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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
O R D E R
PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the Legal Heir of Late Shri Phool singh , Assessee , against the order of the ld CIT(A)-2, Gurgaon dated 06.01.2016 for Assessment Year 2006-07 raising several grounds of appeal
2. The facts emerges from the assessment order is that one Shri Phool singh has deposited Rs. 72,88,000/- on various dates in Financial Year 2005-06 with Haryana Gram
1. in Bank. Assessee was specifically asked to explain the source of the deposit. However, no reply was received. Therefore, notice u/s 148 was issued on 28-30/03.2013 after recording the reasons for escapement of the income. Even in response to this assessee did not file any return of income; however, later on it was found that the assessee has passed away. Therefore, Inspector of the ld AO was deputed to enquire about the legal heirs of the assessee. The Inspector found that legal heirs are surviving and therefore, notice was issued to them to explain the source of the deposit. No information was received and therefore, AO made an addition of Rs. 72,88,000/-. The ld AO found that over and above the cash Page | 1 deposit there were several other credit entries of Rs. 4,05,177/-. Therefore, total income of the assessee was assessed at Rs. 76,93,177/- by passing an order u/s 144 read with section 147 of the Act on 25.03.2014.
3. One of the legal heirs filed an appeal before the ld CIT (A) contesting non service of notice as well as the legality of the order. The ld CIT (A) was also pleaded that notice was issued in the name of the deceased person and therefore, it is invalid. The ld CIT (A) rejected all the contentions of the assessee and dismissed the appeal. Therefore, this appeal has been preferred before us.
4. Shi Lali Mohan , Chartered Accountant, Ld AR submitted a detailed submission on the issue stating that the issue is squarely covers in favour of the assessee by the decision of the Hon’ble Delhi High Court in 118 Taxmann.com 46 Savita Kapila Vs. ACIT, wherein, it has been held that a notice issued u/s 148 of the Act against the dead person is invalid. He submitted the chronology of events too. He further referred to several judicial precedents on this issue. Therefore, he stated that the assessment order passed is also consequently is bad in law.
The ld DR vehemently supported the order of the lower authorities. He submitted that the ld AO never knew of the death of Mr Phool Singh as legal hier did not inform revenue.
We have carefully considered the rival contentions and noted the following dates which are important for deciding the issue. a. Notice u/s 148 of the Act was issued on 28.03.2013. b. Shri Phool Singh the appellant, in whose account the cash was deposited in Financial Year 2005-06 passed away on 28.11.2012.
Based on this it is apparent that notice has been issued u/s 148 of the Act on the dead person. Identical issue has been decided by the Hon’ble Delhi High Court in case of Savita Kapila (supra). The facts of the case are also identical to the facts of the case before us. In the present case also notice u/s 148 of the Act was issued on the dead person which is invalid. Once the notice issued u/s 148 is held to be invalid, all other consequential proceedings of the passing of the order by the ld AO and appellate order by the ld CIT(A) becomes invalid. Therefore, respectfully following the decision of the Hon’ble Delhi High Court in case of Savita Kapila (supra) wherein it is