2023 (2) TMI 164 - AT - Income Tax

Revision u/s 263 - order passed on a deceased assessee - intimation about Death of assessee - legal heir did not know the proceedings having been initiated u/s.263 - HELD THAT - Admittedly, the facts remain that on the death of an individual, Government draws information in respect of death from the cremation spot or on the basis of doctor s death certificate. The State Government then issues the death certificate within 7 to 14 days. It is after this that the legal heir certificate is applied and obtained. Admittedly, the year 2020 2021 was the Covid period. The assessee died on 12.10.2020 due to cancer. The death certificate has been issued after nearly four months being 1.2.2021. Admittedly, there is no provision under which the legal heir could have intimated the revenue regarding the death of the assessee as they had no certificate issued by the statutory authorities to prove the death. Without the statutory authority certificate, the revenue would not accept the factum of the death either. It is only after obtaining the death certificate, the legal heir certificate can be applied for. The legal heir certificate has been issued to the assessee on 28.2.2022. Thus, a perusal of the screen shot of the e-filing of the revenue authorities shows that legal heir certificate has been filed before the revenue authorities on 21.3.2022 and the same has been approved within 3-4 days. Thus, clearly, the revenue has acted fast when it received the legal heir certificate. There has been delay at the level of State Government in issuing necessary certificate. Fault cannot be placed on the Revenue or the assessee. The prayer of the ld CIT DR that the issues should be restored to the file of the Pr. CIT for re-adjudication of the issues in the name of the legal heir of the assessee cannot be acceded to because the proceedings would be a fresh proceedings by issuance of the show cause notice to legal heir of the assessee and the adjudication thereof and this would not be possible as the time limit for the proceedings are time barred. An appellate authority does not have the authority to extend the limitation. These being the facts and considering the fact that the addition in appeal is only of Rs.11 lakhs, and as the order u/s.263 has been passed on a deceased assessee, same stands quashed. Appeal of the assessee stands allowed.

Summary

Issues: Appeal against order passed u/s.263 of the Act on a deceased assessee.

Analysis:
1. Submission by Assessee's Counsel: The appeal was filed against the order passed by the ld Pr. CIT under section 263 of the Act for the assessment year 2017-18. The Assessee's counsel argued that the assessee had passed away before the order was issued, and the death certificate was issued after a significant delay. The legal heir certificate was obtained even later. The counsel highlighted that without these certificates, they couldn't upload details on the Income Tax portal. The counsel presented the death certificate, legal heir certificate, and screenshots as evidence.

2. Revenue's Submission: The Revenue argued that there was no information available with the Pr. CIT regarding the death of the assessee. They suggested the issue be sent back to the Pr. CIT for reevaluation on the legal heir after providing an opportunity for a hearing. The Revenue contended that there was no evidence of the legal heir informing the Assessing Officer about the assessee's demise.

3. Tribunal's Decision: The Tribunal noted that during the COVID period in 2020 and 2021, the death certificate was issued with a delay due to the circumstances. The Tribunal emphasized that without the death certificate, the legal heir couldn't have informed the revenue authorities about the death. The legal heir certificate was issued later. The Tribunal observed that the legal heir certificate was filed before the revenue authorities promptly once it was obtained. The Tribunal acknowledged the Revenue's prompt action upon receiving the legal heir certificate. However, there was a delay at the State Government level in issuing the necessary certificates. The Tribunal concluded that the order passed under section 263 on a deceased assessee was invalid. The Tribunal declined the Revenue's request to re-adjudicate the issues in the name of the legal heir due to time limitations. Considering the circumstances and the minor amount involved, the Tribunal allowed the appeal of the assessee, quashing the order under section 263.

In summary, the Tribunal allowed the appeal filed by the assessee against the order passed under section 263 of the Act on a deceased assessee. The Tribunal considered the delay in obtaining necessary certificates during the COVID period and concluded that the order under section 263 was invalid. The Tribunal highlighted the importance of statutory certificates in informing revenue authorities about the demise of an assessee and emphasized that the legal heir certificate was filed promptly once obtained.