2015 (3) TMI 1378 - AT - Income Tax

Validity of assessment order passed u/s 143(3) - assessment made on a dead person - HELD THAT - Assessee expired on 23.12.2007 and this fact was brought to the notice of the AO during the course of assessment proceedings vide assessees s authorized representative Chartered Accountant letter dated 1.9.2009. The Bench had called for the assessment record to verify whether the said letter was filed by the assessee and was forming part of the assessment record or not. DR confirmed during the course of hearing by producing the assessment record that the said letter of the assessee dated 1.9.2009 was there in the assessment record. This proves that the assessee s AR had brought to the notice of the AO the factum of the death of the assessee - AO thereafter instead of taking steps to bring the legal heirs on record proceeded to frame the assessment of a dead person. Thus this issue is covered by the decision of this Bench of the Tribunal in the case of ITO Vs. Shri Akhter Nooruddinahmed Saiyed 2014 (6) TMI 113 - ITAT AHMEDABAD DR could not bring any material before us to show that the impugned assessment order was passed after issuing any notice to the legal representative of the deceased individual. Therefore in our considered view the appeal filed by the Revenue is not maintainable.

Summary

Issues:
1. Valuation of closing stock
2. Assessment order passed on a deceased person

Valuation of Closing Stock:
The appeal was filed by the assessee against the CIT(A)'s order confirming the addition of a specific amount for alleged reduction in the value of closing stock. The grounds of appeal included arguments about the scientific method adopted by the appellant, SEBI directions, lack of actual profit from stock valuation, and disallowance under rule 8-D. The CIT(A) was criticized for irrelevant observations and not considering alternative grounds. The Tribunal analyzed each argument in detail, emphasizing legal precedents and the necessity for proper assessment procedures. Ultimately, the Tribunal found in favor of the assessee, directing the deletion of the addition made by the AO.

Assessment Order Passed on a Deceased Person:
The issue revolved around the assessment order being framed on a deceased individual, which the appellant argued was a nullity. The AR of the assessee highlighted the death of the individual during the assessment proceedings, but the AO proceeded with the assessment without involving the legal heirs. The Tribunal referred to a similar case precedent where it was established that assessments on deceased persons are legally invalid. Citing relevant legal provisions and previous court decisions, the Tribunal concluded that the assessment order passed on the deceased individual was unlawful. Consequently, the Tribunal canceled the assessment order and allowed the appeal of the assessee.

The judgment by the Appellate Tribunal ITAT Ahmedabad addressed two main issues: the valuation of closing stock and the legality of an assessment order passed on a deceased person. In the valuation matter, the Tribunal analyzed various arguments raised by the assessee regarding the addition made by the AO, ultimately ruling in favor of the appellant and directing the deletion of the contested amount. Concerning the assessment order on a deceased individual, the Tribunal referred to legal precedents and statutory provisions to establish the invalidity of such assessments. Consequently, the Tribunal canceled the assessment order and allowed the appeal of the assessee.