2020 (3) TMI 1269 - AT - Income Tax

Notice u/s. 143(2) r.w.s. 263, (wrongly typed as (143(3) in grounds) on a dead person for taking up the assessment - assessee challenged the notice issued on a dead person and invalid as not curable mistake u/s. 292B or section 292BB - HELD THAT - In the instant case, the assessee had expired before passing the order u/s. 263 dated 20.10.2016. This fact is evident from the order passed u/s. 143(3) on 16.09.2014 which was passed in the name of Sri Deverasetty Ravikumar, Legal Representative of Late Sri D.V. Subba Rao. CIT passed order u/s. 263 on a dead person, which is also invalid. In the order u/s. 263, the Ld. CIT has set aside the assessment order passed u/s. 143(3) r.w.s. 263, with a direction to redo the assessment after giving opportunity to the assessee - order u/s. 143(3) dated 16.09.2014 was set aside by order of 263. For initiation of reassessment proceedings, the AO required to issue notice u/s. 143(2) which the AO has issued in the name of dead person. Initiation of proceedings u/s. 143(2) on a dead person is bad in law and makes the assessment also invalid. In the instant case, there is no dispute that the notice u/s. 143 2 was issued on a dead person and the order u/s. 263 was also passed on a dead person. Therefore, taking consistent view, we hold that the issue of notice u/s. 143 2 on a dead person is invalid and renders the assessment made u/s. 143 3 r.w.s.263 void-ab-initio. Accordingly, we quash the notice u/s. 143 2 and the consequent assessment made u/s. 143 3 r.w.s. 263 and allow the appeal of the assessee.

Summary

Issues:
1. Validity of notice u/s. 143(2) on a deceased person for assessment under section 263.

Analysis:
In this case, the appellant challenged the notice issued on a deceased person for assessment under section 263, contending that it was invalid and not curable under sections 292B or 292BB of the Income Tax Act, 1961. The appellant argued that the assessment made under section 143(3) r.w.s. 263 was based on an invalid notice served on the legal heir of the deceased. The Commissioner of Income Tax (Appeals) upheld the validity of the notice and assessment, leading to the appeal before the ITAT.

The appellant's representative argued that since the assessment order under section 263 was passed on a deceased person, it was invalid. The representative cited precedents where notices issued on deceased individuals were deemed invalid, leading to the quashing of assessments. The appellant requested the quashing of the notice u/s. 143(2) and consequent assessments based on the same.

The ITAT considered the arguments from both parties and examined the facts of the case. It was noted that the assessment order under section 263 was passed on a deceased individual, rendering it invalid. The ITAT referred to previous decisions where notices issued on deceased persons were held invalid, leading to the cancellation of assessments. Consequently, the ITAT quashed the notice u/s. 143(2) and the consequent assessment made under section 143(3) r.w.s. 263, thereby allowing the appeal of the assessee.

In conclusion, the ITAT ruled in favor of the appellant, highlighting the invalidity of the notice issued on a deceased person for assessment under section 263. The ITAT's decision was based on the principle that initiating proceedings on a deceased individual is legally flawed, leading to the quashing of the notice and subsequent assessment. The judgment emphasized the importance of adhering to legal procedures and ensuring the validity of notices served in income tax assessments.