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Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI AMIT SHUKLA
O R D E R PER AMIT SHUKLA, JM:
The aforesaid appeal has been filed by the assessee against the impugned order dated 28.09.2018, passed by ld. Commissioner of Income Tax (Appeals), Ghaziabad for the quantum of assessment passed u/s.147/144 for the Assessment Year 2010-11. In the grounds of appeal
, the assesse has raised following grounds:-
1. That in law and on facts the re-assessment made u/s.147/144 read with section 159 of the IT Act is illegal and deserves to be cancelled.
1a. That the notice u/s. 148 dated 30-03-2017 was issued to a dead person and therefore not served hence is invalid resulting in an invalid assessment.
2. That the deceased (Late Shri Shiv Prashad) died on 04-02- 2014 and hence the first notice u/s 148 dated 30-03-2017 could not be issued and served on the deceased person.
That on initiating the above proceedings, which are invalid culminating in the re-assessment order dated 18-12-2017 in the name of legal heir is also invalid and hence ought to be quashed.
4. That in the absence of the valid notice its issuance, service and proceedings pursuant thereto and orders passed are illegal and invalid.
5. That cash deposit amounting to Rs. 4735000 in the bank account of the deceased during F.Y. 2009-10 (when he was alive) does not constitute undisclosed escaping assessment which can be assessed u/s, 147/148 of IT Act.”
The facts in brief qua the issue of validity of reopening are that, a notice u/s.148 was issued on 30.03.2017 on the basis of information that, Late Shri Shiv Prashad had deposited cash amounting to Rs.47,35,000/- in his bank account during the Assessment Year 2010-11. As noted by the Assessing Officer that no compliance to the notice u/s.148 was made nor any return of income was filed and even otherwise also none of the notices were served. In absence of any compliance, he added the entire amount of cash deposit of Rs.47,35,000/- as unexplained cash credit.
3. Before the ld. CIT (A), the assessee has challenged the validity of jurisdiction u/s.147 on the ground of non-service of notices upon the assesse in the capacity of legal heir and submitted that this cash was deposited by late Shri Shiv Prashad who has expired on 04.02.2014, which was much before the commencement of the re-assessment proceedings and he is unable to disclose the nature of impugned cash deposits. Besides this, detailed submission was also made which is incorporated in the appellate order. However, the ld. CIT (A) has confirmed not only the reopening u/s.147 but also the addition made by the Assessing Officer.
After hearing both the parties and on perusal of the relevant material placed before us, we find that the notice u/s.148 dated 30.03.2017 has been issued in the name of Shiv Prashad, S/o Dulichand, Village-K Ayas Thgawri, Post- Mohiuddinpur, Meerut-250010. However, before issuance of notice u/s.148, the assesse had expired on 04.02.2014, the reason for re-opening was based on AIR information that the assesse had deposited Rs.47,35,000/- in his savings bank account maintained with State Bank of India, Modi Nagar. The reasons were recorded to verify the source of the said cash deposit. However, nowhere it has been mentioned either in the assessment order or in the appellate order that the notice u/s.148 has been served on the legal heir of the assesse. Even before us, no material has been brought on record or any evidence regarding service of notice u/s.148. It is a well settled proposition of law that the notice u/s.148 issued in the name of a dead person long after his death cannot be held to be valid unless the notice not only is addressed in the name of legal heir but also served in accordance with the law. The valid service of notice is a condition precedent for acquiring jurisdiction to initiate re- assessment proceedings. The law is settled by the Hon’ble Supreme Court way back in 1959 in the case of Y. Narana Shetty vs. ITO, (1959) 35 ITR 388 (SC) that the service of notice is mandatory is a condition precedent to re-initiate re- assessment proceedings and if notice issued is invalid, then the entire proceedings become illegal and void. This has been further reiterated by the Hon’ble Jurisdictional High Court in the case of CIT vs. Shital Prashad (2006) 280 ITR 541 (Alld.), wherein their Lordships have held as under: “It is fairly settled that an Assesing authority gets jurisdiction to re- open a concluded assessement only after serving a valid notice on the assesse. A notice contemplated u/s.148 of the Act is a jurisdictional notice and not curable under section 292B of the Act, if it was not served in accordance with the provisions of the Act.”