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Facts
The assessee, an individual, filed his return for AY 2014-15. The Assessing Officer (AO) passed an ex-parte assessment order under section 144, making additions for cash deposits and credit entries, and disallowing deductions under sections 80C and 80TTA. The assessee's legal heir filed an appeal after the assessee's death. The CIT(A) set aside the assessment order and remanded it to the AO for fresh assessment.
Held
The Tribunal held that the assessment order passed against a deceased person without proper legal representation or opportunity to be heard is void ab initio. Relying on precedent, the Tribunal did not concur with the CIT(A)'s order of setting aside and remanding the case, and instead allowed the assessee's appeal.
Key Issues
Whether an assessment order passed against a deceased assessee without proper legal heir representation is void ab initio, and whether the CIT(A) was justified in remanding the matter back to the AO.
Sections Cited
147, 144, 144B, 69A, 80C, 80TTA, 251, 153(3), 253
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA No. 313/JPR/2025
ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against the order of learned National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated31.01.2025 for the assessment year 2014-15 raising therein following grounds of appeal. ‘’1. The ld. CIT(A) has erred in law as well as on facts of the case by setting aside the assessment order instead of quashing the same which was passed in the name of deceased assessee.
2. The ld CIT(A) has erred in law as well as on facts of case by not deleting the addition of Rs.71,05,899/- made u/s 69A of the Income Tax Act, 1961.
2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER 3. The ld. CIT(A) has erred in law as well as on facts of the case by not allowing deduction of Rs.1,00,000/- and Rs.10,000/- u/s 80C and 80TTA of the Income Tax Act, 1961 respectively.
2.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) restored the grounds of appeal raised before him who set aside the assessment order to the file of the AO to decide the issue afresh in accordance with the principles of natural justice and in accordance with law. The narration so made in the order of the ld CIT(A) is reproduced as under:- 5.0 Appellate findings: 5.1 I have carefully considered the grounds of appeal, facts of the case, the assessment order, submissions made by the appellant and the law applicable to the facts of the case. From the record it is seen that the assessment order has been passed u/s 147 r.w.s 144 read with section 144B of the Act, after taking into account all relevant material which the AO had gathered, making an assessment of the total income to the best of his judgement and determining the sum payable by the Appellant on the basis of such assessment. Since the assessment has been completed u/s 147 r.w.s 144 read with section 1448 of the Act, the Appellant clearly did not have the reasonable opportunity to present his case before the AO. 5.2 It is a well-established judicial principle enshrined in the dictum audi alteram partem that the other party must be given adequate opportunity of being heard before the authorities arrive at any conclusion in respect of the case of that other party. It may be pointed out that the Finance (No.2) Act, 2024 has amended the provisions of section 251 of the Act by inserting a proviso therein which stipulates that where an appeal is against the order of assessment made u/s 144 of the Act, the CIT(A) may set aside the assessment and refer the case back to the AO for making a fresh assessment. In this context, Memorandum Explaining the Provisions in the Finance (No.2) Bill, 2024 also explains that the cases where assessment order was passed as best judgement case u/s 144 of the Act, CIT(A) shall be empowered to set aside the assessment and refer the case back to the AO for making a fresh assessment. This amendment takes effect from the 1st day of October, 2024 and is applicable to appellate orders passed by the CIT(A) on or after 01.10.2024.
