TMI Blog2018 (4) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... nd argumentative in nature. 3. In ground nos.1 and 2, the assessee has pleaded that the ld.CIT(A) has erred in confirming assessment order passed under section 144 r.w.s. 147 of the Income Tax. The assessment order is not sustainable in the eyes of law, because notice under section 148 was never served upon legal heirs of Maganbhai Nagjibhai Desai. It was in the name of the deceased person and the assessment order was also passed in the name of the deceased person. Thus, according to the assessee, the assessment order is not sustainable in the eyes of law. 4. Brief facts of the case are that the AO has got information that the assessee has deposited a sum of ₹ 10.45 lakhs in cash in saving bank account during the financial year 2007-08. The AO wrote a letter dated 13.3.2015 to the assessee requesting him to explain source of cash deposits in the bank account. According to the AO, this letter was not replied with, hence assessment was reopened and notice under section 148 dated 25.3.2015 was issued, which according to the AO was served on the assessee on 26.3.2015. Thereafter, the ld.AO has issued notices under section 142(1) on 18.5.2015, 4.6.2015, 8.7.2015 and 17.8.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hmedabad has held that the assessment order is not sustainable because notice was issued in the name of deceased person as well as assessment has been framed in the name of deceased person. This order of the Division Bench was also authored by me. The discussion made in that order reads as under: 7. We have considered rival contentions and gone through the record carefully. We find that the AO had issued notice under Section 158BD on 21.6.2004 upon Shri Kantilal B. Barot. Copy of the notice is available at page no.25. His legal heir, Shri Hasmukhbhai K. Barot, has pointed out to the 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 observed that this provision is prospective in nature. It was brought in statute w.e.f. 1.4.2008 and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the 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 defined under section 2, sub-section (31) which includes an individual. Individual means a single human being distinct from a group of human beings. Now, the question arises whether the person who has already expired, can be regarded to be a human being so as to fall within the definition of individual . Notice in this case is not issued in the name of the legal representatives of the assessee but issued in the name of an individual who has already expired on 17-11-2002. Therefore, it cannot be 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deceased person will be the person who are regarded to be the legal heirs of the deceased as they can be regarded to be the human being. The notice under section 148 has to be issued on the assessee,i.e.,individual (human being). A person who has already expired cannot be regarded to be a human being as on the date when the notice was issued in this case. Only legal heir can be regarded to be the individual. In view of the clear mandates of the provisions of section 2(7) and subsections (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 laws before giving any final verdict and accordingly these cases are discussed in the following paragraphs as under: .. 8. During the course of hearing, section 159 of the Income Tax Act, was also brought to our notice. This section provides a mechanism for putting tax liability upon the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt has dismissed writ petition and upheld issuance of notice as well as reopening of the assessment. SLP of this judgment was dismissed by the Hon ble Supreme Court. Hon ble High Court has considered judgment referred to it with regard to impact of passing assessment in the name of deceased person. Hon ble High Court concurred with these decisions and held that if assessment order was passed in the name of non-existing person, then it will be illegal. It is imperative upon me to take note of discussion made by the Hon ble High Court: 17. In the context of the present writ petition, the aforesaid ratio is a complete answer to the contention raised on validity of the notice under Section 147/148 of the Act as it was addressed to the erstwhile company and not to the limited liability partnership. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld to be invalid. 20. Commissioner of Income Tax v. Dimension Apparels Private Limited, (2015) 370 ITR 288 (Del) and Commissioner of Income Tax v. Intel Technology India (P.) Ltd., (2016) 380 ITR 272 (Kar) follow the ratio and decision in the case of Spice Infotainment Ltd. (supra), as assessment orders had been passed in the name of the non-existing assessee. These cases are therefore distinguishable. 21. Our attention was drawn to Parashuram Pottery Works Co. Ltd. v. ITO, Circle I, Ward A, Rajkot, (1977) 106 ITR 1 (SC) which records that the Assessing Officer entrusted with the task of calculating and realising tax should familiarise themselves with the relevant provisions and become well versed with the law on the subject. This is a salutary advise. Indeed there have been lapses and faults resulting in the present litigation. Notice under Section 147/148 of the Act was issued at the end of the limitation period. Noticeably, Assessment Order for the assessment year 2013-2014 was passed on 31.03.2016, one year earlier. Second lapse is also apparent. Despite correctly noting the background, notice under Section 147/148 of the Act was not addressed in the correct name a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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