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Facts
The assessee filed a return for AY 2016-17, and the case was selected for scrutiny. A notice under section 143(2) was issued, after which the assessee expired. The assessment order was passed against the deceased assessee. The assessee's legal heir's appeal was dismissed by the CIT(A) for non-prosecution.
Held
The Tribunal held that proceedings under Section 159(2) of the Act can continue against legal representatives even after the death of the assessee, and the death does not abate the proceedings. The Tribunal also found no merit in the contention regarding the AO's jurisdiction.
Key Issues
Whether the assessment order passed in the name of a deceased assessee is void, and whether the transfer of jurisdiction among officers affects the validity of the assessment order.
Sections Cited
159(2) of the Income Tax Act, 1961, 143(3) of the Income Tax Act, 1961, 144 of the Income Tax Act, 1961, 127 of the Income Tax Act, 1961, 142(1) of the Income Tax Act, 1961, 68 of the Income Tax Act, 1961, 271(1)(c) of the Income Tax Act, 1961, 234B of the Income Tax Act, 1961, 234C of the Income Tax Act, 1961, 143(2) of the Income Tax Act, 1961, 124(3)(a) of the I.T. Act
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Income Tax Appellate Tribunal, BANGALORE “C” BENCH, BANGALORE
Gopaliyengar Madabushi The Income Tax Officer Muralidhar Ward - 7(2)(4) (Legal Rep: Dakshayani Muralidhar) BMTC Building, 80 Ft. Road No.733, 14th Main, 18th Cross vs. 6th Block, Koramangala Banashankari 2nd Stage Bengaluru 560095 Bengaluru 560070 PAN – ABTPM6528K (Appellant) (Respondent) Assessee by: Shri Hemant Pai, CA Revenue by: Shri V. Parithivel, JCIT-DR Date of hearing: 11.06.2024 Date of pronouncement: 08.08.2024 O R D E R Per: Keshav Dubey, J.M. This appeal at the instance of the assessee is directed against the CIT(A) / NFAC’s Order dated 17.07.2023 vide DIN & Order No. ITBA/NFAC/S/250/2003-24/1054405135(1) passed under Section 250 of the Income Tax Act, 1961 (the Act) for the Assessment Year (AY) 2016-17.
The assessee has raised the following grounds of appeal: - “The Legal Heir of the Appellant humbly submits the following grounds of appeal:
1. Assessment order bad in law: 1.1 The order dated December 27, 2018 passed by the Income Tax Officer, Ward - 7(2)(4), Bengaluru ('the Learned Assessing Officer' or 'the AO' or 'the Learned AO") under section 143(3) of the Income Tax Act, 1961 ('the Act') is Gopaliyengar Madabushi Muralidhar erroneous, contrary to law and facts of the case of the Appellant and is liable to be quashed. 1.2 The Learned AO has passed the assessment order in violation to principles of natural justice and therefore, required to be set aside in entirety. 13 The Learned AO has erred in concluding the assessment under section 143(3) of the Act against a deceased assessee and also in issuing the assessment order in the name of a deceased person. The order is bad in law, more so after intimating the death of the Appellant to the Learned AO before issuance of the order. 1.4 The Learned AO has erred in law in not issuing a show cause notice before concluding the assessment on best judgement basis. The Learned AO has failed to appreciate that issuance of show cause notice is a necessary ingredient before passing a best judgement assessment order. Therefore, the assessment order passed without following the principles laid down in section 144 and section 143(3) of the Act is bad in law and is liable to be set aside in entirety. 1.5 The Commissioner of Income Tax (Appeals) ['the Learned CIT(A)'] has erred in disposing the appeal by confirming the additions made in the assessment order of the Learned AO without considering the documents and evidence available on record and therefore, the order of the Learned CIT(A) dated July 17, 2023 is bad in law and is liable to be set aside. 1.6 The Learned CIT(A) has erred in issuing notices and communications addressed to the deceased assessee even after taking cognizance of the death of the Appellant.
2. Addition towards unexplained investment: 2.1 The Learned. AO has erred in adding a sum of Rs. 97,48,763 under section 68 of the Act as unexplained investment. 2.2 The Learned AO has failed to appreciate that the provisions of section 68 of the Act are not applicable to the facts of the case. 2.3 On proper appreciation of facts and law applicable, it will be clear that there is no unexplained investment and therefore the addition is liable to be deleted. 2.4 The Learned AO has failed to appreciate that no addition can be made on the basis of ITS information. The addition made merely on the basis of ITS information being bad in law and on fact is required to be deleted.
