, Mukesh Kumar, Panipat, ITA No. 256 of 2008, decided on 1.7.2008, has held that the issuance of authorisation for conducting search and search warrant in the name of a dead person and subsequently, passing the order under Section 158-BC (c) / 144 of the Act on such void authorisation of conducting search is null and void. Therefore, the return filed in this case was null and void, because the assessee was not alive at the time of filing of the return. In our opinion, no valid assessment could have been made on the basis of an invalid and void return. Hence, we do not find any illegality in the order, passed by the ITAT, affirming the order of the CIT (A) and no substantial question of law arises for consideration of this Court. Dismissed.

( SATISH KUMAR MITTAL ) JUDGE July 17, 2008 ( AUGUSTINE GEORGE MASIH ) ndj JUDGE

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