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Facts
The appellant, Pradeep Jain, the alleged legal heir of the deceased Jay Narayan, filed five appeals against assessment orders for unexplained cash deposits. The lower authorities treated the appellant as a "legal heir" rather than a "legal representative". The department did not provide a clear response on whether the appellant had succeeded to the estate.
Held
The Tribunal held that treating the appellant merely as a "legal heir" without establishing them as a "legal representative" with clear succession to the deceased's estate is not sustainable. The court referenced Section 159(4) of the Act and a Supreme Court ruling for stricter construction.
Key Issues
Whether the appellant, treated as a "legal heir", can be assessed under Section 147 without being established as a "legal representative" of the deceased's estate.
Sections Cited
Section 147, Section 2(29), Section 2(11) of the Code of Civil Procedure, 1908, Section 159(4)
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Income Tax Appellate Tribunal, AGRA BENCH, “DB” AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
PER SATBEER SINGH GODARA, JM
The appellant herein Sh. Pradeep Jain (alleged legal heir of Late Sh. Jay Narayan) has filed his instant five appeals 335, 336, 337 and 338/Agr/2024 for assessment years 2013-14 to 2017-18, against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1066966935(1), ITBA/NFAC/S/ 250/2024-25/1066967387(1), ITBA/NFAC/S/250 /2024- 25/1066968177(1), ITBA/NFAC/S/250 /2024-25/1066968426(1) and ITBA/NFAC/S/250 /2024-25/1066968973(1), all dated 24.07.2024, involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively.
Heard both the parties at length. Case files perused.
It emerges at the outset during the course of hearing that both the lower authorities have treated the appellant herein Sh. Pradeep Jain as the “legal heir” of the deceased assessee, Late Sh. Jay Narayan, who left for his heavenly abode on 24.12.2014, for the purpose of assessing section 68 unexplained cash deposits/credits in his hands, involving varying sums, respectively in his hands.
This being the clinching backdrop involved herein, we sought to know from the Revenue side as to whether this appellant Sh. Pradip Jain has succeeded to the estate of the deceased assessee or not so as to be held as the “legal representative” as defined under section 2(29) of the Act adopting statutory definition given in section 2(11) of the Code of Civil Procedure, 1908 reading as under: “The legal representative means a person who in law represents the estate of deceased person……………..” 2 | P a g e
No clear-cut response has come from the department side to this effect. This is indeed coupled with the fact that both the learned lower authorities have held the assessee as “legal heir” than the deceased assessee’s “legal representative” in the foregoing terms. We deem it appropriate to quote section 159(4) of the Act as well that liability in such an instance of a legal representative is to the extent of deceased assessee’s estate’s value only. There is again no finding either in the assessment order or in the lower appellate discussion that such an estate has ever devolved upon the appellant or he is managing the same or an intermeddler thereof, as the case made be.
Faced with this situation, we hereby adopt stricter construction as per Commissioner vs. Dilip Kumar And Co. & Ors. [2018] 9 SCC 1 (SC) (FB) to treat that both the learned lower authorities’ impugned action/proceedings against the assessee having status of mere “legal heir” than the specific “legal representative” of the deceased assessee, as not sustainable in law in very terms. We accordingly reverse the learned lower authorities’ action/proceedings against the appellant on this preliminary legal issue itself which renders all other pleadings on merits as 3 | P a g e infructuous. The appellate succeeds in all the instant five cases in very terms. 7. These appellant’s five appeals to 338/Agr/2024 are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 6th February, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 6th February, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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