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Facts
The assessment order for AY 2013-14 was issued in the name of a deceased assessee, Monisha Dhawan. A notice under Section 143(2) was also issued in the name of the deceased assessee. The assessee's counsel argued that since the proceedings were initiated and conducted in the name of a deceased person without proper notice to the legal heir, the entire assessment is bad in law.
Held
The Tribunal held that the assessment order and the entire proceedings are vitiated and liable to be quashed because the notice under Section 143(2) was not issued in the name of the legal heir of the deceased assessee, which is a mandatory requirement. The assessment order was issued in the name of the deceased assessee and was therefore bad in law.
Key Issues
Whether the assessment proceedings are invalid and liable to be quashed due to the issuance of notice and assessment order in the name of a deceased assessee without proper service on the legal heir.
Sections Cited
Section 143(3), Section 147, Section 250, Section 143(2), Section 148
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Income Tax Appellate Tribunal, DELHI BENCHES : G : NEW DELHI
Before: MS MADHUMITA ROY & SHRI BRAJESH KUMAR SINGH
ORDER PER MADHUMITA ROY, JM:
The instant appeal filed by the Assessee is directed against the order dated 16.08.2023 of the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the assessment order dated 25.12.2019 passed by the ACIT, Cir.28(1), Delhi (hereinafter referred to as ‘the ld. AO’) u/s 143(3) r.w.s. 147 of the Act for Assessment Year 2013-14.
Only upon penalty order being received by the assessee, the impugned order passed by the AO dated 25.12.2019 came to the knowledge of the assessee.
The facts of the case are that the order of assessment was issued in the name of the deceased assessee Monisha Dhawan who died on 23.12.2013. The notice under Section 143(2) was issued on 22.04.2019 in the name of the deceased assessee and the assessment was finalized upon making addition in the hands of the deceased assessee. In fact, the Ld. CIT(A) confirmed the order passed by the Ld. AO which was issued in the name of the deceased assessee Monisha Dhawan.
At the time of hearing of the matter, the Ld. Sr. Counsels for the assessee Shri Salil Kapoor, Advocate and Shri Utkarsa Gupta, Advocate argued in support of the case made out by the assessee that as the impugned order of assessment has been issued admittedly in the name of the deceased assessee, the same is not sustainable in the eyes of law and, thus, the entire proceedings is vitiated and is liable to be quashed. It is the further case made out by the ld. AR that no notice under Section 143(2) of the Act has ever been issued in the name of the Legal Heir of the assessee, namely, Ms Nayana Dhavan whose name has been mentioned by the Ld. CIT(A) in the order impugned. As issuance of notice under Section 143(2) is sine non qua for a proceedings under Section 143(3) of the Act, in the absence of which, in this particular case, the assessment is, admittedly, bad in law and is, thus, liable to be quashed. In this regard, the Ld. Counsels placed reliance on the following case laws:- (i) Savita Kapila vs. ACIT (2020) 426 ITR 502 (Delhi); (ii) Rajender Kumar Sehgal vs. ITO (2019) 414 ITR 286 (Delhi); (iii) DCIT vs. Pranav Gupta (2025) 176 taxmann.com 15 (Delhi-Trib); & (iv) Champat Singh (Through L/H Shri Kannu Singh vs. ITO, wherein it has been decided that notice under Section 148 of the Act in the name of the deceased assessee without being served on Legal Heir, that too within the limitation period, was void ab initio and the entire reassessment proceedings based on such notice issued in the name of the deceased assessee and not the Legal Heir of the assessee were invalid.
In rebuttal, the Ld. DR argued that the final CIT(A)’s order was passed in the name of the Legal Heir of the deceased assessee, however, the CIT(A) failed to furnish/mention any evidence showing that notice under Section 143(2) of the Act was ever been issued and served upon the legal heir of the assessee, namely, Ms Nayana Dhavan.
Under these facts and circumstances of the matter, particularly in the absence of issuance of notice under Section 143(2) of the Act in the name of the legal heir of the assessee, in our considered opinion, the assessment is found to be bad in law and, therefore, is liable to be quashed. In this regard, the Ld. counsels placed reliance on certain case laws (supra) wherein it has been decided that issuance of notice on the Legal Heir within the limitation period is sine non qua and in default the entire proceedings is vitiated and, thus, liable to be quashed. Thus, having regard to the entire aspects of the matter and relying upon the ratio laid down by the different judicial forums as mentioned hereinabove, which is found to be squarely applicable in the case in hand, in the absence of 143(2) notice having not been issued in the name of the Legal Heir of the assessee and further having regard to the assessment order issued in the name of the deceased assessee is found to be bad in law and the entire proceeding is quashed.