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Facts
The assessee filed a return of income, and the case was reopened under Section 147 of the Income Tax Act, 1961. The assessee had passed away before the reopening, and his son appeared as the legal representative. The Assessing Officer (AO) made an addition on account of sale of penny stock, which was claimed as exempt.
Held
The Tribunal condoned the delay in filing the appeal due to the death of the assessee and non-representation. While dismissing grounds related to procedural irregularities, the Tribunal set aside the appeal order and restored it to the CIT(A) to decide on the merits of the addition, granting an opportunity for a hearing to the legal representative.
Key Issues
Whether the assessment order passed against a deceased person without proper legal representation is valid? Whether the addition made on account of sale of penny stock claimed as exempt is justified?
Sections Cited
250, 143(3), 147, 148, 10(38), 68, 148
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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: February 19th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the Revenue is against the order of the Ld. Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2012-13 dated 28.06.2024, which has been passed against the assessment order u/s 143(3)/147 of the Act, dated 06.12.2019.
2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. Because, the assessee had died on 05/11/2016. The information of his death was supplied to the AO and the assessing officer has also acknowledged the receipt of the information in the assessment order. Despite the knowledge of the same, the assessment order as well as the first appeal order has been passed in the name of the dead person Shri Hiranand Mandhyan. Hence, the reopening of the assessment and continuation of the reassessment proceedings is bad in law and in direct contradiction to the judgment in Rupa Shyam Sunder Dhumatkar vs ACIT (2020) 420 ITR 256 (Bom.), Alamelu Veerappan vs. ITO (2018) 257 taxmann.com 72 (Mad.). The order passed in the name of the death person shall be quashed in toto.
Because, it is a trite law that notice for re-opening of the assessment under section 148 against the dead person is invalid. Same is held in the case of Neelam Dhingra vs. DCIT (Trib- Delhi-Bench -E).
That, the assessment order has been passed without DIN. In the case of Gajendra Singh Vs DCIT (ITAT Delhi) ITAT Delhi held that simultaneous issue of the DIN number is insignificant and superfluous exercise, in the absence of mentioning the DIN number on the body of AO's order. Thus, Assessment order without DIN is void ab initio.
With the assistance of the Ld. Sr. DR, the record and facts have been examined. In ground no. 1, the assessee has contended that the assessment order has been passed in the name of a dead person and the same is bad in law. This ground is dismissed as the Ld. AO in the assessment order has mentioned the name of the legal representative being Sri Manish Mandhyan to whom a show cause notice was issued and since he did not file any objection, therefore, he was treated as legal representative. Similarly, ground no. 2 is also dismissed as the name of the legal representative was substituted when it was brought to the notice of the Ld. AO. As regards ground nos. 5 & 6 relating to the addition of Rs. 17,84,896/- sustained by the Ld. CIT(A), since the assessee did not file any documentary evidence before the Ld. CIT(A), therefore, the addition was sustained. However, we are of the view that since the assessee had expired and proper representation was not made before the Ld. CIT(A) therefore, in the interest of justice and fair
In the result, the appeal filed by the assessee is allowed for statistical purposes.