2013 (6) TMI 788 - AT - Income Tax

Summary

Issues involved: Appeal against order of Commissioner of Income Tax (Appeals) under sec.143(3) of the Income Tax Act, 1961 for assessment year 2004-05. Validity of jurisdiction under sec.153C of the Act and non-furnishing of material during assessment. Maintainability of appeal by legal representative of deceased assessee.

Issue 1: Assessment and Addition of Income
The deceased assessee, engaged in the business of exporting fabric and garments, had his return summarily processed for the impugned Assessment Year. The department alleged that the assessee and his daughter-in-law paid on-money for the purchase of flats, leading to an addition of Rs. 1,93,57,057/- to the assessee's total income. The Assessing Officer relied on material collected during a search and issued a notice under sec.153C of the Act. The CIT(Appeals) upheld this action, which was challenged by the assessee in appeal.

Issue 2: Jurisdiction and Non-furnishing of Material
The assessee contested the jurisdiction assumed under sec.153C of the Act and argued that the material gathered was not provided during assessment proceedings. Despite the contentions raised, the CIT(Appeals) rejected the arguments and affirmed the Assessing Officer's decision. The appeal also raised concerns regarding the lack of prior approval under sec.153B of the Act, highlighting procedural irregularities.

Issue 3: Maintainability of Appeal by Legal Representative
Following the demise of the assessee, his son sought to continue the appeal. The Revenue contended that the son had not inherited any property nor was named as a trustee in the deceased assessee's will, therefore lacking the locus to appeal. Citing relevant sections of the Act, the Revenue argued that the son did not qualify as a legal representative and referred to case law to support their position. The Tribunal found that the son had not succeeded to the assets or been appointed as a trustee, thus lacking the legal standing to pursue the appeal. Consequently, the appeal was dismissed for want of valid locus in favor of the appellant.

In conclusion, the Tribunal dismissed the appeal on the grounds that the son of the deceased assessee, despite being a family member, did not meet the legal criteria to represent the deceased in the proceedings under the Income Tax Act. The decision emphasized the importance of valid locus and legal representation in maintaining appeals, ultimately upholding the Revenue's position on the maintainability of the appeal.