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Facts
The Legal Heir of Mr. Kiritkumar Rasirlal Mehta appealed against an assessment order for AY 2010-11, where a notice under Section 148 was issued and an assessment completed against the deceased person. The assessee died on 21-08-2009, prior to the notice issuance. Additionally, the disputed investment was made in FY 2008-09 (AY 2009-10), not the assessment year under consideration.
Held
The tribunal held that the notice under Section 148 and the subsequent assessment order passed in the name of a deceased person are null and void, relying on a Bombay High Court decision. It further found that since the investment occurred in FY 2008-09, any addition for AY 2010-11 was bad in law. The appeal was therefore allowed.
Key Issues
The validity of assessment proceedings and notice under Section 148 issued against a deceased person, and the correctness of taxing an investment in an assessment year different from when it was made.
Sections Cited
250, 148, 147, 159(2), 292BB, 133(6), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Assessee by None Revenue by Shri Ratnakar Shelake – Addl.JCIT(DR) Date of hearing 30/04/2025 Date of pronouncement 30/04/2025 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Legal Heir of the diseased(Mr.Kiritkumar Rasirlal Mehta) is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961, dated 10.11.2024 for Assessment Year 2010-11. The Assessee has raised the following Grounds of Appeal :
1. That the AO by passing the order and Ld. CTT(A) confirming the order both have grossly erred in passing the order against the deceased person, who had died on 21-08-2009 and, as such, the order as passed by the Ld. CIT (A) null and void.
That since the above assessee had died even before the notice under section 148 was issued and, as such, the completion of assessment by the Ld. Assessing Officer in the name of deceased person is void ab initio and, thus, the assessment as framed deserves to be quashed.
Whether on the facts and circumstances of case, reasons to believe recorded for Notice u/s 148 are valid without considering the fact that the investment in mutual fund was done in FY 2008-09 (not falling within relevant year) and therefore, the notice, being based on incorrect information, is void ab initio thus the assessment is required to annulled as bad in law.
Whether on the facts and circumstances in law AO and CIT(A) is correct in treating the investment u/s 69A when the source can be explained.”
Submission of ld.AR : 2. At the outset of hearing, no one appeared on behalf of the assessee. Neither any adjournment letter was submitted. Legal Heir had filed a paper book and written submission.
Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of the Assessing Officer.
Findings & Analysis : 4. We have heard both the parties and perused the records. In this case, notice u/s.148 for A.Y.2010-11 was issued on 29.03.2017. The Assessment Order was passed on 14.12.2017 for A.Y.2010-11 in the name of Shri Kiritkumar Rasirlal Mehta.
4.1 Aggrieved by the assessment order, Assessee has filed appeal before the ld.CIT(A)-2, Kolhapur on 22.06.2018.ld.CIT(A) Kolhapur called for a Remand Report from the Assessing Officer vide his letter dated 04.11.2019. The Assessing Officer, ITO, Ward- 2(2), Kolhapur vide letter no.KOP/ITO,W-2(2)/Remand Report/2019-20 dated 21.11.2019 filed the Remand Report before ld.Commissioner of Income Tax(Appeals)-2, Kolhapur. The legal heir of the diseased Mr.Kiritkumar Rasirlal Mehta filed paper book which contains copies of the Remand Report at page no.20 to 22 of the paper book.
4.2 The relevant paragraphs of the Remand Report is reproduced here as under : “4.3. The validity of the Death Certificate has been verified from the Kolhapur Municipal Corporation's website. As per the website, it is seen that the assessee - (Late) Kirit Rasiklal Mehta, died at the age of 73 years at Lotus Hospital, Kolhapur. The Death Certificate is registered on 08.09.2009 under Registration No.4461. Screenshot of verification of data is placed on record after verification. ……………..
Considering the fact that the assessee has basically taken objection the Hon'ble CIT(A) for issue of Notice u/s 148 on dead person, provisions of section 1 59(2)/292BB and various judgments in this regard, the assessee's submission has force.
Without prejudice to the above, during appellate proceedings, the assessee has filed copies of extracts of statements of Principal PNB Asset Management Company Pvt. Ltd., Mumbai, wherein it is seen that the investment in the mutual fund had been done on 18.06.2008 and 17.06.2008 which fall in the AY 2009-10 and not AY 2010-11. On verification of records, it is seen that during the assessment proceedings, the AO had called for information u/s 133(6) from the Principal PNB Asset Management Company Pvt. Ltd., Mumbai. The information was submitted by the said Company and the same are available on record. Further, as per ITS information generated through ITD module, it is seen that the assessee had purchased Mutual Fund of Rs.5,00,000/- on 18.06.2008 which falls in AY 2009-10 and not in AY 2010-11 under consideration. There is force in the assessee's submission.” 4.3 Thus, in the Remand Report the Assessing Officer, ITO,Ward- 2(2), Kolhapur has accepted that notice u/s.148 was issued in the name of a diseased Mr.Kiritkumar Rasirlal Mehta. The ITO further accepted that investment was made in F.Y. 2008-09 and therefore it cannot be taxed in A.Y.2010-11. However, ironically ld.CIT(A)[NFAC] ignored the Remand Report and confirmed the addition. Ironically, it is an admitted fact by the Assessing Officer, in the assessment order para 5 that Mr.Kiritkumar Rasirlal Mehta has expired, in spite of that Assessing Officer passed an order in the name of Mr.Kiritkumar Rasirlal Mehta.
4.4 No notice can be issued and served on diseased assessee. In this case, admittedly, notice u/s.148 was issued in the name of diseased assessee i.e.Mr.Kiritkumar Rasirlal Mehta. Mr.Kiritkumar Rasirlal Mehta has expired on 21.08.2009. Copy of Death Certificate is on record and this fact has been verified and confirmed by the Assessing Officer.
4.5 The Hon’ble Bombay High Court in the case of Devendra Vs. Addl/Joint Commissioner of Income Tax 461 ITR 463 (Bom) has held as under : “24. The Principal Seat of this Court has recently passed the order in Dhirendra Bhupendra Sanghvi v. Asstt.CIT [2023] 151 taxmann.com 541/[Writ Petition No.10163 of 2022, dated 27-6-2023] and has observed thatthe notice issued on dead persons is null and void.
For the reasons stated above and several High Courts have observed that the notice issued on dead personor re-opening of assessment of a dead person is null and void, this Court holds that the notice and allconsequential proceedings in the name of the deceased assessee are null and void and consequentially theimpugned notice dated 31-3-2021 under section 148 of the Income-tax Act is quashed and set aside and allactions in furtherance thereto are prohibited. Hence, the petition is allowed.” 4.6 Respectfully following the decision of Hon’ble jurisdictional High Court, we hold that notice u/s.148 and the subsequent order u/s.147 passed in the name of diseased assessee is bad in law. Accordingly, the notice u/s.148 and order u/s.147 is quashed.
4.7 Even otherwise, the ITO in the Remand Report has certified that the investment was made in F.Y.2008-09 and hence, it cannot be taxed in A.Y.2010-11. Thus, the addition made in A.Y.2010-11 is bad in law. Therefore, grounds of appeal raised by the legal heir of the diseased are allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 30th April, 2025.