TMI Blog2020 (10) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to be quashed. Accordingly in the facts and circumstances of the case and following the decisions as discussed above, we hold that the notice issued u/s 148 in the name of the deceased assessee is invalid. The same is liable to be quashed. Since the initiation of reassessment proceedings itself are held to be invalid, the reassessment order passed by the AO would not survive and liable to be set aside. - Decided in favour of assessee. - ITA No. 1249/JP/2019 - - - Dated:- 5-10-2020 - SHRI VIJAY PAL RAO , JM And SHRI VIKRAM SINGH YADAV , AM Assessee by : Shri Sanjeev Jain ( CA ) Revenue by : Ms Chanchal Meena ( Addl. CIT ) ORDER PER VIJAY PAL RAO, JM This appeal by the assessee through Legal Representative is directed against the order of ld. CIT (A), Ajmer dated 19th August, 2019 for the assessment year 2011-12. The assessee has raised the following grounds :- 1. Ld. CIT (Appeals) erred in law as well as on facts of the case by confirming action of the AO in issuing notice u/s 148 in the name of the deceased assessee. 2. Ld. CIT (Appeals) erred in law as well as on facts of the case by confirming action of the AO in estimating Agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO under section 147/148 are not valid and a nullity in the eyes of law. In support of his contention he has relied upon the following decisions :- Vipin Walia vs. ITO 382 ITR 19 (Delhi) Rajender Kumar Sehgal vs. ITO 414 ITR 286 (Delhi) Tribunal s Order dated 26th November, 2019 in ITA No. 989/JP/2015 (Jaipur) 4. On the other hand, the ld. D/R has submitted that the AO has conducted an enquiry to verify the source of cash deposit in the bank account of the assessee prior to issuing the notice under section 148. However, there was no response from the assessee or of the Legal Representative of the assessee to the said enquiry conducted by the AO. The ld. D/R has further submitted that the assessee has not filed any return of income under section 139(1) of the IT Act despite the fact that the cash deposit in the bank account of the assessee is more than the threshold amount liable to tax. Therefore, the AO had the belief that Income assessable to tax has escaped assessment. The ld. D/R has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. There is no dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e version of the assessee is not acceptable and dismissed accordingly. From the above it is clearly that the information about the income and expiry of the assessee is never furnished before the Assessing Officer before issuance of the notice u/s 148 of the Act. Neither the Legal Heir of the assessee has applied before the Assessing Officer about deleting of the PAN as the assessee has expired. In view of the above discussions, your objections against reopening of the case do not hold any merit and they are hereby rejected. You are requested to comply with the notice u/s 143(2) and notice u/s 142(1) issued to you in continuation of the proceedings. Thus it is clear that the AO has shifted the blame on the Legal Heir of the assessee regarding the information of death of the assessee instead of conducting the enquiry to find out the fact. Since it is not a case of pending assessment proceedings but the AO proposed to assess the income under section 147/148 of the Act, then it is incumbent upon the AO to issue the notice under section 148 to the right person. The subsequent participation of the Legal Heir in the assessment proceedings would not render the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bench, in Vipin Walia (supra) (where again the reassessment notice was issued in the name of the deceased and no notice was issued to the legal representative), held that: 11. Section 159 (2) of the Act makes a specific reference to a reassessment proceeding under Section 147 of the Act. While Section 159 (2) (a) of the Act talks of a proceeding already taken against an Assessee 'before his death'. Section 159 (2) (b) of the Act envisages any proceeding which could have been taken against the deceased if he had survived. It permits such a proceeding to be taken against the LRs of the deceased Assessee even if it had not taken while the Assessee was alive. Section 159 (2) (b) is relevant as far as the present case is concerned. 12. What was sought to be done by the ITO was to initiate proceedings under Section 147 of the Act against the deceased Assessee for AY 2008-09. The limitation for issuance of the notice under Section 147 /148 of the Act was 31st March 2015. On 27th March 2015, when the notice was issued, the Assessee was already dead. If the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31st March 2015 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Act, to fasten revenue liability upon a deceased individual, in the absence of pending or previously instituted proceeding which is really what the present case is all about, renders fatal the effort of the revenue to impose the tax burden upon a legal representative. 11. As far as the second argument, with regard to the clarification is concerned, this court is unpersuaded by the revenue's argument. The petitioner's objection that the transaction with an entity attributed to the deceased was unsupported by the books furnished to the revenue, was straightaway rejected. However, the reasons to believe are premised upon such a transaction with one Varun Capital Services Ltd. (as is evident from the table at Appendix B to that document). After rejection, of the objection, which meant that according to the revenue, such a transaction was indeed recorded in the deceased's books, the revenue attempted to correct the error by changing the name of the entity (with whom the suspect transaction occurred). This court is of opinion that such correction is neither innocuous nor innocent; it was clearly aimed at improving what was a fatally defective reasons to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not taken while the Assessee was alive. Section 159(2)(b) is relevant as far as the present case is concerned. 12. What was sought to be done by the ITO was to initiate proceedings under Section 147 of the Act against the deceased Assessee for AY 2008-09. The limitation for issuance of the notice under Section 147/148 of the Act was 31st March 2015. On 27th March 2015, when the notice was issued, the Assessee was already dead. If the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31st March 2015 by issuing a notice to the LRs of the deceased. Beyond that date it could not have proceeded in the matter even by issuing notice to the LRs of the Assessee. 9. Similar view has been taken earlier by the Hon ble Allahabad High Court in case of CIT vs. Suresh Chandra Jaiswal (supra) wherein it was held as under:- In the present case, the notice u/s 148 was addressed to an assessee who was already dead even on the date of issue of notice. The notice was issued on 28th March, 1985, while the assessee, Ganga Prasad Jaiswal had died on 20th March, 1985. The notice was not served upon the legal representatives of Ganga Prasad Jaiswai b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.3.2017. If we approach the problem sans complicated facts, a notice issued beyond the period of limitation i.e. 31.3.2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration. 18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application. 19. The Revenue seeks to bring their case under Section 292 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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