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2017 (11) TMI 967 - AT - Income TaxValidity of proceedings taken against the assessee, who expired during the pendency of the proceedings - proceedings continued against legal representatives in the same capacity - Held that:- Any proceedings taken against an assessee before his death shall be deemed to have taken against the legal representatives which may be continued against the L/Rs. from the stage at which it stood on the date of the death of the assessee. A perusal of the record would indicate that a notice under section 143(2) was issued on 30.8.2010 when Shri Atulkumar M. Shah was alive. An opportunity to the assessee was given to make submission in support of his return, as required under section 143(2). This assessment proceedings was set in motion by the AO when the assessee was alive. Fact of death of the assessee was brought to the notice of the AO at the very fag end i.e. vide letter dated 23.12.2011. The AO has, though taken cognizance of this letter, but failed to issue notice to the L/Rs. so that they can put their defence before him. There is no illegality committed by the AO. He only committed an irregularity and it is settled position that wherever any irregularity crept in the proceedings, the proceedings itself cannot be declared void, rather irregularity deserves to be rectified. Considering these aspects, we allow appeal of the assessee for statistical purpose. We set aside both the impugned orders and restore all issues to the file of the AO for adjudication afresh. The ld.AO shall re-determine income of the assessee on merit after considering plea of the assessee whether loss suffered by the assessee in share trading deserves to be set off against ultimate assessed income. The ld.AO shall issue notice to the legal representatives by providing reasonable opportunity of hearing, and thereafter pass assessment order.
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