ACIT 5(2)(1), MUMBAI vs. LATE DARSHANJIT SINGH [ LEGAL HEIR - CHARANDEEP SINGH ], MUMBAI

At the outset, the learned Counsel for the assessee stated that he has raised the issue regarding jurisdiction of assessment assumed by AO while passing assessment order under section 143(3) of the Act dated 24.03.2014 in the name of dead person. According to the learned Counsel the assessment order is bad in law and is to be quashed. The learned Counsel drew our attention to the grounds raised in the CO which reads as under: -

Briefly stated facts are that the assessee expired on 12.11.2010. The legal heir of the assessee informed the AO during the course of assessment proceedings for AY 2008-09 on 09-12-2010. Despite the fact that this information was available with the AO even during the AY 2011- 12, the year under consideration, the AO issued notice under section 143(3) and 142(1) on the deceased and thereafter framed the assessment on the assessee as if he is alive. During the course of assessment proceedings for this AY 2011-12 even the AO was informed about the death of the assessee vide letter dated 28-01-2014 by filling copy of legal heir certificate issued by the office of Collector and District Magistrate, Mumbai. The relevant information is available on record now. The information given by assessee to AO vide letter dated 28.01.2014 reads as under: -

The above facts clearly show that despite the fact that it was within the knowledge of the department that assessee has expired. When a query was put to the learned Sr. DR he only relied on the assessment order and the order of the CIT(A).

After hearing the rival contentions and going through the facts and circumstances of the case, we find that the assessee has expired on 12.11.2010 and it was within the information of the AO during the course of assessment proceedings for 2008-09 and even for the AY 2011-12 i.e.

We find that the assessee Darshanjit Singh died on 12.11.2010 and assessment was framed on 24.03.2014, on a dead person and legal heirs are not brought on record by substituting in term of section 159 of the Act. Once this is the position, the assessment is to be made in the hands of late Darshanjit Singh although through legal heirs by adopting the procedure prescribed u/s. 159 of the Act. The AO has not gone into this aspect despite the fact that he was informed that assessee Late Darshanjit Singh has already expired on 12.11.2010 much before the start of the assessment proceedings. In term of the facts and circumstances, the assessment of the deceased person can be assessed by adopting the procedure prescribed u/s.159 of the Act. The revenue, if law permits, can take action on legal heirs to make the assessment after adopting the procedure prescribed u/s. 159 of the Act. Accordingly, this legal issue is deciding in favour of the assessee and the appeal of assessee is allowed.

Since, we have allowed the jurisdictional issue in favour of assessee, we need not go into merit as we have already quashed the assessment.

In the result, the Cross Objection of the assessee is allowed and appeal Revenue is dismissed.