2023 (9) TMI 110 - HC - Income Tax

Reopening of assessment - Notice issued after assessee's death - liability of legal heirs - deceased/assessee had more than one legal heir but assessment against only one - HELD THAT - A careful perusal of the extract will show that the revenue were aware of the factum of death of Mr Kuldip Kohli, and that the proceeding had been attended by petitioner no. 1, i.e., Mr Darpan Kohli. Since this fact came to the knowledge of revenue, the impugned assessment order, although addressed to the deceased/assessee, adverts to the one of the legal heirs, i.e., Darpan Kohli/petitioner no. 1. Deceased/assessee had more than one legal heir, which includes petitioner nos. 2 and 3. Given this position, Mr Sunil Agarwal cannot but accept that the assessment order could not have been directed only against Darpan Kohli i.e., petitioner no. 1. Therefore, according to us, the best way to forward would be to set-aside the assessment order.It is directed accordingly. AO will issue notice to the petitioners, and grant them opportunity to present their defense qua the merits of the case.The notice will indicate the date and time of the hearing.AO will also permit the petitioners to file written response(s), if opportunity is sought in that regard.

Summary

Issues involved:
The judgment concerns a writ petition challenging an Income Tax notice and assessment order for Assessment Year 2017-2018, specifically addressing the issue of the deceased assessee's legal heirs and the validity of the assessment order against only one heir.

Details of the judgment:

1. The petitioners challenged a notice dated 06.04.2021 issued under Section 148 of the Income Tax Act, 1961, and the assessment order dated 09.05.2023 for AY 2017-2018.

2. The notice was addressed to Mr. Kuldip Kohli, who had passed away on 22.12.2017. The petitioners, surviving family members, were aware that the revenue knew about Mr. Kohli's demise.

3. The assessment order mentioned that the firm had been taken over by Mr. Kuldip Kohli as a proprietorship concern but he passed away in 2017. The assessment proceedings were attended by Mr. Darpan Kohli, one of the legal heirs.

4. The respondent/revenue was aware of Mr. Kuldip Kohli's death and that the proceedings were attended by one of the legal heirs. The assessment order was directed only against Darpan Kohli, which was not appropriate as there were other legal heirs involved.

5. The court set aside the assessment order and directed the Assessing Officer (AO) to issue a notice to all petitioners, granting them an opportunity to present their defense regarding the case.

6. The notice should specify the date and time of the hearing and allow the petitioners to file written responses if needed. The AO must pass a speaking order and provide a copy to the petitioners.

7. The writ petition was disposed of accordingly, and pending applications were closed. The parties were instructed to act based on the digitally signed copy of the order.