SMT.JASEELA vs. INCOME TAX OFFICER,KOZHIKODE AND 2 ORS.

WP(C)/18472/2009HC KeralaKLHC01060058200919 December 2014Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR8 pages
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What were the facts?

The petitioner is the daughter of late M.K. Sakeena, an assessee for AY 2001-2002. The assessment was completed on her husband, Sri. N.K. Mahamood, who was the legal heir. The assessment order (Ext.P1) resulted in additional tax liability. Sri. N.K. Mahamood appealed to the CIT(A) (Ext.P2), which was dismissed. He then appealed to the ITAT (Ext.P3). During the pendency of the ITAT appeal, Sri. N.K. Mahamood died. The petitioner sought impleadment as his legal heir before the ITAT, but the Tribunal erroneously believed he had died before the CIT(A) order and rejected the appeal (Ext.P3) without impleading the legal heirs. Subsequently, a penalty order (Ext.P6) under Section 271(1)(c) was passed against the petitioner. The writ petition challenges Ext.P3 and Ext.P6.

What did the High Court hold?

The High Court held that the ITAT committed a patent mistake in Ext.P3 order by erroneously assuming that Sri. N.K. Mahamood had died even before filing the appeal before it. The Tribunal ought to have considered and passed orders permitting the petitioner to implead herself as the legal heir of Sri. N.K. Mahamood, who had died on 12.01.2006 during the pendency of the appeal. The non-impleadment of the legal heir meant the Tribunal passed an order in respect of a dead person, rendering it a nullity. Consequently, Ext.P3 order was quashed, and the ITAT was directed to consider the appeal afresh after permitting the petitioner to implead herself as the legal heir. The ITAT was directed to pass orders within six months. Regarding Ext.P6 penalty order, the Court noted that the petitioner was heard before its passing and that an appeal under Section 246 of the Income Tax Act is available. The petitioner had not demonstrated any valid reason for interference under Article 226. Therefore, the Court refrained from issuing directions regarding Ext.P6, leaving it open for the petitioner to challenge it before the appellate authority within one month, with the appellate authority to pass orders within six months.

What were the issues?

1. Whether the Income Tax Appellate Tribunal (ITAT) erred in rejecting the appeal filed by late Sri. N.K. Mahamood without permitting the impleadment of his legal heir, the petitioner, as appellant, given that Sri. N.K. Mahamood died during the pendency of the appeal before the ITAT? (Question of law and fact, concerning procedural fairness and the validity of an order passed against a deceased person). 2. Whether the penalty order under Section 271(1)(c) of the Income Tax Act, 1961 (Ext.P6) is liable to be quashed or set aside in writ proceedings, considering the petitioner was heard before its passing and an alternative appellate remedy exists? Assessee's Contentions: - The ITAT's rejection of the appeal (Ext.P3) was based on a factual error regarding the date of death of Sri. N.K. Mahamood, rendering the order a nullity. - The petitioner, as the legal heir, should have been impleaded to prosecute the appeal. - The penalty order (Ext.P6) should be addressed. Revenue's Contentions: - The petitioner was heard before the penalty order (Ext.P6) was passed. - The penalty order (Ext.P6) is appealable under Section 246 of the Income Tax Act, and the petitioner should pursue the alternate remedy. - The respondents admitted that Sri. N.K. Mahamood expired during the pendency of the appeal before the ITAT.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 246

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 19TH DAY OF DECEMBER 2014/28TH AGRAHAYANA, 1936 ---------------------------- PETITIONER(S): --------------- JASEELA, W/O.P.SAJID MAHMOOD"SHEHNAS BHAVAN", 5/1598 NEAR BSNL GMIS OFFICE, ASHOKAPURAM, KOZHIKODE. BY ADV. SRI.NIRMAL. S RESPONDENT(S): --------------- 1. INCOME TAX OFFICER, WARD-2(2) KOZHIKODE, INCOME TAX DEPARTMENT, KOZHIKODE.

2.

COMMISSIONER OF INCOME TAX APPEALS, AAYAKAR BHAVAN NORTH BLOCK, IVTH FLOOR, MAANANCHIRA CALCIUT-1. 3. INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

APPENDIX

PETITIONER'S EXHIBITS: EXT.P1:OF ORDER PASSED BY THE RESPONDENT NO.J DATED 17.12.03 EXT.P2:OF ORDER PASSED BY THE 2ND RESPONDENT DATED 29.09.04 EXT.P3:OF ORDER DATED 12.11.08 IN I.T.A NO.1232/COCH/2004 EXT.P4:OF DEATH CERTIFICATE ISSUED BY T

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