3. Denial of carry forward of losses: 3.1. The Learned AO has erred in denying the carry forward of speculative losses to the tune of Rs. 29,34,388 without verification of the facts of the claim. 3.2. The denial of losses without any verification/ examination is erroneous and carry forward of losses is required to be granted.
4. Initiation of penalty proceedings 4.1. The Learned AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act.
Gopaliyengar Madabushi Muralidhar 5. Other grounds: 5.1. The Learned AO has erred in law and on facts in levying interest under section 234B and 234C of the Act. The interest so levied, being erroneous, is required to be deleted. 5.2. The Appellant craves leave to add, amend, alter or delete any of the above grounds at any time before or during the hearing of the appeal.”
The brief facts of the case are that the assessee filed his return of income for AY 2016-17 on 14.10.2016 declaring taxable income of Rs.14,24,100/-. Thereafter the case was selected for scrutiny under CASS with the category limited scrutiny. The issue for e-verification was “whether the investment and income related to securities (Derivative) transactions are duly disclosed”. Accordingly notice u/s. 143(2) of the Act dated 04.07.2017 was issued and served upon the assessee by the Asst. Commissioner of I. Tax, Central Circle 1(4), Bengaluru (AO). It is submitted that, after being served with the notice u/s. 143(2) of the Act, the assessee expired on 09.11.2017. (Death Certificate enclosed on page 3 of the paper book marked as Annexure- B). Subsequently the case was transferred to the Assessing Officer (AO), Ward 7(2)(4), Bengaluru u/s. 127 of the Act by the Pr. Commissioner of Income Tax, Central, Bengaluru (Pr. CIT) by way of Corrigendum dated 05.11.2018 in partial modification to notification F. No. 24/Decentralisation/Pr.CIT(C) - 4/2018-19 dated 31.05.2018. The Asst. Commissioner of I. Tax, Central Circle 1(4), Bengaluru continued to issue notices u/s. 142(1) of the Act dated 16.07.2018, 20.07.2018 as well as 01.08.2018 in the name of the assessee who only expired on 09.11.2017 i.e. way after the issuance of Notice U/s 143(2) as well as three Nos. Of Notices as above issued U/s 142(1). Thereafter as the Assessee’s legal heir failed to intimate about the death of the Assessee to the Revenue, the final notice u/s. 142 of the Act dated 13.12.2018 i.e. after the death of the Assessee on 09/11/2017 was issued in the name of the Assessee only as claimed by the learned D.R. whereas the legal heir, Smt. Dakshayani Muralidhar, wife of late Shri G.M. Muralidhar, by way of an affidavit before us dated 10.06,2019 stated that in early December, 2018 she visited the Gopaliyengar Madabushi Muralidhar Income Tax Officer, Ward 7(2)(4), Bengaluru and informed him about the demise of her husband and conveyed her inability to collate the documents/information sought in the notices. Further, in the very same affidavit she stated that notice u/s. 142(1) of the Act dated 13.12.2018 was issued by the Income Tax Officer, Ward-7(2)(4), Bangalore in which ‘legal heir’ and “To legal heirs” was hand written by the ITO, Ward 7(2)(4), Bengaluru in the same ink which was used to affix his signature on the said notice. Further, during the course of assessment proceedings the AO was of the opinion that as the assessee filed no details by ignoring all the notices and accordingly he proceeded to complete the assessment basing on the material available on record u/s. 144 of the Act. The AO during the course of assessment proceedings found that the transaction value of code 1 i.e. purchase in securities during the period relevant to AY 2016-17 is at Rs.97,48,763/- and the transaction value in Code 2 is at Rs.54,01,977/-. As the assessee in spite of many notices and reminders has not produced any details regarding the sources for the investment of Rs.97,48,763/-, the AO constrained to treat the above investment of Rs.97,48,763/- as unexplained investment for AY 2016-17 u/s. 68 of the Act. The AO also in the absence of any details in support of the claim of carry forward of loss under speculative business amounting to Rs.29,34,388/- also denied the same and concluded the assessment accordingly. Aggrieved by the assessment completed u/s. 143(3) of the Act dated 27.12.2018 the legal heir, Smt. Dakshayani Muralidahr, filed the appeal before the ld. CIT(A).
