2018 (5) TMI 2012 - HC - Income Tax

Application for setting aside the abatement - condonation of delay of 3345 days - whether the appeal has to be heard on merits since by reason of the death of the assessee? - Revenue submits that the appeal is filed by the Commissioner of Income Tax Kochi and the Annexures produced along with the counter-affidavit are with respect to different officers - HELD THAT - We are of the opinion that the Revenue cannot take such a contention especially in the context of Tax Recovery Officer having send a communication to the wife of the deceased assessee specifically giving effect to the order of the ITAT which is challenged here. The Tax Recovery Officer would necessarily have before giving effect to the order enquired about the further proceedings taken on the basis of the order of the ITAT and this appeal itself was filed in the year 2003. Notice was issued only in the year 2009 for reason of the appeals having not been numbered for reason of the challenge raised to the court fees applicable by way of amendment of the Kerala Court Fees and Suits Valuation Act. Appeals were filed in time and was pending before this Court unnumbered till 2009 and thereafter numbered. In the year 2013 the Tax Recovery Officer has implemented the order and had communicated the demand to the wife of the deceased assessee. The Department ought to have taken up the proceedings for setting aside the abatement and condonation of delay if at all within a reasonable period from Annexure R(1)(a) or R(1)(b). We do not see any explanation for the gross delay caused. The applications hence would stand rejected and as a consequence the appeal is dismissed as abated.

Summary

Issues:
1. Abatement of appeal due to death of assessee.
2. Application for setting aside abatement and condonation of delay.
3. Impleading legal heir as additional respondent.
4. Awareness of the Revenue regarding the death of the assessee.
5. Delay in taking action by the Department.
6. Dismissal of the appeal as abated.

Analysis:

1. The primary issue in this case is the abatement of the appeal following the death of the assessee. The Revenue filed an application seeking to set aside the abatement and condone a delay of 3345 days, also requesting to implead the son of the deceased as an additional respondent. The son of the deceased, in a counter-affidavit, presented evidence indicating that the Department was aware of the death of the assessee long before the notice from the Court was returned. The impleading petition was filed significantly later, raising questions about the delay in action.

2. The application for setting aside the abatement and condoning the delay was based on the grounds that the Commissioner of Income Tax, Kochi, was unaware of the death of the assessee until the notice from the Court could not be served. However, the evidence presented by the son of the deceased, including communications with the Tax Recovery Officer, indicated that the Department had prior knowledge of the death. The Court noted the lack of a reasonable explanation for the substantial delay in taking action, ultimately leading to the rejection of the applications and the dismissal of the appeal as abated.

3. The Court highlighted that the Revenue's argument regarding different officers handling the appeal and related documents was not acceptable, especially considering the Tax Recovery Officer's communication with the deceased's wife regarding the Tribunal's order. The Department's actions, such as implementing the order in 2013 and communicating the demand to the wife of the deceased, indicated awareness of the situation. The Court emphasized the need for timely proceedings to set aside the abatement and condone the delay, which was lacking in this case, resulting in the dismissal of the appeal.

4. In conclusion, the Court rejected the applications for setting aside the abatement and condoning the delay due to the unexplained significant delay in taking action by the Revenue. As a consequence, the appeal was dismissed as abated, leaving the legal question to be addressed in future proceedings. The judgment underscores the importance of timely and diligent handling of legal matters, especially in cases involving the death of a party.