TMI Blog2018 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not place the evidence for construction of residential house within a prescribed period before the sale of immovable property. Rather, he could not place any evidence to demonstrate that he has incurred such expenditure in construction of properties either in the form of bills and vouchers or agreement with the contractor. In the absence of any documentary evidence, the contention of the assessee cannot be accepted that he has constructed the residential house within a period of one year from the date of sale of immovable property. Therefore, we find ourselves in agreement with the observations of the CIT(A) that assessee is not entitled for deduction under section 54F - Assessee appeal dismissed - ITA No.410/Bang/2018 - - - Dated:- 31-5-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Assessee : Mr. Nayaz Pasha, CA For The Revenue : Ms. Susan Thomas, Addl. CIT ORDER Per Sunil Kumar Yadav, Judicial Member This appeal is preferred by the assessee against the order of CIT(A), inter alia, on following grounds: 1) On the facts and circumstances of the case and in law, the Learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e death of assessee before the issue of Notice u/s 143(2) / 142(1) of the Act, and therefore there is no merit in contention of the Appellant that the notices were issued on a dead person. The relevant extract of para 4 of the Appeal Order reads as During the appellate proceedings the AR was asked as to whether the AO was informed by the legal heir of the Appellant regarding the death of appellant before issue of notice u/s 143(2) / 142(1) of the Act or not. This was admitted by AR that no such intimation was given to the AO. In the above fact, there is no merit in the contention of the appellant that the notices were issued on a dead person 7) The leard CIT (appeals) failed to appreciate that a) there is no provision under the Income Tax Act, for the legal heir to voluntarily inform the Assessing officer about the death of assessee. b) There is no mechanism under the Act, wherein the department will give prior intimation that Assessee would be issued notice u/s 143(2), so that the legal heir can inform the AO about the death of assesses before issue of such notice. c) The legal heir nor the assessee will get to know whether Notice u/s 143(2) would be rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in case of CIT vs M Hemanathan (Appeal No. 199 of 2016, Order dated 23.03.2016) following the decision of its division bench In Savithriammal v. State of Tamil Nadu [2006 MIJ 389] , has categorically held that the notice issued in the name of a dead person is a nullity. The relevant extracts of the decision of Honorable Madras High Court dealing in detail on the issue of notice on a deceased person is detailed below: Para 11 : The first contention of the learned Standing Counsel for the Department is that the notice, despite having been issued against the dead person, was served on the legal heir and the legal heir also participated in the proceedings. Therefore, it is his contention that it is not open to the legal heir now to take a position that the entire proceedings are a nullity. Para 12: But unfortunately, the said contention loses sight of the settled position that any proceeding initiated against a dead person is a nullity. The contention of the learned Standing Counsel for the Department loses sight of one important distinction between a case where the proceedings are initiated against a person, who is alive, but continued after his death and a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of the proceedings is made known and understood by the assessee, he should not be allowed to take advantage of certain procedural defects. That was the purpose behind the enactment of section 292BB. In cannot be invoked in cases where the very initiation of proceedings is against a dead person. Hence, the second contention cannot also be upheld Pam 21: Despite being put on notice that the noticee was dead, the Department chose to pursue the very same notice. In such circumstances, clause (b) of sub section(2) of Section 159 cannot be taken advantage by the Department Para 31: Therefore the very initiation of proceedings against the dead person and the continuation of the same despite having noticed the factum of death of the assessee, cannot be approved. 12) The Honorable ITAT-Delhi in the case of Bimla Devi Vs ITO (ITA No. 1062/De1/2016, dated 27.05.2016) deciding on the issue of notice u/s 143(2) on a dead person held in para 6 of its order that It is well settled that the issuance of Notice U/ s 143(2) is the pre-requisite condition for framing the assessment u/s 143(3) of the Act. However in the p resent case it is noticed that the AO issued the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax consultant was under belief that there is no restriction on the claiming exemption in respect of lraro residential properties and accordingly claimed exemption for both the properties. Assessee intended to construct and complete the residential property within the stipulated time of three years. However owing to the death of assesee, the residential property could not be constructed. Considering that assessee has constructed a residential house at Bidadi the prescribed due date, the exemption claimed u/s 54F is requested to be allowed on the cost of construction of residential house at Bidadi. PRAYER It is prayed and pleaded before the Appellate Authority to a) To quash the Assessment order as the same is illegal and non est. b) To allow exemption u/s 54F as claimed in the return of income to the extent of ₹ 38,50,000/- towards construction of house at Bidadi. 2. Though various grounds are raised but they all relate to the validity of the assessment framed under section 143(3) of the Act and disallowance of deduction under section 54F of the Income Tax Act (hereinafter called as an Act ). Through ground Nos. 1 to 15, the validity of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it his notice, he completed the assessment in the name of deceased assessee through its legal representative Smt. B. S. Nagarathna. Demand notice was also issued in the name of deceased assessee through its legal heirs. Therefore, there is no error in the assessment order for completing the assessment in the name of the deceased assessee through its legal heirs. 4. The learned DR further invited our attention to the judgments referred to by the assessee with the submission that in those cases, the factum of death of the assessee was timely brought to the notice of the AO and despite having knowledge of the death of the assessee, the AO completed the assessment in the name of the deceased after issuing notice in the name of the deceased assessee. Therefore, the ratio laid down in those judgments will not apply to the present facts of the case. 5. Having carefully examined the orders of authorities below in the light of rival submissions, we find that undisputedly the assessment was completed in the name of the deceased assessee through its legal heirs. Through in the assessment we find no infirmity. The main argument was raised with regard to the validity of the notice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue preferred an appeal before the Hon ble High Court and the Hon ble High Court confirmed the order of the Tribunal and their Lordship has observed that despite being put on notice that the assessee was dead, the Department chose to pursue the very same notice. In such circumstance, clause (b) of section 159(2) cannot be taken advantage by the Department. Wherein, in the present case, the AO was never informed about the death of the assessee before the issuance of the notice under section 143(2) of the Act. After issuance of the notice under section 143(2) of the Act, the legal heirs of the assessee started appearing along with their authorised representatives and joined the proceedings before the AO. Therefore, the ratio laid down in this case will not apply to the facts of the present case. In other cases also, the AO was timely informed about the death of the assessee. Despite having knowledge of the death of the assessee, the AO has continued with the proceedings against the deceased person. Therefore, the judgment referred by the assessee would not render any help to the assessee as they are distinguishable on facts. Thus, we find no legal infirmity in the assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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