The ld. CIT(A) dismissed the appeal filed by the legal heir on the ground of appellant’s consistent failure to avail opportunities offered to provide submissions/ justification supporting the grounds of appeal and accordingly held that as the appellant is not keen to pursue the pending appeal with comprehensive submissions / supporting evidences as needed as per the law and has opted for non-responsive behaviour from time to time which Gopaliyengar Madabushi Muralidhar clearly makes it a case of non-prosecution by the appellant. Accordingly the assessee’s appeal and the grounds appeals were dismissed as non-maintainable for want of prosecution as well as dismissed as not maintainable on merits also. Aggrieved by the order of the ld. CIT(A) the legal heir filed the present appeal before the Tribunal.
The legal heir of the assessee filed a paper book comprising 25 pages certified by the AR of the Assessee enclosing therein : - i. Notice u/s. 143(2) of the Act dated 04.07.2017 ii. Death Certificate of the Assessee iii. Decentralisation order dated 31.05.2018 iv. Notice u/s. 142(1) of the Act 16.07.2018 v. Notice u/s. 142(1) of the Act 20.07.2018 vi. Notice u/s. 142(1) of the Act 01.08.2018 vii. Corrigendum to the Decentralisation order dated 05.11.2018 viii. Notice u/s. 142(1) of the Act dated 13.12.2018 The assessee has also filed the list of Dates & Synopsis as well as case laws relied upon by the learned A.R. of the assessee.
Before us the learned A.R. vehemently submitted that the assessee, Shri G.M. Muralidhar passed away on 09.11.2017. However, the impugned order u/s 143(3) of the Act dated 27/12/2018 was passed in the name of the deceased assessee. He further submitted that the AO was very well aware of the demise of the assessee well before the impugned order was passed on 27.12.2018. In spite of that the AO proceeded to pass the impugned assessment order in the name of the deceased assessee and therefore the assessment order passed in the name of the deceased assessee is non est and bad in law. Without prejudice it is also submitted that there exist no statutory obligation on the legal heirs of the deceased assessee to intimate the factum of death of the assessee to the department and prayed that as it is an incurable defect the impugned assessment order is not valid and bad in law. He heavily relied on the decision
Gopaliyengar Madabushi Muralidhar of the Hon’ble Delhi High Court in the case of Savita Kapila reported in [2020] 118 taxmann.com 46 (Delhi) as well as Bombay High Court in the case of Devendra reported in [2023] 153 taxmann.com 520 (Bombay). Further the learned A.R. of the assessee submitted that the Income Tax Officer, Ward 7(2)(4) did not have the jurisdiction to pass the impugned assessment order as the notice u/s. 143(2) of the Act dated 04.07.2017 was issued by the ACIT, Central Circle – 1(4), Bengaluru and was subsequently decentralised and transferred to the Income Tax Officer, Ward 4(3)(3), Bengaluru vide transfer order dated 31.05.2018 passed u/s. 127 of the Act. It is also submitted that the ACIT, central Circle – 1(4) continued to issue notices u/s. 142(1) of the Act dated 16.07.2018, 20.07.2018 and 01.08.2018 even after the said transfer order was passed by the Pr. CIT. It is the submission of the learned A.R. that the transfer of jurisdiction vide order passed u/s. 127 of the Act is absolute and irrevocable and in pursuant to the transfer order dated 31.05.2018 the jurisdiction of the assessee was transferred to the ITO, Ward- 4(3)(3), Bengaluru and accordingly the impugned order passed by the AO, Ward 7(2)(4), Bengaluru is without jurisdiction and incurable as well as bad in law. Lastly, the learned A.R. of the assessee, on merits of the case, submitted that the AO has erred in adding a sum of Rs. 97,48,763/- u/s. 68 of the Act as unexplained investment on the basis of ITS information which is not at all applicable to the facts of the case and with regard to the denial of carry forward of losses, the learned A.R. vehemently submitted that the denial of losses without verification/ examination to the tune of Rs. 29,34,388/- is erroneous and bad in law.
