2015 (2) TMI 1190 - AT - Income Tax

Validity of reopening of assessment - notice issued in the name of deceased assessee who had died prior to the issuance of notice - Held that - Admittedly Shri Ashok Kumar Vij died on 11.2.2006 and notice u/s 148 of the Act dated 24.3.2009 placed on page no. 4 of the Paper Book clearly reveals that the same was issued in the name of Shri Ashok Kumar Vij and we also note that in response to this notice, Shri S.C. Jain CA of the deceased assessee filed a reply dated 14.5.2009 informing that the assessee had died on 11.2.2006. From paper Book page 5 of the assessee, we also note that income tax return for AY 2006-07 was filed on 31.10.2006 through legal heir of the deceased assessee Smt. Veena Vij, appellant of this case. In the light of above facts and circumstances of the present case, we are inclined to hold that the case is squarely covered in favour of the appellant by the decision of in the case of ITO vs Sikander Lal Jain (2010 (12) TMI 623 - ITAT, Agra ) and we hold that notice u/s 148 of the Act, issued in the name of deceased assessee who had died prior to the issuance of notice and this fact was also acknowledged to the AO by way of income tax return for AY 2006-07 filed on 31.10.2006 through legal heir/wife of the deceased assessee Smt. Veena Vij, was invalid and void ab initio and all subsequent proceedings conducted in pursuance to the said notice are also invalid. Therefore, impugned order of the CIT(A) is set aside and we hold that notice u/s 148 of the Act issued in the name of deceased assessee and all subsequent proceedings thereto are invalid and we quash the same. - Decided in favour of assessee.

Summary

Issues:
Validity of assessment proceedings initiated on the basis of notice u/s 147 in the name of deceased assessee without issuing notice to the legal heir.

Analysis:
The appellant challenged the assessment proceedings initiated based on a notice u/s 147 in the name of the deceased assessee without serving notice to the legal heir. The appellant argued that the notice issued to the deceased person was invalid, rendering the entire assessment process void ab initio. The appellant relied on legal precedents to support their contention, emphasizing that the notice should have been served on the legal heir as the individual assessee had passed away. The appellant's counsel referred to decisions by the Delhi High Court and the Allahabad High Court to strengthen their argument regarding the invalidity of the notice.

The Departmental Representative acknowledged the death of the assessee and the issuance of the notice in the deceased's name but contended that the legal precedents cited by the appellant were not applicable to the present case. The Departmental Representative supported the impugned order, claiming that the appellant was not entitled to the benefits derived from the legal principles cited.

Upon careful consideration of the arguments presented by both parties, the Tribunal referred to relevant legal judgments, including those by the Delhi High Court and the Allahabad High Court, regarding the validity of notices served on deceased individuals. The Tribunal also examined a decision by the Third Member Bench of ITAT, which concluded that a notice issued to a deceased assessee is void ab initio. The Tribunal found that the notice issued in the name of the deceased assessee, who had passed away before the notice was issued, was invalid. Consequently, all subsequent proceedings based on such notice were deemed invalid. The Tribunal held that the impugned order was to be set aside, and the notice u/s 148 of the Act, along with all subsequent proceedings, was declared invalid and quashed.

In conclusion, the Tribunal allowed the appeal of the legal heir, holding that the notice issued in the name of the deceased assessee and all subsequent proceedings were invalid. The Tribunal's decision was based on the principle that serving a notice on a deceased individual without notice to the legal heir renders the assessment proceedings void ab initio.