ITO, ROHTAK vs. SH. RAM KUMAR, HARYANA
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that a notice issued in the name of a deceased person is invalid. Since the notice itself was bad in law, the subsequent reassessment proceedings could not survive.
What were the facts?
The Assessing Officer (AO) issued a notice under Section 148 to the assessee, who had already passed away. The notice was for alleged income from undisclosed sources. The CIT(A) deleted the addition, holding the notice void ab initio.
What were the issues?
The primary issue was the validity of a notice issued under Section 148 to a deceased assessee and its impact on reassessment proceedings.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(3)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Rakesh Kumar11 citing313 ITR 305 · 2009 · HC · Read judgment
- Shaikh Abdul Kadar v. ITO7 citing34 ITR 451 · 1958 · HC
- Rupa Shyamsundar Dhumatkar v. ACIT (W.P.No. 404 of4 citing45 SOT 113 · 2011 · ITAT
Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-I’ NEW DELHI
Before: SMT DIVA SINGH
The present appeal has been filed by the Revenue assailing the correctness of the order dated 15.01.2016 of CIT(A), Rohtak pertaining to 2006–07 assessment year on the following grounds:-
1. “The CIT(A) has erred in Law and facts in deleting the addition of Rs. 35,22,886/- made by the AO on account of income from undisclosed sources by considering notice u/s 148 void abinitio but the notice u/s 148 was duly served upon Smt. Sunita the daughter in law of assessee who failed to inform about death of the assessee. The notice was served upon 28.03.2011 there was still time left if it was conveyed to the AO about the demise of assessee the notice can again be served upon the legal heir at that time. Also the fact of demise of assessee came to the knowledge of AO only after the Inspector reported it on 12.03.2014.
2. That the appellant craves for permission to add, delete or amend the ground of appeal before or at the time of hearing of appeal.”
No one was present on behalf of the assessee at the time of hearing. Despite the fact that notice for the specific date of hearing had been issued to the assessee on 10.10.2016 at the address indicated in column No. 11 in the memo of appeal filed by the Revenue. However, considering the material available on record, it is considered appropriate to proceed with the present appeal ex-parte qua the assessee-respondent on merit after hearing the Ld. Sr.DR.
The relevant facts of the case are that as a result of notice under section 148 issued to the assessee on 28/30.03.2013. The assessee was required to explain the deposits made in Haryana Gramin Bank, B.O.Parnala. Since no compliance was made on behalf of the I.T.A .No.-1632/Del/2016 ITO vs Ram Kumar
Page 2 of 3 assessee, addition of the deposits made in the said bank account were added to the income of the assessee by an order under section 144/147 of the Act.
Aggrieved by this, the assessee came in appeal before the CIT(A) pleading that Sri Ram Phal had expired on 07.12.2012. Thus, the aforesaid notice issued in the name of a dead person could not be served upon him. Relying on ITO vs Sikandar Lal Jain 45 SOT 113 (Agra)(TM)(Trib.) it was submitted that notice issued in the name of a dead person is not a valid notice in the eyes of law. The following extract of the order from the decision was relied upon:-
P.K.Bansal, Accountant Member 1. There being difference of opinion between both the Members constituting the Bench, the matter was referred by Hon’ble President under section 255(4) of the Income Tax Act to the Third Member for adjudication on two questions. The learned Judicial Member had confirmed the order of CIT(A) quashing the reassessment proceedings both on the basis of invalidity of notice having been issued on the dead person and the service of notice on legal heir of assessee beyond the period of limitation, whereas the learned Accountant Member set aside the order of Ld.CIT(A holding the reassessment proceedings as valid having been initiated after issuing valid notice and its proper service. The Third Member vide his opnion dated 08.12.2010 concurred with the decision reached by learned Judicial Member on invalidity of notice having been issued on the dead person thereby rendering the reassessment proceedings as vlid and agreed with the learned Accountant Member on the validity of service of notice holding that the notice could be validly served beyond the time-limit prescribed under section 149 of the Income Tax Act.” (emphasis provided)
4.1. Reliance was also placed upon the decision in Deccan Wine and General Stores vs CIT 106 ITR 111 (AP) on the following proposition:-
“…….the issuance of a valid notice is a foundation for the validity of the re- assessment. There is a clear cut distinction between the precedent and procedure. The defect in the procedure will not normally amount to lack of jurisdiction. The notice prescribed u/s 148 for the purpose of initiation of re-assessment proceedings is not a mere procedural requirement, but is a condition precedent to the validity of re-assessment. If no notice is issued or if the notice issued is shown to be invalid, the proceedings initiated by the Assessing Officer would be invalid and void. The assessment framed on the basis of such invalid proceedings will be invalid.”
4.2. Apart from that reliance is also placed upon the following decisions:-
CIT vs Rakesh Kumar, Mukesh Kumar L/H of Late Mohar Singh 313 ITR 305 (P&H); 2. Mrs. Veena Vij vs ITO in (ITAT/Delhi); 3. Shaikh Abdul Kadar vs ITO reported at 34 ITR 451 (MP.); 4. ITO vs Ganga Prasad Jaiswal reported at 39 ITD 444 (All.); 5. Smt. Kesar Devi vs CIT reported at 321 ITR 344 (Raj.)
I.T.A .No.-1632/Del/2016 ITO vs Ram Kumar
Page 3 of 3 4.3. Considering the above legal and factual position, the assessment order was held to be void ab initio. 5. Aggrieved by this, the Revenue is in appeal before the Tribunal. 5.1. The Ld. Sr.DR relies upon the assessment order. However, the factual finding of issuance of notice 28-30/03.2013 in the name of the dead assessee who had already expired on 07.12.2012 and lack of notice to the legal heirs of the assessee at all was not disputed.
I have heard the submissions of the Ld.Sr.DR and perused the material available on record as well as the legal precedent cited before the First Appellate Authority. It is a matter of record that there is no dispute on the fact that notice under section 148 was issued in favour of Sri Ram Phal on 28/30.03.2013. The death certificate evidencing that Sri Ram Phal expired on 07.12.2012 is an undisputed fact on record. It is also seen that no notice in favour of the legal heirs of the assessee was issued by the AO. In the aforementioned peculiar facts and circumstances, considering the legal precedent cited, I find no infirmity in the impugned order. The law is well-settled notice issued in the name of a dead person cannot be held to be a valid and once the notice itself is bad in law, the subsequent proceedings cannot survive.
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