7. The learned D.R., on the other hand, submitted that during the course of scrutiny proceedings u/s. 143(3) of the Act the final notice u/s. 142(1) of the Act dated 13.12.2018 was issued only to the assessee in the name of Shri G.M. Muralidhar and not in the name of the legal representative as alleged by the Ld. AR of the Assessee. Further, the learned D.R. fervently submitted that in Gopaliyengar Madabushi Muralidhar the notice u/s. 142(1) dated 13.12.2018 furnished by the assessee on page 24 of the paper book dated 29.01.2024 there is a tampering in para (b) of the said notice. Further the notice u/s. 142(1) dated 13.12.2018 issued by the department addressing the assessee only and not the legal heir. It is also submitted by the learned D.R. that neither the wife of the assessee, Smt. Dakshayani Muralidhar nor his authorised representative has replied to any of the notices before the AO and brought on record the fact of the demise of the assessee on 09.11.2017 during the course of the entire assessment proceedings which was completed vide order u/s. 143(3) of the Act dated 27.12.2018 in the name of Shri G.M. Muralidhar. Further the ld. DR submitted that the notice u/s. 143(2) dated 04.07.2017 was issued initiating the scrutiny proceedings in the case of the assessee for AY 2016-17 when the assessee was alive and the assessee also responded vide reply dated 05.08.2017 stating that he will submit the statements and accounts with TATA Securities and Kotak Securities. The learned D.R. further submitted that as the demise of the assessee was not brought to the notice of the department and the relevant details were not uploaded on the I.T. portal the question of issuing notice to the legal heir does not arise. Lastly ld. DR submitted that from perusal of section 159(2) of the Act, it is evident that the aforesaid provision expressly provides that the death of the party is of no consequence and the proceeding under the act can proceed against the legal representatives of the assessee and the proceedings initiated against the deceased assessee shall be deemed to be the proceeding initiated against legal representatives of the assessee from the inception which could be continued from the stage of his death.
With regard to the second issue with respect to the AO acquiring jurisdiction to pass the assessment order, the learned D.R. submitted the following chronological sequences of events for the consideration: -
Gopaliyengar Madabushi Muralidhar S.No. Issuance Date Issuance Authority/ Person Particulars 1. 04/07/2017 Assistant Commissioner of Notice u/s 143(2) Income Tax Central Circle 1 (4) BLR 2. 05/08/2017 Reply by Assessee Reply to above notice seeking adjournment 3. 31/05/2018 Principal Commissioner of Notification No. 24 u/s. Income Tax (Central), BLR 127 – Transferring case to the ITO ward 4(3)(3), BLR 4. 05./11/2018 Principal Commissioner of Corrigendum order u/s. 127 to above notification – Income Tax (Central), BLR Transferring the case to ITO Ward 7(2)(4), BLR 5. 01/12/2018 ITO Ward 7(2)(4), BLR Notice u/s. 142(1) 6. 13/12/2018 ITO Ward 7(2)(4), BLR Notice u/s. 142(1) 7. 27/12/2018 ITO Ward 7(2)(4), BLR Notice u/s. 143(3)
Accordingly, he submitted that while initiating the scrutiny proceedings for AY 2016-17 the ACIT, Central Circle – 1(4) Bengaluru had jurisdiction over the case. Subsequently the Pr. CIT, Central, Bengaluru issued notification F. No. 24/Decentralisation/Pr.CIT(C) -4/2018-19 dated 31.05.2018 transferring the case to the ITO, Ward 4(3)(3), Bengaluru. But the Pr. CIT, Central, Bengaluru latter issued a corrigendum order dated 05.11.2018 with respect to the above notification that three cases were inadvertently transferred to ITO, Ward-4(3)(3), Bengaluru instead of Ward-7(2)(4), Bengaluru and thereby transferring the cases to ITO, Ward-7(2)(4), Bengaluru. Subsequently all the notices were issued by ITO, Ward 7(2)(4), Bengaluru and he passed the order u/s. 143(3) of the Act dated 27.12.2018 and accordingly submitted that there is a valid jurisdiction.
With regard to the merit of the case the ld. DR submitted that as neither the Assessee himself nor his legal heirs during the course of the proceedings submitted any documents/record before the Authorities below therefore the ld. CIT(A) rightly dismissed the appeal filed by the legal heir on the ground of Gopaliyengar Madabushi Muralidhar appellant’s consistent failure to avail opportunities offered to provide submissions/ justification supporting the grounds of appeal.
