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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI RAJESH KUMAR
Date of Hearing – 11.04.2018 Date of Order – 13.04.2018
O R D E R PER SAKTIJIT DEY, J.M.
This is an appeal by the assessee against order dated 31st August 2016, passed by the learned Commissioner (Appeals)–51, Mumbai, for the assessment year 2011–12.
Besides the main grounds, the assessee has raised three new grounds as additional grounds which were not raised before the first appellate authority. At the outset, the learned Authorised Representative submitted that on the instructions of the assessee
2 Shri Pawan Kumar Dhelia L/H of Late Smt. Madhavi Dhelia grounds no.1 and 3 of additional grounds are not pressed. Hence, grounds no.1 and 3 are dismissed.
Ground no.2, of additional ground reads as under:–
“2.0 Assessing Officer On the facts and in the circumstances of the case and in law, the assessment order under section 143(3) is bad in law as the Assessing Officer did not issue the notice under section 159(2) to the legal representatives legal heirs of the deceased person.”
Both the parties were heard on the issue of admission of the aforesaid additional ground.
As could be seen, the issue raised in the aforesaid ground is a purely legal issue which can be decided on the basis of facts available on record and does not require investigation into fresh facts. Therefore, we are inclined to admit the aforesaid additional ground for adjudication.
Facts necessary for deciding the aforesaid ground, briefly, are the deceased assessee was an individual. She was engaged in the business of manufacturing of aluminum composite panels. Unfortunately, the assessee died on 11th August 2011. The return of income for the impugned assessment year was filed on behalf of the assessee on 30th September 2011 declaring total income of `
3 Shri Pawan Kumar Dhelia L/H of Late Smt. Madhavi Dhelia 11,99,640. Assessment in case of the assessee was completed under section 143(3) of the Act vide order dated 28th March 2014, by substituting her legal representative Shri Pawan Kumar Dhelia. While completing the assessment the Assessing Officer made a number of additions which resulted in determination of total income at ` 55,19,540. Being aggrieved of the assessment order so passed, an appeal was preferred on behalf of the assessee before the first appellate authority.
The learned Commissioner (Appeals) disposed off the appeal of the assessee by the impugned order dated 31st August 2016, allowing partial relief.
The learned Authorised Representative submitted, as per section 159(2) of the Act, the Assessing Officer was required to frame the assessment in the name of all legal representatives of the deceased assessee. He submitted, though, the deceased had more than one legal representative, the Assessing Officer has passed the assessment order in the name of only one legal representative which is not in compliance to the statutory provision. Further, the learned Authorised Representative submitted, the expression “Legal Representative” in section 159(2) of the Act has to be understood to be signifying plurality of legal representatives as per section 13(2) of the General
4 Shri Pawan Kumar Dhelia L/H of Late Smt. Madhavi Dhelia Clauses Act. He, therefore, submitted that the assessment may be restored back to the file of the Assessing Officer with a direction to complete assessment in the name of all legal representatives of the deceased assessee in terms of section 159(2) of the Act. In support of his contention, the learned Authorised Representative relied upon the following decisions:– i) CIT v/s Narian Dass, 249 ITR 148 (Del.); ii) Addl. ITO v/s Suseela Sadanandan, 57 ITR 168 (SC); iii) Ashok Kumar v/s ITO, 80 ITD 33; iv) G.S. Kamath v/s ITO, 114 taxman 160 (Mum.); & v) Late A.Y. Prabhakar (Indl.) v/s ACIT, 25 CCH 181.
The learned Departmental Representative fairly submitted that the issue may be restored back to the Assessing Officer for completing the assessment in respect of all legal representatives of the assessee.
We have considered rival submissions and perused materials on record. According to our understanding, the legal proposition which emerges from reading of the provisions contained under section 159(2) of the Act as well as the ratio laid down in the decisions cited before us is, the income of a deceased assessee relating to the relevant assessment year has to be assessed in the hands of all legal representatives. The learned Departmental Representative has also 5 Shri Pawan Kumar Dhelia L/H of Late Smt. Madhavi Dhelia agreed with the aforesaid legal position. Therefore, keeping in view the provisions contained under section 159(2) of the Act as well as the ratio laid down in the decision cited before us, we are inclined to set aside the impugned order of the learned Commissioner (Appeals) and restore the matter back to the Assessing Officer with a direction to frame the assessment for assessing the income of the deceased assessee for the impugned assessment year against all legal representatives of the assessee. The assessee is directed to furnish all the details relating to the name and address of the legal representatives of the assessee for enabling the Assessing Officer to proceed against them in terms of section 159(2) of the Act. It is made clear, the Assessing Officer must afford reasonable opportunity of being heard to all the parties before completing the assessment de novo. This ground is allowed for statistical purposes.
In view of our decision in ground no.2 above, the issues raised in other grounds i.e., grounds no.4 to 9 by the assessee in the present appeal are not required to be adjudicated at this stage. Hence, issues raised therein are restored back to Assessing Officer for considering afresh in course of the assessment proceedings.
6 Shri Pawan Kumar Dhelia L/H of Late Smt. Madhavi Dhelia
In the result, assessee’s appeal is partly allowed for statistical purposes. Order pronounced in the open Court on 13.04.2018