ITO, ROHTAK vs. SH. RAM KUMAR, HARYANA

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.”

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.

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:-

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.