2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER 5.3 Further, a consequential amendment has been made in section 153(3) of the Act in order to provide the time limit for disposal of cases by the AO which are set aside by the CIT(A). 5.4 In view of the law as it stands amended by the Finance (No.2) Act, 2024 with effect from 1st October, 2024 and the facts and circumstances of the case, I am of the considered view that the assessment made by the AD u/s 147 r.w.s 144 read with section 1448 of the Act, being ex-parte assessment made without affording adequate opportunity to the Appellant, is fit to be set aside and referred back to the AO for making a fresh assessment. I hold accordingly. Therefore, the assessment passed uis 144 of the Act is hereby set-aside. 6.0 The AO is directed to provide adequate opportunity to the Appellant of being heard in accordance with principles of natural justice and in accordance with law. The AO is also directed to allow the Appellant to file all necessary and relevant evidences and explanation to support its contentions in its defense 7.0 In the result, the assessment passed by the Assessing Officer u/s 144 of the I.T. Act 1961, is hereby set-aside.’’ 2.2 During the course of hearing, the ld. AR of the assessee submitted that the AO was not justified in making assessment in the name of deceased person Shri Gajendra Nath Srivastav who passed away on 5-06-2021 at St. Frances Hospital, Bewar Road, Ajmer whereas the assessment was made by the AO on 26-03-2022. The ld. AR of the assessee also filed the death Certificate of late Shri Gajendra Nath Srivastava. It is pertinent to mention that the ld. AR of the assessee has filed the detailed written submission before the Bench which is almost same as submitted before the ld. CIT(A) and thus it is not required to repeat the same. Further The ld. AR of the assessee invited the attention of 2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER the Bench that after the death of late Shri Gajendra Nath Srivastava i.e. on 5-06-2021, the legal heir of the assessee i.e. Smt. Vipin Devi Srivastava had filed a request on Income Tax E-Filing Portal to act as legal Representative of the deceased assessee on 25-12-2021 and the same was approved on 28-12-2021 (PB-2). Thereafter the Income Tax Return for A.Y. 2021-22 was filed by Legal Representative of the assessee on 30-12- 2021 i.e. well before the concerned assessment order was finalized by the AO (PB-3). He further submitted that there was no mechanism prescribed in Income Tax Law to intimate the Assessing Officer regarding death of the assessee other than to file Legal Heir request on Income Tax E-Filing portal which the legal heirs of the assessee had duly complied on 25-12- 2021 and the request was approved on 28-12-2021. He further submitted that in spite of all these communication to the Department, the AO passed assessment order u/s 147 r.w.s. 144 read with Section 144B of the Act on 26-03-2022 in the name of the deceased assessee i.e. Shri Gajendra Nath Srivastav. Thus the ld. AR of the assesee submitted that the said assessment order passed by the AO is void ab initio and he relied upon the decision of ITAT Mumbai Bench in the case of Shri Avinash V Vyas, legal heir of late Sita Vinod vs ITO, Ward 12(2)(3), Mumbai (ITA No. 3538 & 3539/Mum/10 dated 20-07-2011 wherein it is held that ‘’Sufficient material 2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER was available before the Assessing Officer that the assessee had died. Still the Assessing Officer has passed the order against a dead person. Therefore, in our opinion, the entire assessment proceedings becomes a Nullity’’ (PB 4 to 10). He further submitted that the ld. CIT(A) has set aside assessment to the file of the AO for afresh assessment instead of quashing the assessment order as the order passed by the AO has no validity in the eye of law. 2.3 During the course of hearing, the ld. DR supported the order of the ld. CIT(A)and also filed the following submission to counter the submission made by the ld.AR of the assessee. ‘’BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR In the matter of: Appeal under Section 253 of the Income Tax Act, 1961 Assessee: Gajendra Nath Shrivastava Th.L/H Vipin Devi Srivastava Respondent: The Income Tax Officer, Ajmer Assessment Year: 2014-15 ITA No.: 313/JP/25 PAN-ABSPS1013J LEGAL NOTE ON PRELIMINARY OBJECTION TO ΜΑΙΝΤΑΙNABILITY OF APPEAL Filed on behalf of the Respondent Revenue Respected Hon'ble Members, The undersigned respectfully submits the following preliminary objection on a question of maintainability of the present appeal 1. The Order of CIT(A) is a Remand Order - No Finality 1.1 In the present case, the Ld. CIT(A), by exercising powers conferred under section 251(1)(c) [as amended by Finance Act, 2024 wef 01.04.2024), has set aside the original assessment order and remanded the matter back to the Assessing Officer (AO) for fresh assessment 2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER 1.2. As a result, there exists no final order of assessment or adjudication against which an appeal under section 253 can be entertained at this stage. The matter is pending de novo before the AO, and hence the appeal is premature and not maintainable 2. Law Declared by Hon'ble Supreme Court-Appeal Against Remand is Not Maintainable 2.1 The Hon'ble Supreme Court in CIT v. ITAT &Anr. [(1999) 235 ITR 175 (SC)] held that "Only a final order that determines the rights of the parties can be subject to appeal. A remand order, which does not adjudicate the merits of the case, is merely procedural and not appealable" 2.2. Similarly, in CIT v. V.K. Aggarwal [(1998) 233 ITR 200 (SC)], it was observed "An appeal does not lie agamst an order which merely sets aside an assessment and remands the matter for fresh adjudication" 2.3 These judgments confirm that when the CIT(A) sets aside an order and remands the matter to the AO, no appealable "order" exists, and such appeals are not maintainable under section 253 of the Income Tax Act.
