Loading judgment…
Facts
The assessee is in appeal against the order of the CIT(A) for AY 2011-12. There was a delay of 95 days in filing the appeal, which was condoned by the Tribunal. The brief facts are that the assessee did not file his return of income, and information from AIR revealed cash deposits of Rs. 66,36,000/-. The AO added Rs. 50,67,000/- as unexplained cash deposits.
Held
The Tribunal held that the argument that notice u/s 147 was issued on a deceased person is not tenable, as it was issued on the legal heir who had a duty to inform the AO about the death. The Tribunal further directed the AO to first determine if any asset was inherited by the legal heirs before working out the tax liability for recovery.
Key Issues
Whether the appeal is maintainable despite a delay, and whether the addition made by the AO on account of unexplained cash deposits is justified, considering the legal heir's inability to provide source details.
Sections Cited
148, 271(1)(b), 159(4), 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
The assessee is in appeal against the order of ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 19.09.2022 passed for assessment year 2011-12.
The Registry has pointed out that there is a delay of 95 days in filing the appeal. The assessee has filed an application submitting therein that her C.A. Shri Amit Sharma did not A.Y.2011-12 2 communicate the impugned order well in time and because of that, the appeal could not be filed.
After going through the affidavit of Smt. Swaran Kaur, widow of late Shri Inder Singh and the explanation filed by the assessee, we are satisfied that assessee was prevented by reasonable cause for not filing the appeal well in time. Therefore, we condone the delay in filing the appeal and proceed to decide it on merit.
The assessee has taken six grounds of appeal but her grievance revolves around two-fold of issues, namely; (a) The ld. CIT (Appeals) erred in deciding the appeal ex-parte, and (b) The ld. CIT (Appeals) has erred in confirming the addition of Rs.50,67,000/- and Rs.6,292/- which were added by the AO on account of unexplained cash deposits in the bank account.
The brief facts of the case are that assessee did not file his return of income. An information has been received by the AO from AIR Information Report Wing exhibiting that a sum of Rs.66,36,000/- has been deposited in cash with State Bank of India. The AO has recorded reasons that income has escaped A.Y.2011-12 3 assessment and accordingly, issued notice u/s 148 of the Income Tax Act.
During the course of hearing, Shri Amarjeet Singh, CA appeared on behalf of assessee and submitted that two pieces of land was sold and assessee has received a sum of Rs.15,69,000/-. The AO has given credit of this amount against the alleged cash deposits in the bank and accordingly, made addition of the balance i.e. Rs.50,67,000/-.
Appeal to the ld.CIT (Appeals) did not bring any relief to the assessee. Though CIT (Appeals) has confirmed the addition by way of an ex-parte order because no one has appeared on behalf of assessee in response to the notice. Even before the AO, assessee has not appeared initially and ultimately, AO has to issue a notice for imposing penalty u/s 271(1)(b) of the Act for non-compliance of the notice. The ld. counsel for the assessee appeared thereafter only. However, we have permitted the ld. counsel for the assessee to argue on merits. We have invited attention to show us the source from where these deposits have been made. She has only apprised us that two pieces of land were sold but credit of those A.Y.2011-12 4 amounts have already been given by the AO. When we put this question again, then she said that since Shri Inder Singh has died long back, therefore, she could only tell what was the source. The Legal Heir does not have any information. She expressed her inability for explaining the source of such deposits before us. She only pointed out that notice u/s 147 was issued on a deceased person, but this argument is not tenable because such notice was issued on the Legal Heir of the deceased and it was incumbent upon the Legal Heir to inform the AO about death of Shri Inder Singh. The assessee, Shri Inder Singh was non-filer of the return, thus it was the duty of the Legal Heir to inform the Income Tax Department that Shri Inder Singh has died. It is also to be noted that Legal Heirs could have filed his return after his death and discharge the tax liability, if any, but no such steps have been taken by them. Therefore, we do not find any merit in this alternative argument of the ld. counsel for the assessee.
Before parting with this order, we would observe that Section 159 sub-clause (4) contemplates that Legal Heir will be able to discharge the tax liability of the deceased to the A.Y.2011-12 5 extent they have inherited the asset of the deceased. In case, nothing has been inherited by the Legal Heirs, then no tax liability could be fastened upon them. Therefore, we direct the AO to first determine whether any asset has been inherited by the Legal Heirs or not and only thereafter, work out the tax liability for recovery.
With the above observation, this appeal is dismissed.
Order pronounced on 27.08.2025.