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2021 (7) TMI 827 - AT - Income TaxValidity of reopening of assessment u/s 147 - assessment against legal heirs - assessment has been framed in the name of one of the daughter of the deceased Tahar singh whereas there are seven legal heirs of the deceased assessee - HELD THAT - As relying on First Additional ITO Vs. Mrs. Susheela Sadananda 1964 (10) TMI 6 - SUPREME COURT we restore the entire appeal to the files of the AO. The AO is directed to issue notice to all the legal heirs of the deceased assessee and decide afresh as per the provisions of the law after giving a reasonable and sufficient opportunity of being heard to the assessee.
Issues:
1. Delay in filing the appeal and condonable grounds. 2. Validity of assessment order due to lack of notice under section 148. 3. Reopening of assessment based on knowledge of property sale. 4. Validity of income addition by AO. 5. Assessment of sale consideration as short-term capital gain. 6. Tax liability of legal heirs. Analysis: Issue 1: Delay in filing the appeal and condonable grounds The appellant challenged the dismissal of the appeal by the CIT(A) due to a delay in filing. The appellant argued that the legal heirs were unaware of the assessment order until the receipt of a recovery notice. The CIT(A) dismissed the appeal citing the limitation without considering the merits. The Tribunal opined that technicalities should not override the consideration of the case on its merits. Issue 2: Validity of assessment order due to lack of notice under section 148 The appellant contended that the assessment order was flawed as notice under section 148 was not served. They argued that the AO did not comply with jurisdictional requirements, rendering the assessment invalid. The Tribunal noted the necessity for proper issuance and service of notices for a valid assessment. Issue 3: Reopening of assessment based on knowledge of property sale The appellant disputed the reopening of assessment based on the sale of property by the deceased father, asserting that the AO did not apply valid reasons or serve proper notices. The Tribunal emphasized the importance of due process and valid reasons for reopening assessments. Issue 4: Validity of income addition by AO The appellant challenged the addition of income by the AO, claiming it lacked a legal basis. The Tribunal observed the need for assessments to be grounded in law and supported by evidence. Issue 5: Assessment of sale consideration as short-term capital gain The appellant argued that the sale consideration should not be entirely assessed as short-term capital gain without proper evaluation. The Tribunal highlighted the requirement for accurate assessment under relevant tax provisions. Issue 6: Tax liability of legal heirs The appellant contended that as a legal heir, they were not liable for the assessed income tax. The Tribunal acknowledged the need to determine tax liabilities accurately based on legal provisions. In consideration of the legal principles outlined by the Hon’ble Supreme Court regarding the representation of legal heirs in assessments, the Tribunal directed the AO to issue notices to all legal heirs for a fresh decision. The Tribunal allowed the appeal for statistical purposes, emphasizing the importance of due process and fair hearings for all concerned parties.
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