Loading judgment…
Facts
The assessment for AY 2001-02 for Late Shreeniwas Joshi was initially completed u/s 143(3). Later, a reassessment order u/s 147/144 was passed on 30.12.2008. The core issue arose because both the original assessee and his first legal heir (Smt. Sita Devi Joshi) had passed away before the subsequent assessment order dated 18.12.2018 was framed, despite the current legal heir (Shri Suresh Joshi) having informed the Assessing Officer of their demise.
Held
The Tribunal held that the assessment order dated 18.12.2018 was bad in law, null, and void, as it was passed against non-existent persons without issuing fresh notice to the correct legal heir. This action violated principles of natural justice and statutory compliance. Consequently, the impugned order and the alleged addition were quashed.
Key Issues
Whether an assessment order passed against a deceased assessee/legal heir without issuing fresh notice to the correct legal heir is valid.
Sections Cited
250, 143(1), 143(2), 143(3), 147, 144, 142(1), 153(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, RANCHI
Before: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay
Assessment Year: 2001-02 Late Shreeniwas Joshi....................................…...........................……….……Appellant Through L/H Suresh Joshi, Adarsh Market, Upper Bazar, Ranchi-834001. [PAN: AAVPJ1437H] vs. ACIT, Circle-3, Ranchi……........…..….…..….........……........……...…..…..Respondent Appearances by: Shri Devesh Poddar, Advocate, appeared on behalf of the appellant. Shri Khubchand T. Pandya, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : June 19, 2025 Date of pronouncing the order : June 24, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against an order dated 10.10.2024 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
Brief facts of the case are that in the present case legal heir of Late Shree Niwas Joshi for the assessment year 2001-02 return was filed on 31.03.2002 by declaring total income of Rs.12,12,480/- which was processed u/s 143(1) of the Act. Subsequently, notice u/s 143(2) of the Act was issued to the assessee. Thereafter, the assessment was completed u/s 143(3) of the Act determining total income of Rs.31,39,384/-on 31.03.2004 by making an addition of Rs.19,26,904/-.
2.1 Aggrieved by the above order, the assessee preferred appeal before the ld. CIT(A) where the ld. CIT(A) allowed the appeal of the assessee.
Late Shreeniwas Joshi 2.2 Dissatisfied with the said order, the department went in appeal before the Tribunal where the Tribunal dismissed the departmental appeal. Thereafter, the Assessing Officer passed an order u/s 147/144 of the Act by assessing total income of the assessee at Rs.17,83,004/- on 30.12.2008 by making an addition of Rs.5,66,504/- on the issue of expenditure claimed in respect of godown expenditure. Against this order, the Tribunal vide order dated 15.09.2017 has directed the Assessing Officer to provide an adequate opportunity of hearing to the assessee and in consequent to that further notice u/s 142(1) was issued to the assessee calling for relevant details regarding rental income received from godown. However, there was no compliance made on behalf of the assessee. In absence of relevant documents, the Assessing Officer assessed the total income of the assessee in following manner: Assessed income : Rs.12,20,527/- Add: Expenditure claimed at Dhanbad Branch : Rs.84,255/- Expenditure claimed at Jamshedpur Br. : Rs.4,82,249/- Total income : Rs.17,87,031/-
Dissatisfied with the above order, the assessee preferred an appeal before the ld. CIT(A) against the assessment order. However, the ld. CIT(A) dismissed the appeal of the assessee by simply upholding the order of the Assessing Officer.
Aggrieved by the said order, the assessee filed the present appeal before this Tribunal raising various grounds. However, the primary contention of the assessee is that when the original assessee namely Late Shree Niwas Joshi died, his wife Smt. Sita Devi Joshi was appointed as legal heir but she too passed away on 18.11.2018 and Shri Suresh Joshi, son of the deceased Late Shree Niwas Joshi informed the fact to the Assessing Officer by a letter stating that his mother was died and requested that he be treated as legal heir of Late Shree Niwas Joshi.
Late Shreeniwas Joshi Despite this fact on record, the assessment order was framed on 18.12.2018 in the name of deceased i.e. Late Shree Niwas Joshi, L/H Smt. Sita Devi Joshi. The contention of the ld. AR is that when the assessment order was passed in the name of persons who were died at the time of framing of the order and without furnishing fresh notice to the correct legal heir, the same order is illegal and the assessment order is liable to be set aside. He further stated that as per section 153(2) r.w.r. 4 of the I.T. Rules, the Assessing Officer must issue fresh notice of the assessment to the successor once the original assessee has died and legal heir also died and failing to do so vitiates the entire proceedings.
The ld. DR supported the decisions rendered by the authorities below.
We, after hearing of the ld. DR and perusing the materials available on record, find that the legal heir of original assessee Late Shree Niwas Joshi i.e. Smt. Sita Devi Joshi has died on 18.11.2018 and the assessee informed the fact to the Assessing Officer vide letter dated 27.11.2018 and the Assessing Officer is required to correct the name of legal heir as Suresh Joshi upon which fresh notice is to be issued but the Assessing Officer framed the assessment order on 18.12.2018 in the name of non- existent persons without issuing any fresh notice to the correct legal heir i.e. Suresh Joshi. This action of the Assessing Officer is devoid of principle of natural justice and statutory compliance and the defect cannot be cured in subsequent stage. Therefore, in the instant case, the assessment order dated 18.12.2018 is bad in law as it is passed against the persons who had both already died or pre-deceased and the assessment order was passed without issuing of notice to the proper legal heir, although information was available at the time of framing of assessment order. Considering the above facts, we find that the impugned order passed by the Assessing Officer is null and void and the same is hereby quashed. In terms of the above, the alleged addition made Late Shreeniwas Joshi in the case of the deceased assessee is liable to be set aside and the appeal filed by the Suresh Joshi on behalf of Late Shree Niwas Joshi is hereby allowed.
In the result, the appeal of the assessee is allowed.
Kolkata, the 24th June, 2025.