2016 (5) TMI 1440 - AT - Income Tax

Reopening of assessment - reopening on the basis of AIR information - notice in the name of dead person - Held that - Both the parties and carefully gone through the material available on the record. On perusing the assessment order dated 21.3.2013 in the name of Smt. Bimla Devi, deceased through legal heir Shri Chet Ram, it would be clear that the return of income was filed by Shri Chet Ram legal heir of the deceased assessee on 6.11.2012, therefore, the AO was having the knowledge that the assessee had already expired when the return of income was filed on 6.11.2012. The notice u/s 143(2) and u/s 142(1) dated 05.02.2013 were issued in the name of Smt. Bimla Devi the deceased assessee which had already expired. It is well settled that the issuance of notice u/s 143(2) is the pre-requisite condition for framing the assessment u/s 143(3) of the Act. However, in the present case, it is noticed that the AO issued the notices dated 05.02.2013 u/s 143(2) & 142(1) of the Act in the name of dead person i.e. Smt Bimla Devi. Therefore the assessment framed on the basis of said notice was void- ab initio.

Summary

Issues Involved:
Challenge to validity of assessment proceedings based on notice issued to deceased person.

Analysis:
1. The appellant, as the legal heir of the deceased assessee, challenged the initiation of assessment proceedings based on notices issued to the deceased person under sections 148, 142(1), and 143(2) of the Income Tax Act, 1961.

2. The Assessing Officer (AO) issued a notice under section 148 to the deceased assessee based on AIR information, followed by notices under sections 142(1) and 143(2). The legal heir filed the return of income after the death of the assessee, leading to the assessment being framed under section 144.

3. The legal heir contended that the assessment on the deceased person was void ab initio as the notices were issued in the name of the deceased even after the legal heir filed the return of income. The legal heir challenged the validity of the assessment before the ld. CIT(A), who upheld the AO's decision.

4. The legal counsel argued that the AO was aware of the assessee's demise when the return was filed by the legal heir, yet notices were issued in the deceased's name. The counsel asserted that the assessment on the deceased person should be set aside due to the improper issuance of notices.

5. The ld. DR supported the authorities' decisions, emphasizing that the assessment was valid as it was framed in the name of the deceased assessee through the legal heir.

6. Upon reviewing the submissions and evidence, it was noted that the AO issued notices in the deceased's name despite being aware of the demise at the time of filing the return. The assessment was based on void notices issued to a deceased person, rendering it invalid ab initio.

7. Consequently, the assessment framed by the AO was deemed invalid and quashed based on the improper issuance of notices to the deceased assessee.

8. As a result, the appeal of the legal heir of the deceased assessee was allowed, and the assessment order was set aside.

(Order pronounced in the Open Court on 27/05/2016)