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Facts
The assessee, Late Satishkumar B Chadha, had an ex-parte assessment order passed under Section 144 with an addition of Rs. 16,13,000 under Section 69A. He appealed to CIT(A) but died in September 2021 while the appeal was pending. The CIT(A) passed the order in March 2025 in the deceased assessee's name without bringing legal heirs on record or providing them the remand report.
Held
The Tribunal set aside the CIT(A)'s order, remanding the matter for de-novo adjudication. The CIT(A) was directed to bring the legal heirs on record, provide them with the remand report, and ensure they receive an opportunity of hearing, adhering to principles of natural justice.
Key Issues
The key issues were the CIT(A)'s failure to bring legal heirs on record after the assessee's death and the violation of natural justice by not providing the remand report to the legal heirs.
Sections Cited
144, 250, 69A, Rule 46A
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
This is an appeal filed by the Legal Heir of Late Satishkumar B Chadha against the Order u/s 250 of the Income Tax Act passed by Commissioner Of Income Tax (appeal) (NFAC), herein referred as CIT(A), for AY 2017-18 on 14/03/2025, emanating from Assessment Order u/s 144 of the Income Tax Act dated 9/12/2019.
Submission of ld.AR : It has been submitted by Ld.Authorised Representative of the Assessee that Late Satishkumar B Chadha died in September 2021.
Copy of the death certificate filed by Ld.AR. Ld.AR submitted that the CIT(A) had called for a report from the Assessing Officer but copy of the Remand Report has not been provided to the Assessee for rebuttal. He submitted that Assessee had filed Return of Income.
Ld.AR submitted that Late Satishkumar was maintaining books of accounts hence addition made u/s 69A is bad in law. He filed a case law paper book. Ld.AR submitted that Late Satishkumar was in the habit of withdrawing money from bank and re-depositing it in bank. The Cash withdrawals explains the deposits. Hence no addition can be made.
Submission of Ld.DR : Ld. Departmental Representative Relied on the Assessment Order and Order of the CIT(A).
Findings and Analysis :
We have heard both the parties and perused the records. In this case late Satishkumar B.Chadha (assessee) had filed Return of Income on 09/03/2018. The Return of Income was selected for 2 scrutiny accordingly the Assessing Officer issued various notices.
The Assessee failed to file reply during assessment proceedings. The Assessing Officer passed an ex-parte Assessment order u/s 144 of the income Tax Act making an addition of Rs.16,13,000/- u/s. 69A of the Act. Aggrieved by the Assessment Order the Assessee filed an appeal before the Commissioner of Income Tax (appeal) on 07/01/2020.
4.1 In this case, it is an admitted fact that Late Satishkumar died in September 2021 when the Appeal before the Commissioner of Income Tax (A) was pending against the Assessment Order. However, it is observed that the CIT(A) has passed Appeal Order u/s.250 of the Income Tax Act in the name of Satishkumar Bhagatram Chadha on 14/03/2025, whereas Late Satish Kumar had died in 2021. Therefore, it was the duty of the CIT(A) to bring Legal Heirs of the deceased assessee on record and pass the Order accordingly.
4.2 It is also noted that the Ld.CIT(A) has not provided copy of the Remand Report filed by the Assessing Officer under Rule 46A of the Income Tax Rules to the Legal Heirs of the deceased assessee to rebut the findings of the AO. It is violation of Principle of natural justice.
4.3 In these facts and circumstances of the case, we set aside the Order of the CIT(A) to CIT(A) for de-novo adjudication. The CIT(A) shall bring on record the Legal heirs of the deceased assessee. Also, CIT(A) shall provide copy of the Remand Report to the legal heirs and provide them opportunity of hearing.
In the result, Appeal is allowed for statistical purpose. Order pronounced in the open Court on 28th August, 2025.