2019 (12) TMI 751 - AT - Income Tax

Initiation of re-assessment proceedings - HELD THAT - More recently, the Hon ble Supreme Court in Pr. CIT Vs. Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT has dealt with a similar situation in which notice was issued in the name of an amalgamating company. It was held that after amalgamation, the amalgamating company ceased to exist and thus the notice issued was rendered void ab-initio. Their Lordships further held that participation in the proceedings by the assessee cannot operate as estoppel against law. It is manifest that the facts and circumstances of the instant case are mutatis mutandis similar to those as considered by the Hon ble Supreme Court and the Hon ble Bombay High court in the aforenoted cases. Respectfully following precedent, it is held that the initiation of re-assessment proceedings and the proceedings following thereafter in the name of the deceased are void ab-initio. The assessment order is set-aside. Tribunal on the legal issue against the initiation of re-assessment proceedings, there is no need to dispose off the grounds on merits.

Summary

Issues:
1. Initiation of re-assessment proceedings.

Analysis:
The appeal pertains to the initiation of re-assessment proceedings by the Assessing Officer (AO) under section 148 of the Income-tax Act, 1961 for the assessment year 2005-06. The notice for re-assessment was issued in the name of a deceased person, Late Ashok N. Dukare, through his Legal Heir, Archana Ashok Dukare. The assessee challenged the initiation of re-assessment proceedings before the Commissioner of Income-tax (Appeals) contending that the notice issued in the name of a deceased person was invalid. However, the CIT(A) rejected the contention stating that there was no illegality in the issuance of notice through the Legal Heir and that the assessee had participated in the assessment proceedings. The Tribunal examined the facts and legal precedents in similar cases. The Tribunal noted that the notice issued in the name of the deceased person after five years from his death was illegal and void ab-initio. Citing judgments of the Hon'ble Bombay High Court and the Supreme Court, the Tribunal held that participation in the proceedings by the assessee cannot cure the defect of the notice being issued in the name of a deceased person. Therefore, the initiation of re-assessment proceedings and the subsequent assessment order in the name of the deceased were declared void ab-initio, and the assessment order was set aside.

The Tribunal's decision on the legal issue of the initiation of re-assessment proceedings rendered the need to address the grounds on merits unnecessary. Consequently, the appeal was allowed, and the order was pronounced in the Open Court on 15th November.