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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH.KULDIP SINGH
This appeal by the assessee is preferred against the order of the CIT(A)-14, New Delhi dated 11.03.2020 pertaining to A.Y. 2007-08.
The substantial grievance of the assessee read as under :-
That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact in dismissing the appeal filed by the legal heir of the assessee on the ground that delay in filing the appeal is not condonable despite the fact that it was brought to his notice that legal heirs of the deceased assessee did not know about the assessment order having been passed in the case of the deceased father and it came into the notice of the legal heirs only on receipt of recovery notice. In the interest of justice Ld. CIT(A) ought to have admitted the appeal and decide the same on merits.
2. That under the facts and circumstances of the case the Ld. CIT(A) has failed to appreciate that the assessment framed by the AO was bad in law in as much as notice u/s 148 of the Act was not served. In the assessment order the AO has observed that the notice was issued but it has not been stated that any such notice was served. Therefore, assessment itself is bad in law on account of jurisdictional issue and thus, assessment order is required to be held invalid. The assessment order is also invalid on the ground that the AO did not comply with the mandatory jurisdictional requirements laid down in section 147 to 151 of the Act and assessment framed is contrary to these provisions.
That under the facts and circumstances of the case the Ld. CIT(A) has failed to appreciate that mere knowledge of sale of property by the deceased father came to the notice of AO during the course of earlier assessment year, i.e. AY 2006-07 itself cannot constitute a ground to reopen unless AO applies his mind on the information and only after ascertaining the facts, valid reasons could be recorded. Moreover, neither the notice u/s 148 of the Act has been served nor any letter dated April 10, 2006 as stated in the reasons was ever served upon the legal heir, therefore, assessment is bad in law.
That under the facts and circumstances of the case the Ld. CIT(A) has failed to that there was no income assessable in the hands of the assessee as income" which has been estimated by the AO at a sum of Rs. 5,00,000/- such addition made by the AO is bad in law and is without any basis and is liable to be deleted.
5. That under the facts and circumstances of the case the Ld. CIT(A) has failed to appreciate that sale consideration of property as such cannot be assessed in its entirety as "short term capital gain". The AO was required to ascertain the facts and thereafter, assess such income under the appropriate head, if assessable under the Income Tax Act, 1961.
6. That under the facts and circumstances of the case the Ld. CIT(A) has failed to appreciate that, the Appellant being one of the legal heirs, is not liable to pay any tax on the income assessed by the AO.
3. Ironically the CIT(A) has dismissed the appeal as the appeal before him was barred by limitation and without condoning the delay and without going into the merits of the appeal the CIT(A) dismissed the appeal.
4. We are of the considered view that the CIT(A) ought to have considered the appeal on merits of the case and should have avoided the technicalities of the law.
The peculiar facts of the case are that the assessee Tahar Singh died on 15.04.2010 which is evident from the death certificate.
The AO issued notice dated 14.03.2014 to the assessee through heir Sh. Rajpal son of the assessee. Referring to the sale deed 10.04.2006 for sale of immovable property for Rs.2.90 crores the AO asked the son of the assessee Sh. Rajpal to explain whether return of income was filed and whether capital gain has been declared and tax has been paid on the capital gain, a similar notice on same day was also issued in the name of Tahar through heir Ravinder son of the assessee asking the same details as above. The third notice on the same day was again issued to the another son of the assessee asking for the same details. Further a similar notice was issued in the name of the Smt. Sunita Kumari being daughter of the deceased.
Notice u/s. 148 of the Act were issued on 29.03.2014 served upon Smt. Sunita Kumari, Rajpal and Ravinder Kumar.
The fact of the matter is that there are seven legal heirs of the deceased Tahar Singh :-
(i) Smt. Shanti (wife of deceased Tahar Singh) (ii) Ravinder Kumar (son) (iii) Suman Kumar (son) (iv) Sunita (daughter) (v) Rajpal (son) (vi) Rajesh (son) (vii) Sumitra Devi (daughter)
This is supported by copy of succession certificate issued by Civil Judge Division Gurgaon on 05.10.2012. The assessment has been framed in the name of Sunita Kumari one of the daughter of the deceased Tahar singh whereas there are seven legal heirs of the deceased assessee.
The Hon’ble Supreme Court in the case of First Additional ITO Vs. Mrs. Susheela Sadananda 57 ITR 168 has observed as under :-
Considering the facts of the case in the light of the aforestated findings of the Hon’ble Supreme court (supra) we restore the entire appeal to the files of the AO. The AO is directed to issue notice to all the legal heirs of the deceased assessee and decide afresh as per the provisions of the law after giving a reasonable and sufficient opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purpose.
Decision announced in the open court in the presence of both the representatives on 23.06.2021.