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Facts
The assessee, a deceased individual, had made cash deposits during the demonetisation period. The Assessing Officer treated these deposits as unexplained under section 69A of the Income Tax Act, 1961. The legal heir submitted evidence of the source of funds, including matured fixed deposits and personal savings.
Held
The Tribunal held that an assessment made in the name of a deceased person without substituting the legal heir is null and void. The Tribunal also found that the cash deposits were reasonably explained and substantiated by documentary evidence, considering the age and background of the deceased assessee.
Key Issues
Whether the assessment order passed in the name of a deceased person without legal heir substitution is void ab initio and whether the cash deposits were unexplained under section 69A of the Act.
Sections Cited
69A, 250, 144
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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 14/05/2025 Date of Order – 09/06/2025
O R D E R PER K.M. ROY, A.M.
The instant appeal by the assessee is against the impugned order dated 15/01/2025, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18.
Following grounds have been raised by the assessee:–
“1. Whether on the facts and in law, the order passed by the learned CIT(A) under section 250 of the Act is bad in law. 2. Whether on the facts and in law, the ex-parte order passed by the CIT(A) is bad in law. 3. Whether on the facts and in law, the learned CIT(A) erred in confirming the addition of Rs. 18,46,961/- under section 69A of the Income Tax Act.
2 Rajesh Punyani L/H of Late Bhagwandas Punyani ITA no.179/Nag./2025 4. Whether on the facts and in law, the learned CIT(A) erred in confirming the assessment order passed under section 144 in the name of a deceased individual without considering the legal heir's submissions.
5. Whether on the facts and in law, the learned CIT(A) erred in disregarding the legal heir's submission that the cash deposits were from matured FDRs, personal savings, and family contributions, thereby failing to consider the factual circumstances.
6. Whether on the facts and in law, the learned CIT(A) erred in dismissing the appeal without granting sufficient opportunity to furnish additional documentary evidence, thereby violating the principles of natural justice.
The appellant craves leave to add, alter, vary, omit, amend, or delete one or more of the above grounds of appeal before, or at the time of, hearing of the appeal, so as to enable the Hon'ble Tribunal to decide this appeal according to law.”
Brief Facts:– In this case, the deceased assessee had made cash deposits of ` 18,42,500, during the demonetisation period between 09/11/2016 and 30/12/2016. The assessment was completed and the addition of ` 18,42,500, was made treating the cash deposits as unexplained under section 69A of the Income Tax Act, 1961 ("the Act") .
The learned Counsel for the assessee brought to our notice that the assessee expired during assessment proceedings i.e., on 30/04/2018. It was submitted that this fact was duly intimated to the Assessing Officer by the legal heir vide letter dated 17/06/2019, enclosing therewith death certificate and relevant bank statement and these documents are placed on record before the Tribunal vide Page–1 to 9 of the Paper Book filed by the assessee.
We find merit in the legal contention that once the Assessing Officer was informed about the death of the assessee, the assessment could not have been validly completed in the name of the deceased individual without bringing the legal heir on record. Here, we refer to the judgment of the 3 Rajesh Punyani L/H of Late Bhagwandas Punyani ITA no.179/Nag./2025 Hon’ble Supreme Court rendered in of PCIT v/s Maruti Suzuki India Ltd. [2019] 416 ITR 613 (SC), and the Co–ordinate Bench of the Tribunal, Ahmedabad Bench, rendered in Rinju Adityakumar Gogoi, L/H of Late Aditya Kumar Gogoi v/s ITO, ITA no.393/Ahd./2024, vide order dated 14/05/2024, wherein the Tribunal have clearly held that any assessment made in the name of a deceased person is null and void, once the Revenue is aware of the death and yet proceeds without substituting the legal representatives. We also find that the assessee was a super senior citizen at the age of 92 years at the time of his death and the explanation given by the legal heir regarding the source of cash deposits is duly substantiated with evidence. Out of the total deposit of ` 18,42,500, ` 13,82,000, was withdrawn by the assessee from his bank account on 28/05/2014, on maturity of a fixed deposit, originally made in the year 2004 and renewed periodically until maturity on 26/05/2014. The relevant bank statement is placed on record at Page–4 to 9 of the Paper Book. The remaining amount of ` 5,50,000, was explained as being out of past personal savings, family maintenance and support received from family members, which is a plausible explanation considering the age and background of the deceased assessee. Keeping in view the overall facts and circumstances of this case and considering the explanation and documentary evidence, we find no justification to treat the deposits as unexplained under section 69A of the Act. The cash deposit is reasonably explained and no contrary evidence has been brought before us by the Revenue. Consequently, we set aside the impugned order passed by the learned CIT(A) and direct the Assessing Officer to delete the addition of ` 18,46,961, under section 69A of the Act by treating the assessment order as void ab initio, as it was passed in 4 Rajesh Punyani L/H of Late Bhagwandas Punyani ITA no.179/Nag./2025 the name of the deceased person despite prior intimation of death. The assessee has satisfactorily explained the source of cash deposit on merit
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 09/06/2025