We have heard the rival contentions and perused the material on record. It is an undisputed fact that the notice u/s. 143(2) of the Act dated 14.07.2017 as well as three notices U/s 142(1) dated 16/07/2018, 20/07/2018 & 01/08/2018 were issued and served upon the assessee by the ACIT, Central Circle-1(4), Bengaluru when the assessee was alive. It is also undisputed fact that the assessee expired only on 09.11.2017 (page 3 of the paper book), i.e. only after issuing notice u/s. 143(2) of the Act as well as 3 nos. Of notices issued u/s 142(1) of the Act. We also cannot brush aside the fact that in response to notice us 143(3) of the Act dated 04.11.2017 the assessee has also filed reply to the said notice on 05.08.2017 stating that the assessee will submit the statement of account of TATA Securities and Kotak Securities as the assessee has misplaced the statement of accounts and requested for two weeks time to file the details. It is also undisputed fact that initially the Pr. CIT, Central Circle, Bengaluru vide notification No. 24/Decentralisation/Pr. CIT(C)-4/2018-19 Dated 31/05/2018 in exercise of the powers conferred under sub-section (2) of s. 127 of the Act, had transfer the case of the Assessee from ACIT, Central Circle-1(4) to I.T.O, Ward-4(3)(3), Bengaluru. Accordingly the case of the assessee had been transferred to ITO, Ward- 4(3)(3), Bengaluru on 01.09.2018 by ACIT, Central Circle-1(4), Bengaluru after issue of notice u/s. 143(2) of the Act. Thereafter the AO, Ward 4(3)(3), Bengaluru on 20.09.2018 transferred the case to the ITO, Ward-7(2)(4), Bengaluru as the territorial jurisdiction over the case vested with ITO, Ward- 7(2)(4), Bengaluru. The ITO, Ward 7(2)((4), Bengaluru returned the assessment record stating that the assessee is notified to ITO, Ward 4(3)(3), Bengaluru by the proceedings of the Pr. CIT, Central Circle, Bengaluru vide notification in F. No. 24/Decentralisation/Pr.CIT(C) -4/2018-19 dated 31.05. 2018 requesting to transfer the case along with notification order u/s. 127
Gopaliyengar Madabushi Muralidhar assigning the jurisdiction to ITO, Ward 7(2)(4), Bengaluru. We found that the original notification passed on 31.05.2018 contained 100 number of cases to be notified to the jurisdictional AO concerned in which the inadvertent human errors had occurred by oversight in 3 nos. of cases out of 100 cases notified. The Pr. CIT (Central), in order to rectify the same, has passed a corrigendum on 05.11.2018 vide notification in F. No. Decentralisation/Pr.CIT(C) -3/2018- 19 dated 05.11.2018 mentioning that the cases were transferred to ITO, Ward- 4(3)(3), Bengaluru instead of ITO, Ward-7(2)(4), Bengaluru. A copy of the report of the AO dated 07.02.2024 with regard to the issues raised also confirmed the same. We find no infringement in the corrigendum dated 05.11.2018 passed by the Pr. CIT (Central), Bengaluru as the cases were inadvertently transferred to ITO, Ward-4(3)(3), Bengaluru instead of ITO, Ward-7(2)(4), Bengaluru having the jurisdiction over the case vide notification dated 31.05.2018. It is also evident from the assessment order that during the course of assessment proceedings, jurisdiction was transferred from one officer to other officer and the subsequent officer has completed the assessment. Under these circumstances, we find no merit in the contention of the assessee that ITO, ward-7(2)(4) did not have the jurisdiction to pass the impugned assessment order, Accordingly this ground of the appeal raised by the assessee is dismissed. Further, We also place reliance on the decision of the Hon'ble Supreme Court in the case of DCIT (Exemption) v. Kalinga Institute of Industrial Technology [2023] 454 ITR 582 (SC), that Section 124(3)(a) of the I.T. Act precludes the assessee from questioning the jurisdiction of the AO, if he does not do so within 30 days of the receipt of notice u/s. 142(1) of the Act. In view thereof the technical ground raised by the assessee is dismissed.
