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2015 (9) TMI 184 - ITAT AHMEDABAD

2015 (9) TMI 184 - ITAT AHMEDABAD - TMI - Validity of assessment order passed under section 158BD - notice issued under section 158BD was issued upon a deceased person - Held that:- Section 159(2) nowhere authorize the AO to take proceeding against the individual who has already expired, that is why the legal representative under section 2(7) are regarded to be assessee. This aspect can also appreciated by an example, viz. an assessee died leaving behind four legal representatives. The AO issued .....

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dering from all angles, we find that notice issued by the AO upon the deceased is defective notice and no valid assessment order could be passed. Respectfully following the order of the ITAT in the case of Sikandarlal Jain (2010 (12) TMI 623 - ITAT, Agra ), we allow the first ground of appeal and quash the assessment order. - Decided in favour of assessee. - IT(SS)A No.441/Ahd/2011 - Dated:- 13-8-2015 - SHRI RAJPAL YADAV AND SHRI ANIL CHATURVEDI, JJ. For The Assessee : Shri Tushar Hemani For The .....

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e that that a search and seizure operation under section 132 of the Act was carried out at the business of premises of Ohm Organisers, Surat on 29.10.1999. Some incriminating material were found and seized. The AO having jurisdiction over M/s.Ohm Organizers noticed that investments in purchase of plots/shops were made by the buyers after payment over and above disclosed in the sale deed. The assessee, Shri Hasmukhbhai Barot had also purchased flat bearing no. A/801 in Yogi Complex, Rander Road, .....

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he purpose of adjudication of ground no.1 raised by the assessee. In order to narrate brief history, we have taken cognizance of the background. 4. The learned counsel for the assessee, at the outset, submitted a notice under section 158BD was issued on 29.4.2004. It was issued in the name of Kantilal B. Barot. In response to this notice, it was contended by the legal heir, Shri Hasmukhbhai K. Barot that Shri Kantilal had expired on 27th December, 2001. The first reply was given vide letter date .....

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n the basis of a notice issued to a deceased person. For buttressing his contention, he relied upon the order of the ITAT, Third Member decision in the case of ITO Vs. SikandarLal Jain, 45 SOT 113 (Agra) (TM). 6. The learned DR, on the other hand, contended that section 292BB has been brought on statute w. E. F. 1..2008, which provides that if an assessee has participated in the proceedings, then he will be precluded to raise any objection viz. (a) notice not served upon him, or (b) not served u .....

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AO vide letters dated 6.6.2004 and 23.6.2006 that Shri Kantilal B. Barot was expired on 27.12.2001. Thus, it is an established fact that notice under section 158BD was issued upon a deceased person. The question before us, whether this inherent defect in the notice can be legalized with the help of section 292BB. The learned counsel for the assessee submitted that section 292BB was considered by the Special Bench of the ITAT in the case of Kuber Tobacco Vs. DCIT, 117 ITD 273 wherein it has been .....

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The discussion made in the order is worth to note, as under: 12. Now coming to the second issue whether the notice issued in the name of a dead person is a valid notice or not. Can the proceedings be initiated against a dead person ? The facts of the case clearly speak that the notice under section 148 was issued in the name of the assessee who has already expired on 17-11-2002. Shri Sikandar Lal Jain, the assessee, has submitted the return up to the assessment year 2002-03. His return for asse .....

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ng of the notice under section 148 dated 21-3-2005. For a valid initiation of the proceedings under section 147, in my opinion, issuance of a valid notice within the limitation period as well as recording of the reasons is essential. The service of the notice on the assessee is also necessary. A reading of sections 147, 148 and 149 makes it clear that the notice has to be issued to the assessee. Issuance of the notice to the assessee, as I have already held, is essential for valid proceedings. T .....

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amount of refund due to him or to such other person ; (b )every person who is deemed to be an assessee under any provision of this Act; (c )every person who is deemed to be an assessee in default under any provision of this Act;" From the reading of this section, it is apparent that assessee means a person by whom any tax or any sum of money is payable under this Act and also includes even every person who is deemed to be an assessee under any provision of the Income-tax Act. The person is .....

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said that there was an individual in existence in the name of Shri Sikandar Lal Jain in whose name notice is issued as on the date when the proceedings under section 147 was initiated or the notice under section 148 was issued. Under the 1922 Act, the word "individual" did not necessarily refer to a natural human being but also included a juristic person like a Hindu idol, but under the 1961 Act definition, there is a separate appropriate specification "every artificial juridical .....

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diction. The notice prescribed under section 148 for the purpose of initiation of reassessment proceedings is not a mere procedural requirement, but is a condition precedent to the validity of reassessment. If no notice is issued or if the notice issues is shown to be invalid, the proceed- ings initiated by the Assessing Officer would be invalid and void. The assessment framed on the basis of such invalid proceedings will be invalid. A notice issued to a dead person, in my opinion, cannot be reg .....

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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. Similarly, section 159(2) also empowers the Assessing Officer to take the proceedings against the legal representatives which he should have taken against the deceased if he had survived. Section 159(2) nowhere authorizes the Assessing Officer to take the proceedings against the individual who has already expired, that is why the legal representati .....

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ndividual. In view of the clear mandates of the provisions of section 2(7) and sub-sections (1), (2) and (3) of section 159, I am of the opinion that the notice issued in the name of a dead person is not a valid notice. In the absence of issuance of a valid notice, the proceedings initiated under section 147 cannot be said to be valid one. Since both the parties have argued this issue extensively relying on a number of case laws claimed to be in their favour, I am bound to discuss all these case .....

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