2013 (12) TMI 1450 - AT - Income Tax

Validity of assessment - Return filed in the name of deceased person - Held that - Assessment was admittedly framed on the deceased person, which is non est in law, therefore, the Commissioner of Income-tax (Appeals) has rightly annulled the assessment. Moreover, the tax effect is also below the prescribed limit, therefore, in any case the appeal is not maintainable and we dismiss the same. - cross-objections is filed by the assessee stating therein that the tax effect in the appeal is below the prescribed limit. Since the appeal of the Revenue is dismissed and the order of the Commissioner of Income-tax (Appeals) is confirmed, cross-objection of the assessee becomes infructuous and stands dismissed. - Decided against Revenue.

Summary

Issues:
1. Validity of assessment made in the name of a deceased person.
2. Applicability of tax effect limit on appeal.
3. Annulment of assessment by the Commissioner of Income-tax (Appeals).

Issue 1: Validity of assessment made in the name of a deceased person
The appeal was filed by the Revenue against the order of the Commissioner of Income-tax (Appeals) challenging the annulment of the assessment. The appellant contended that the Assessing Officer had issued notices under section 143(2) based on information provided by the assessee in the return of income. However, during the hearing, it was revealed that the return was filed in the name of the deceased person, but the assessment was framed in the name of the deceased person without considering that assessments can only be made through legal representatives. The Commissioner of Income-tax (Appeals) correctly noted this discrepancy and annulled the assessment as non est and void ab initio.

Issue 2: Applicability of tax effect limit on appeal
The Revenue, in its appeal against the annulment, relied on the order of the Assessing Officer. However, it was highlighted that the tax effect in the appeal was below the prescribed limit, making the appeal not maintainable as per the instructions issued by the Central Board of Direct Taxes. The Tribunal found that the assessment was invalid due to being made on the deceased person and that the tax effect was below the limit, leading to the dismissal of the Revenue's appeal.

Issue 3: Annulment of assessment by the Commissioner of Income-tax (Appeals)
The Commissioner of Income-tax (Appeals) annulled the assessment due to its invalidity for being made in the name of a deceased person. The Tribunal upheld this decision, emphasizing that assessments can only be made through legal representatives. Furthermore, since the tax effect was below the prescribed limit, the appeal by the Revenue was deemed not maintainable. Consequently, the appeal of the Revenue and the cross-objection of the assessee were both dismissed, affirming the annulment of the assessment by the Commissioner of Income-tax (Appeals).

This judgment underscores the importance of adhering to legal procedures in assessments and the significance of tax effect limits on the maintainability of appeals.