9911796707
TMI Blog2023 (2) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate writ/order/direction for quashing/setting aside the Assessment/Re-assessment Order dated 10.09.2021 (Annexure-12) passed by Respondent No. 4 under Section 147 of the Income Tax Act, 1961 against the deceased assessee Bhim Sain Chopra @ Bhim Sen Chopra, as the said Assessment/Re-assessment Order is nonest and illegal having been passed against a dead assessee without even substituting and/or transposing legal heirs of the said assessee in accordance with law." 2. Brief fact of the case is that the Assessee filed its return of income for the A.Y. 2015-16 on 27.09.2015 showing total income of Rs. 19,82,030/-. The case was selected for scrutiny through CASS for "limited scrutiny" on the ground of mismatch in the sales turnover reported in Audit Report and ITR, as compared to the alleged higher turnover reported in Service Tax Return. Subsequently notice u/s 143 (2) & 142(1) was duly served on the Assessee. During the pendency of the scrutiny proceedings, the Assessee namely, Bhim Sain Chopra died and he was duly represented by his legal representative i.e., the present petitioner. Assessment order under section 143(3) of the Act was passed wherein the original declared incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed replies by the petitioner, intimating about the death of the original assessee, an assessment order under Section 147 of the Act, was passed by the Respondent No. 4 against the deceased assessee and an amount of Rs.58,07,471/- has been added to the income of the deceased assessee. Petitioner again informed the Respondent-Authority that the order of reassessment against the deceased assesse has no legal sanctity in the eye of law. Interestingly, a Penalty proceedings u/s 271(1)(b) and 271(1)(c) against the deceased assessee was initiated vide notice dated 26.10.2021 and 21.12.2021. Petitioner again informed the Respondent-authorities about the death of the assessee and that the initiation of the penalty proceeding is not maintainable. Thereafter, an Order dated 02.03.2022 was passed by the respondent-authority, wherein penalty proceedings initiated against the deceased assessee has been dropped by recording that the assessee has already expired on 18.01.2016 and hence, imposing penalty against the deceased assessee is bad in law. 3. Mr. Sumeet Gadodia, learned counsel for the petitioner submits that this is a peculiar case in which the Respondent-authority itself passed an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson dies, the assets and liabilities of the person automatically devolve on the legal heir and also all proceedings due against the deceased will continue in the name of the legal heir. He further relied upon Section 292 BB of the Income Tax Act, 1961 and submits that if the assessee had participated in the proceedings, by way of legal fiction the notice would be deemed to be valid even if there be infraction as detailed in said Section. He further submits that the scope of the provision is to make service of notice having certain infirmities to be proper and valid, if there was requisite participation on the part of the assessee. In the present case, though, all the notices were issued in the name of the deceased Late Bhim Sain Chopra, Sri Sandeep Chopra made compliance as a legal heir of the assessee and never raised any objection during assessment proceedings and fully cooperated with the Income Tax Authorities. Therefore, he is precluded from taking objection at this stage in view of the provisions of Section 292BB of the Act. 5. Heard learned counsel for the parties and perused the documents available on record. To decide the question as to "whether the assessment made un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub- section (2) of section 161, section 162 and section 167 shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub- section (5), be limited to the extent to which the estate is capable of meeting the liability. 6. After going through the aforesaid provision under Section 292 BB of the I. T. Act, 1961, it is to be noted that the intent of this Section does not save complete absence of notice. As a matter of fact, the notice must have emanated from the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. In the instant case, after going through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood on the date of death of the deceased. However, in the instant case the re-assessment proceeding has been initiated after issuance of notice against the dead person, which is not permissible in the eye of law. The condition precedent for acquiring jurisdiction to reopen any assessment is that notice under Section 148 should be issued to a correct and alive person and not to a dead person. Thus, in the instant case the jurisdictional requirement under Section 148 of the Act of Service of Notice was not fulfilled. The law mandates that the moment the revenue came to know about the death of the original assesse, they are legally bound to make the legal representative for the purpose of proceeding in the matter. At the cost of repetition, during the original assessment proceeding itself, the original assessee-Bhim Sen Chopra died and the assessing officer was well-informed, as such there was no question to issue a notice under Section 148 of the Act as against a dead person. 10. Heavy reliance has been made by learned Counsel for the Revenue that in view of the provision of Section 292 BB of the Act and the regular response by the petitioner has cured the defect of issuance of ..... 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