Now coming to the ground that the impugned assessment order passed in the name of the deceased person is non est, we are of the opinion that it is not a case where the proceedings was initiated against the assessee who had Gopaliyengar Madabushi Muralidhar already expired. In fact in the present case notices u/s. 143(2) of the Act as well as 3 nos. of Notices U/s 142(1) of the Act were issued and served upon the assessee himself and the assessee had also replied in response to the notice u/s 143(2) on 05.08.2017. In the instant case, admittedly after making the reply u/s. 143(2) but before an order was passed by the AO, the assessee expired. Therefore, in our view by virtue of s. 159(2) of the Act the proceedings could not be said to be abated and can be continued against the legal representatives. The case laws relied upon by the Assessee are distinguishable on the facts & circumstances of the case. In the case of Savita Kapila reported in [2020] 118 taxmann.com 46 (Delhi) as well as in the case of Devendra reported in [2023] 153 taxmann.com 520 (Bombay) the notice u/s 148 was issued after the death of the assessee and in such a case it could not have been validly served upon the Assessee whereas in the present case notices u/s. 143(2) of the Act as well as 3 nos. of Notices U/s 142(1) of the Act were issued and served upon the assessee himself and the assessee had also replied in response to the notice u/s 143(2) on 05.08.2017. We under the similar facts & circumstances respectfully relying in the case of CIT v. Shri 1. Mhabaleshwarapa in of 2013 of the Hon'ble Jurisdictional High Court in which it is held as under: - “6. We have considered the submissions made by learned counsel for the parties and have perused the record. The solitary issue, which arises for consideration in this appeal is whether an order passed by the Assessing Officer, after the death of the assessee who dies after conclusion of the arguments and before an order is passed by the Assessing Officer is ab initio void. Before proceeding further, it is apposite to take note of Section 159 of the Act, which reads as under: 159. (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),- (a) any proceeding taken gainst the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the Gopaliyengar Madabushi Muralidhar legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets47 of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section 161, section 162, and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.
Thus, from perusal of Section 159(2) of the Act, it is evident that the aforesaid provision expressly provides that death of the party is of no consequence and proceeding under the Act can proceed against legal representatives of the assessee and proceedings initiated against the deceased assessee shall be deemed to be the proceeding initiated against legal representatives of the assessee from the inception which could be continued from the stage of his death. The concept of abatement of the proceeding is not contemplated under the provisions of the Act. Section 159(2)(a)(b) and Section 159(3) of the Act create a legal fiction. It is well settled rule of statutory interpretation that in interpreting a provision creating a legal fiction, the court is to ascertain for what purpose the fiction is created, and after ascertaining this, the Court is to assume all those facts and consequences which are incidental or inevitable corollaries to the giving effect to the fiction. (State of Trav-Co. v. Shanmugha Vilas Cashewnut Factory, Quilon, AIR 1953 SC 244, East End Dwelling Co. Ltd. V. Finsbury Borough Council, (1951) 2 All ER 587 and Corporation Bank v. Saraswati Abharansala (2009) 1 SCC 540) (See Principles of Statutory Interpretation Justice G.P.Sinch 14th edition page 417).
8. A division bench of this court in Smt.V.Rukmini supra while dealing with the question whether an appeal under Section 260A of the Act abates on account of death of the assessee during the pendency of the appeal, while dealing with scope and ambit of Section 159 of the Act has held that the concept of abatement is excluded, from the provisions of the Act which is evident from Section 159(2) of the Act. In the instant case, admittedly, after conclusion of the submissions, before an order was passed by the Assessing Officer, the assessee expired. Therefore, by virtue of Section 159(2) of the Act, the proceeding could not have held to have been abated and could have been continued against the legal representatives. Section 159(2)(a) of the Act creates a legal fiction therefore, full effect has to be given to the same. It is not a case where the proceedings were initiated against the assessee who had already expired. Therefore, the proceeding could have been Gopaliyengar Madabushi Muralidhar held to be ab initio void. For the aforementioned reasons, the substantial questions of law are answered in favour of the revenue and against the assessee.”
Thus, respectfully following the above decision of the Hon'ble Jurisdictional High Court we are of the opinion that the matter in dispute is to be remanded to the AO to issue notice to the legal representatives of the deceased assessee and thereafter to pass a fresh order of assessment after giving reasonable opportunity of being heard. We also notice that the authorities below have also not adjudicated the case on merits and, therefore, we direct the assessee to produce all the relevant documents/ records/Statement before the AO as required by him. The legal representatives are also directed to cooperate with the proceedings before the Revenue authorities for proper adjudication of the case. It is ordered accordingly.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 8th August, 2024.