SMT. SOWMYA B. SUVARNA,BANGALORE vs. ITO, BANGALORE

The submissions of ld. AR as well as ld. DR are heard on the issue of condonation of delay. After going through the affidavit filed by the assessee we find that the assessee has explained the delay in filing the appeal that the assessee was not served with the impugned order of CIT(A) and came to know only when the assessee received a notice dated 27.01.2016 and 15.02.2016 which were addressed to the legal heir of the assessee for demand of tax payable with interest. Thus the assessee has stated that prior to the said notice of demand the assessee was not even aware of the impugned order. Thus, the ld. AR of the assessee has submitted that the delay in filing the appeal is neither intentional nor deliberate but due to the unavoidable reasons that the assessee was not served with the impugned order of CIT(A). On the other hand, the ld. DR has opposed the condonation of delay and submitted that when the father of the said assessee has already filed the appeal against the impugned order within the period of limitation then the assessee who claim to have received the notice at the residence of the father cannot take a plea that the assessee was not aware about the impugned order of the CIT(A).

Having considered the rival submissions as well as relevant material on record we find that the assessee has explained the delay that the impugned order of CIT(A) was not served upon the assessee Smt. Soumya B Suvarna and therefore only when the assessee came to know about the demand notice the assessee has taken the steps to take the copy of the impugned order and filed the present appeal. The revenue has not controverted this fact that the impugned order was served only to the father of the assessee who is also one of the legal heir of Late Smt. Sumana Bhojraj. Accordingly, we find that the assessee being a legal heir of late Smt. Sumana Bhojraj is entitled for the service of the impugned order as well as has the right to challenge the impugned order if aggrieved of the same. Therefore when this fact has not been disputed that the impugned order has not been specifically served upon the assessee Smt. Soumya B Suvarna we are satisfied that the assessee has sufficient cause for not filing the appeal within the period of limitation. Accordingly, we condone the delay of 360 days in filing the present appeal.

These two appeals by the legal heirs of late Smt. Sumana Bhojraj have been filed against the same impugned order of the CIT(A). A common ground has been raised in this appeal regarding the validity of assessment order passed by the AO on the basis of the notice issued u/s. 148 on a dead person. Further, the assessment order has been challenged on the ground that the AO has not brought all the legal heirs on record and passed the assessment order against the dead person.

The ld. AR of the assessee has submitted that the notice u/s. 148 was issued by the AO against late Smt. Sumana Bhojraj. Since the assessee was already expired and one of the legal heir Shri U.A. Bhojraj husband of deceased assessee appeared before the AO and appraised about the death of late Smt. Sumana Bhojraj. The AO has not issued any fresh notice u/s. 148 to the legal heirs of the representatives of the deceased assessee and therefore the assessment framed by the AO in pursuant to the notice u/s. 148 issued to a dead person is not sustainable in law. He has relied upon the decision of Hon’ble Madras High Court in case of CIT Vs. M. Hemanathan (384 ITR 177) as well as decision of Hon’ble Delhi High Court in case of Vipin Walia Vs. ITO 238 TAXMAN 1/67 taxmann.com 56 and submitted that the Hon’ble High Court have held that when the assessee was already dead prior to the issue of notice u/s. 148 then the department was required to proceed by issuing a notice to the legal representative of the deceased. In the absence of the notice to the legal representative the assessee would be an illegality and not a mere irregularity. Thus the ld. AR has submitted that the assessment framed by the AO when issuing a notice u/s. 148 to the legal heirs is not sustainable in law.

On the other hand, the ld. DR has submitted that in response to the notice issued u/s. 148 dated 28.07.2009, one of the legal heir of the deceased assessee appeared before the AO. He has further submitted that Shri U.A. Bhojraj husband and legal heir of the deceased assessee vide letter dated 27.11.2009 informed the AO about the demise of Mrs. Sumana Bhojraj on 20.08.2008. Shri U.A. Bhojraj filed return of income on 31.12.2009 with a covering letter stating that the return was being filed with reference to the notice u/s. 148 dated 28.07.2009. Thus, the ld. DR has submitted that when the legal heir of the deceased assessee accepted the notice u/s. 148 and filed the return of income then the AO was having no occasion to issue fresh notice u/s. 148. The ld. DR has further contented that one of the legal heirs have appeared before the AO and not raised any objection about the validity of notice issued u/s. 148 as well as the proceedings of the reassessment then the assessment was made on the assessee as legal heirs cannot be held as invalid. He has further submitted that the AO also issued notice u/s. 143(2) to the legal heirs and in response to the legal representative of the deceased assessee participated in the assessment proceedings. The ld. DR has relied upon the order of the CIT(A) and submitted that the CIT(A) has given its finding on this issue by following the various decisions of Hon’ble High Court. He has relied upon the following decisions. i) Smt Kaushalyabai Vs CIT (1999) 238 ITR 1009(MP) ii) CIT Vs Vision Inc (2012) 73 DTR (Delhi HC) 201/208 Taxman 153 iii) Om sons International Vs CIT, (2011) 211 Taxman 195 (P & H Court) 6. We have considered the rival submissions as well as relevant material on record. There is no dispute that the AO issued a notice u/s. 148 on 28.07.2009 in the name of Smt. Sumana Bhojraj to tax the capital gain arising from transfer of land under JDA. In response to the said notice the husband of Smt. Sumana Bhojraj has appeared before the AO and informed that she had already died on 20.08.2008. However, Shri U.A. Bhojraj filed a return of income stating that these were being filed in response to the notice u/s. 148 therefore so far as the legal representative Shri U.A. Bhojraj is concerned, he has accepted the notice u/s. 148 and also filed the return of income. Further, it was incumbent upon the AO to bring all the legal representative of the deceased assessee on record and then frame the assessment. In this case since the return of income was filed Shri U.A. Bhojraj in response to the notice u/s. 148, then the stage of issuing the fresh notice u/s. 148 was over.