2019 (12) TMI 1101 - AT - Income Tax

Reopening of assessment u/s 147 against deceased assessee - legal heirs of the deceased assessee have challenged the assumption of jurisdiction u/s 147 - HELD THAT - The undisputed facts are that the assessee Shri Bhura Ram had expired on 26.11.2008 as per death certificate dated 11.02.2009 issued by Jaipur Municipal Corporation. The reasons for reopening the assessment u/s 147 were recorded on 15.03.2013 and thereafter the notice u/s 148 was issued in the name of assessee on 20.03.2013. Therefore at the time of issuance of the notice u/s 148 the assessee had already expired and the notice was thus issued in the name of deceased assessee. Further we find that there is no subsequent notice u/s 148 which has been issued by the Assessing Officer on the legal heirs of the deceased assessee. In the instant case the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Further no notice u/s 148 has been issued in the name of the legal heirs and therefore the provisions of section 159 cannot be invoked in the instant case. Consequently the present reassessment proceedings initiated by issuance notice on the deceased assessee are being quashed for want of jurisdiction. - Decided in favour of assessee.

Issues Involved:
1. Validity of assumption of jurisdiction u/s 147 by issuing notice u/s 148 on deceased assessee.
2. Challenge to the assessment framed u/s 144/148 for assessment year 2006-07.
3. Confirmation of additions and disallowances made in the order u/s 147/144.
4. Charging of interest u/s 234A, 234B, 234C & 234D of the Act.

Issue 1: Validity of assumption of jurisdiction u/s 147 by issuing notice u/s 148 on deceased assessee:

The appeal raised concerns regarding the initiation of proceedings under section 147 against a deceased individual and the subsequent issuance of notice under section 148 in the name of the deceased. The appellant contended that the notice issued to a deceased person was invalid and rendered the proceedings void ab initio. It was argued that no notice was issued to the legal heirs, making the assessment framed by the Assessing Officer invalid. The appellant cited previous decisions to support their argument, emphasizing the importance of a valid notice for reassessment proceedings to be lawful.

The Department, however, defended the proceedings, stating that the notice u/s 148 was issued in accordance with the law and served through post. The contention regarding the service of notice was also addressed, with the Assessing Officer and CIT(A) confirming the validity of the notice. The Department highlighted that objections raised by the assessee were duly considered and dismissed, asserting that the proceedings were conducted lawfully.

Upon examination, the Tribunal found that the notice was indeed issued to a deceased assessee without subsequent notice to the legal heirs. Citing legal precedents, including decisions by the Delhi High Court and other courts, the Tribunal concluded that the notice issued to a deceased individual was legally unenforceable. As no notice was issued to the legal heirs, the provisions of section 159 could not be invoked. Consequently, the reassessment proceedings were deemed void for lack of jurisdiction, rendering the other grounds raised by the assessee irrelevant.

Issue 2: Challenge to the assessment framed u/s 144/148 for assessment year 2006-07:

The appellant challenged the assessment framed under sections 144/148 for the assessment year 2006-07, specifically contesting the additions and disallowances made by the Assessing Officer. The appellant argued that the additions, particularly regarding Long Term Capital Gain, were contrary to the law and facts of the case, seeking their deletion. Additionally, objections were raised concerning the charging of interest under various sections of the Act, which the appellant denied liability for.

Issue 3: Confirmation of additions and disallowances made in the order u/s 147/144:

The appellant contested the confirmation of additions and disallowances made in the order u/s 147/144 by the ld. CIT(A). Allegations were made regarding the assessment being conducted without affording adequate and reasonable opportunity, leading to a breach of natural justice. Moreover, discrepancies were highlighted concerning the alleged service of notices under section 142(1), with the appellant refuting the claims made by the authorities.

Issue 4: Charging of interest u/s 234A, 234B, 234C & 234D of the Act:

Both the Assessing Officer and ld. CIT(A) were challenged by the appellant for charging interest under sections 234A, 234B, 234C & 234D of the Act. The appellant vehemently denied the liability for such interest, arguing that it was contrary to the provisions of law and facts of the case. The appellant sought the deletion of the interest charges imposed by the authorities.

In conclusion, the Tribunal allowed the appeal of the assessee, primarily on the grounds of the invalidity of the reassessment proceedings initiated against a deceased assessee without subsequent notice to the legal heirs. The judgment emphasized the necessity of a valid notice for reassessment proceedings and highlighted legal precedents supporting the decision to quash the proceedings for want of jurisdiction.

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