DHAVAL DILIPKUMAR THAKKAR LEGAL HEIR OF LATE DILIPKUMAR AMRUTLAL THAKKAR,KHEDA vs. THE INCOME TAX OFFICER, WARD-1 NADIAD FORMERLY WARD-2, NADIAD

by the assessee read as follows :- “1. The Ld. A.O. has erred in law and in facts in issuing order u/s 143(3) in the name of dead person. The notice so issued is illegal/and invalid in law. The order passed consequent to such illegal/invalid notice is prayed to be quashed.

The solitary plea of the ld. Counsel for the assessee before us was that the assessment order was not a valid order in the eyes of law since it was made on a non-existent assessee who had expired during the pendency of assessment proceedings which fact was intimated to the Assessing Officer also. In this regard, he drew our attention to the assessment order wherein the fact stands recorded in paragraph No.2 of the order regarding the intimation of the demise of the assessee. The ld. Counsel for the assessee stated that this plea was being raised for the first time in the appellate proceedings before the ITAT; that it had never been raised before the ld. CIT(A) but being a legal ground under the facts being available on record, the same needed to be admitted for adjudication.

The ld. DR, though admitted to the facts as stated by the ld. Counsel for the assessee, vehemently opposed the contention raised by the ld. Counsel for the assessee.

Having heard both the parties, it is an admitted fact that the assessment in the present case has been made on a non-existent assessee who admittedly (SMC) Dhaval Dilipkumar Thakkar L/h of late Dilipkumar Amrutlal Thakkar Vs ITO AY : 2017-18 3 had expired during the pendency of assessment proceedings and which fact was very much in the knowledge of the Assessing Officer. The assessment order clearly notes the fact that two notices issued to the assessee remained unresponded to. That against the third notice issued the assessee initially sought adjournment and thereafter a reply was filed to the AO by the son of the assessee intimating the factum of death of the assessee during the pendency of the assessment proceedings. The order reveals that the AO notes the said fact and goes on to frame assessment in the name of the deceased assessee making addition of the cash found deposited in his bank account during demonetization of Rs.15 lacs.

The order passed is in clear violation of law. Section 159 of the Act provides the machinery for assessment of income of a deceased person providing for continuing proceedings against the legal representative of the deceased and fixing liability on the representative to pay taxes on the income assessed to the extent of assets inherited. Section 159(2) deals with the situation where the assessees expires during the pendency of proceedings and provides for the proceedings undertaken till then to be deemed to have been undertaken on the legal representative and to be continued thereafter on the legal representative from the stage at which it stood on the death of the assessee. The relevant provisions of section 159 (1) & (2) of the Act are reproduced hereunder :

In the present case after the intimation of the death of the assessee to the AO, no notice whatsoever was served on the legal representative. Prior to the death of the assessee there was no reply filed to the AO. Subsequent to his death, the AO was required to seek the necessary information from his legal representative for framing assessment. No such act was done by the AO. Besides the assessment is also framed on a deceased person. The Hon’ble jurisdictional High Court in the case of Chandreshbhai Jayantibhai Patel v ITO (2019) 101 taxamann.com 362 has categorically held that no order can be passed on a deceased assessee.

In view of the same, the assessment order is quashed as invalid, and the appeal of the assessee is allowed for the above reason.

In the result, the appeal filed by the assessee is allowed.