What did the Tribunal hold?

The Tribunal held that an assessment cannot be made on a deceased person for an assessment year in which they were not alive. Any additions on account of unexplained expenditure should have been made in the hands of the legal heir.

The assessment year in question is 2012-13. The assessee, Ashwin Dhirajlal Dhabalia, had expired on January 28, 2010, prior to the assessment year. The legal heir admitted to using the deceased's credit card for expenses.

What were the issues?

The primary issue was the validity of an assessment order passed against a deceased person. The secondary issue concerned the correct recipient of any addition for unexplained expenditure.

Late Ashwin Dhirajlal Dhabalia… vs ITO | ITAT Ahmedabad 2022

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SMT.ANNAPURNA GUPTA

Hearing: 20/09/2022Pronounced: 30/09/2022

(Applicant) (Responent) : Shri Rupesh R. Shah, AR Assessee by Revenue by : Shri Mukesh Sharma सुनवाई क� तार�ख/Date of Hearing : 20/09/2022 घोषणा क� तार�ख /Date of Pronouncement: 30/09/2022 आदेश/O R D E R The present appeal has been filed by the assessee against order passed by the Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi in short referred to as ld.CIT(A)) under section 250(6) of the Income Tax Act, 1961 ("the Act" for short), dated 17.3.2021 pertaining to Asst.Year 2012-13.

Before me, the assessee has challenged validity of the assessment order passed in the present case on the ground that the assessment had been made on a dead person. The ground raised by the assessee in this regard reads as under:

2 “1. That your appellant prays that order is passed on dead person may be declared as invalid looking to the facts in the interest of justice.”

The impugned assessment year before me is Asst.Year 2012- 13 pertaining to the financial year 2011-12. As transpires from the orders of the authorities below, the assessee, Shri Ashwin Dhirajlal Dhabalia had expired on 28.1.2010 , i.e in F.Y 2010-11 pertaining to A.Y 2011-12 and this fact was brought to the notice of the AO during the course of assessment proceedings itself on the first occasion, by the legal heirs. Therefore, for the impugned assessment year before me i.e. Asst.Year 2012-13 the assessee was not even alive. Besides addition has been made on account of credit card payment made from the credit card in the name of the deceased assessee amounting to Rs.8,29,830/- which the legal heir was unable to explain the source of payment during the assessment proceedings. The legal heir admitted to utilizing the credit card, which continued in the name of the deceased assessee, to the extent of Rs.3,69,169/- and considering the details submitted by him regarding this utilization, the Ld.CIT(A) deleted addition made to this extent. The assessee insisted that he had utilized the credit card to this extent only.

Considering the above facts, we agree that the addition could not have been made in the hands of the deceased assessee at all, who was not alive during the impugned year and the card admittedly had been used by his legal heir. Any addition on account of unexplained source of expenditure in such circumstances could have been made in the hands of the legal heirs only in their individual capacity only.

3 The assessment framed therefore in the hands of the assessee is set aside.

In the result, appeal of the assessee is allowed.

Order pronounced in the Court on 30th September, 2022 at Ahmedabad.

LATE ASHWIN DHIRAJLAL DHABALIA (L/H PRATIK ASHWIN DHABALIA),AHMEDABAD vs. THE ITO, WARD-6(1)(4), AHMEDABAD

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