2020 (5) TMI 115 - AT - Income Tax

Reopening of assessment u/s 147 - validity of notice issued U/s 148 issued in the name of deceased assessee - HELD THAT - It is a case where the notice has been issued in the name of deceased assessee as represented by her legal heir Shri Laxmi Kant chaudhary which is clearly in compliance with the requirements of the law. Similarly we donot find any infirmity in the assessment order where the same has been passed in the name of deceased assessee as represented by her legal heir Shri Laxmi Kant chaudhary. Where during the appellate proceedings Shri Laxmi Kant chaudhary wishes to contest the said position stating that his statement as so taken was under pressure during the assessment proceedings the onus is clearly on him to substantiate as to why he has not retracted from such statement at the first available opportunity and further he has to demonstrate through verifiable and credible documentation that there are other legal heirs to the estate of the deceased assessee which he has failed in the instant case. Therefore the contentions so advanced by the ld AR in this regard cannot be accepted. Issue of notice by non-jurisdictional Assessing officer - We agree with the contention of the ld DR that once the assessee has submitted to the jurisdiction of ITO Ward 2(1) Ajmer and has been allotted a PAN number such jurisdiction continues with the said Assessing officer unless there is a communication and request from the assessee due to change of her residence and thereafter the PAN is migrated by the tax department to the new Assessing officer having jurisdiction over the new residence of the assessee and cannot be done suo-moto by the assessee. Admittedly in the instant case no such request was made by the assessee and in the PAN data base there continues to be old address of Ajmer where she last resided and therefore ITO Ajmer had the valid jurisdiction over her tax matters and there is no infirmity in his action of issuing the notice u/s 148. Value of the properties not be considered as per the provisions of section 50C - AO has not disputed the fact that the assessee did file her return of income which was duly acknowledged by the Department and infact the said return of income has been taken into consideration and except for substituting the sale consideration for the deemed sales consideration u/s 50C as per value adopted by the sub-Registrar the Assessing officer has accepted the cost of acquisition as per the approved valuer enclosed with the said return of income and allowed the necessary indexation benefit as claimed in the return of income - Where the transaction has been duly reflected in the original return so filed there is no legal basis for the Assessing officer to have any reason to believe that income of the assessee has escaped assessment. We are of the view that in the instant case the Assessing officer doesn t have the legal basis to acquire jurisdiction for reassessment and thus the notice issued under section 148 and consequent reassessment proceedings are quashed and set-aside. In the result ground no. 1 of assessee s appeal is allowed.

Issues Involved:
1. Validity of action under Section 147 read with Section 148.
2. Validity of notice issued under Section 148 in the name of a deceased assessee.
3. Jurisdiction of the Assessing Officer (AO) issuing the notice.
4. Charging of interest under Sections 234A, 234B, 234C, and 234D, and withdrawal of interest under Section 244A.

Detailed Analysis:

1. Validity of Action under Section 147 read with Section 148:
The primary issue was whether the action taken under Section 147 read with Section 148 was valid. The Tribunal noted that the AO must form a prima facie opinion based on material that there is an escapement of income. The reasons recorded must show a nexus and relevancy to the opinion formed by the AO. In this case, the AO's belief that income had escaped assessment was based on the incorrect premise that the assessee had not filed a return for the assessment year under consideration. However, it was undisputed that the assessee had indeed filed the return, and the transaction of the sale of land was disclosed. Therefore, the Tribunal found no legal basis for the AO to believe that income had escaped assessment, thus quashing the notice issued under Section 148 and the consequent reassessment proceedings.

2. Validity of Notice Issued under Section 148 in the Name of a Deceased Assessee:
The notice under Section 148 was issued in the name of the deceased assessee through her legal heir, Shri Laxmi Kant Choudhary. The Tribunal found that the notice was issued correctly in the name of the deceased assessee as represented by her legal heir, which complies with legal requirements. The Tribunal rejected the contention that the assessment was null and void due to not impleading all legal heirs, as there was no evidence brought on record to establish that there were other legal heirs responsible for discharging the tax obligations of the deceased.

3. Jurisdiction of the Assessing Officer Issuing the Notice:
The Tribunal addressed the issue of jurisdiction, noting that the assessee had submitted to the jurisdiction of ITO Ward 2(1) Ajmer and had been allotted a PAN number. The jurisdiction continues unless there is a communication and request from the assessee due to a change of residence. In this case, no such request was made, and the PAN database still contained the Ajmer address. Therefore, the Tribunal found that ITO Ajmer had valid jurisdiction over the tax matters, and the notice issued under Section 148 was valid.

4. Charging of Interest under Sections 234A, 234B, 234C, and 234D, and Withdrawal of Interest under Section 244A:
Given that the reassessment proceedings were quashed, the Tribunal did not find it necessary to adjudicate on the merits of the additions or the charging and withdrawal of interest. These issues became academic and were dismissed as infructuous.

Conclusion:
The appeal filed by the assessee was allowed, with the Tribunal quashing the notice issued under Section 148 and the consequent reassessment proceedings. The Tribunal found no legal basis for the AO's belief that income had escaped assessment, and the jurisdiction of the ITO Ajmer was upheld. The issues regarding the merits of the additions and the charging of interest were dismissed as academic.

← Previous Next →