2022 (10) TMI 126 - AT - Income Tax

Reopening of assessment u/s 147 - reassessment proceedings initiated against a dead person - HELD THAT - assessee died much prior to initiation of reassessment proceedings, therefore, the action initiated by the Assessing Officer is void ab initio. No doubt that the death of assessee has not come in the notice of Assessing Officer, however, it is an admitted fact that the appellant has very well informed the ld. CIT(A) in writing that her husband has died on 12/5/2013. The ld. CIT(A) despite recording such fact has not given any finding nor has directed the Assessing Officer to take remedial action. Thus, I respectfully following the decisions pf Hon ble High Courts hold that reassessment proceedings initiated against a dead person is void ab initio and consequent action initiated and completed which is affirmed by ld. CIT(A) is set aside and assessment order is quashed. In the result, ground raised by the appellant is allowed.

Summary

Issues Involved:
1. Validity of reassessment proceedings due to notice served on a deceased person.
2. Additions made by the Assessing Officer without proper explanation from the legal heirs.
3. Delay in filing the appeal before the Commissioner of Income Tax (Appeals).

Issue 1: Validity of Reassessment Proceedings:
The legal heirs of the deceased assessee challenged the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961. The Assessing Officer reopened the case based on unexplained investments in mutual funds and bank deposits. The legal heirs contended that the deceased had passed away before the proceedings, and no notice was served on them. The Commissioner of Income Tax (Appeals) upheld the additions made by the Assessing Officer, citing lack of proof of savings accumulation and source of credits. However, the legal heirs argued that the initiation of reassessment against a deceased person is void ab initio. The Tribunal, after considering relevant case laws, held that proceedings against a dead person are invalid, and subsequent actions are without jurisdiction. Consequently, the assessment order was quashed.

Issue 2: Additions Without Proper Explanation:
The Assessing Officer made additions to the income of the deceased assessee without sufficient explanation from the legal heirs. The legal heirs claimed that the investments were made from savings and other redemptions, and the deceased had no taxable income. They argued that the Assessing Officer did not appreciate the facts properly. However, the Commissioner of Income Tax (Appeals) upheld the additions, stating lack of supporting documents and details. The Tribunal, while addressing the legal issue of reassessment proceedings against a deceased person, set aside the additions made by the Assessing Officer, rendering the assessment order invalid.

Issue 3: Delay in Filing Appeal:
The legal heirs of the deceased assessee faced a delay of 85 days in filing the appeal before the Commissioner of Income Tax (Appeals). The delay was condoned by the Commissioner, considering the circumstances of the case, where the assessee had passed away, and the legal heirs were residing abroad. The Tribunal, after allowing the appeal on the legal issue of reassessment proceedings against a deceased person, did not delve into the other grounds raised by the appellant on merit, as they had become academic due to the legal decision.

This detailed analysis of the judgment highlights the key legal issues involved, the arguments presented by the parties, the decisions of the lower authorities, and the final ruling of the Tribunal. The judgment emphasizes the importance of proper legal procedures and adherence to jurisdictional requirements in income tax assessments involving deceased individuals.