Tribunals Have Consistently Rejected Appeals Against Remand Orders 3.1 Following the Supreme Court, various Benches of the ITAT have consistently held that appeals against remand orders are not maintainable ITO v. Khalil M. Bharucha [(2003) 85 ITD 647 (Mum) (SB)] Special Bench held that remand orders are interlocutory and not appealable CIT v. Dinesh D. Dania [(2012) 208 Taxman 108 (Bom)] High Court affirmed that such appeals are not valid 4. Premature Appeal May Obstruct Fresh Proceedings 4.1. Entertaining the present appeal, when no effective rights have been prejudiced and the matter is pending for fresh adjudication, would result in unnecessary litigation and delay the reassessment process. 4.2. The proper course for the assessee is to participate in the reassessment proceedings before the AO, and if aggrieved thereafter, file an appeal on the fresh order 2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER PRAYER In view of the above settled legal principles and facts It is respectfully prayed that the present appeal be dismissed as not maintainable at this stage, being filed against a non-final, remand order of the CIT(A), The Hon'ble Bench may kindly record that no cause of action survives and the remedy, if any, lies only after the fresh order is passed by the AO; Such dismissal would be consistent with the binding law laid down by the Hon'ble Supreme Court.’’ 2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee is an individual and filed the return of income for the assessment year 2014-15 on 26-07-2017 declaring an income of Rs.5,79,450/- which comprises of income under the head ‘’Income from House Property’’, Profit and Gains from Business’’ and ‘’Income from other sources. In this case, it is noted that the AO passed an ex-parte order u/s 144 of the Act as the assessee neither complied with the notices in spite of various opportunities nor offered any plausible explanation to substantiate the sources for cash deposits and credit entries made in the bank account as mentioned in the assessment order during the financial year 2013-13. Thus the AO made addition of Rs.71,05,899 on account of cash deposits and credit in his bank account, addition of Rs1,10,000/- u/s 80C and Rs.10,000/- u/s 80TTA. In first appeal, the ld.CIT(A) restored the matter to the file of the AO for de novo assessment 2025 LATE GAJENDRA NATH SRIVASTAV THRU: L/H SMT.VIPIN DEVI SRIVASTAV VS ITO WARD 2(1), AJMER by providing adequate opportunity of being heard to the assessee in accordance with the principles of natural and in accordance with law. The apple of discord in this case is that the assessee Shri Gajendra Nath Srivastava has passed away on 05-06-2021 and the assessment was made the AO vide his order dated 26-03-2022 for which the Legal Heir of the assessee i.e. Smt. Vipin Devi Shirivastava had filed a request on Income Tax E-filing Portal to act as Legal Representative of the deceased assessee on 25-12-2021 and the same was approved on 28-12-2021 which indicates that there is no legal validity in the eye of law. We take reliance in the case of Shri Avinash V Vyas, legal heir of late Sita Vinod vs ITO, Ward 12(2)(3), Mumbai (ITA No. 3538 & 3539/Mum/10 dated 20-07- 2011 wherein it is held that ‘’Sufficient material was available before the Assessing Officer that the assessee had died. Still the Assessing Officer has passed the order against a dead person. Therefore, in our opinion, the entire assessment proceedings becomes a Nullity’’. Hence respectfully following the decision of ITAT Mumbai Bench in the case of Shri Avinash V Vyas, legal heir of late Sita Vinod vs ITO, Ward 12(2)(3), Mumbai, we do not concur with the findings of the ld. CIT(A). Thus the appeal of the assessee is allowed.
Order pronounced in the open court on 20 /05/2025.
Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20 /05/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant-Shri Gajendra Nath Srivastav Thru” L/H Smt.Vipin Devi Srivastav, Ajmer 2. izR;FkhZ@ The Respondent- The ITO, Ward 2(1), Ajmer 3. vk;djvk;qDr@ Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No.313/JPR/2025) vkns'kkuqlkj@ By order,
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