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TMI Blog2018 (4) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... rder is not sustainable in the eyes of law. 4. Brief facts of the case are that the AO has got information that the assessee has deposited a sum of Rs. 10.45 lakhs in cash in saving bank account during the financial year 2007-08. The AO wrote a letter dated 13.3.2015 to the assessee requesting him to explain source of cash deposits in the bank account. According to the AO, this letter was not replied with, hence assessment was reopened and notice under section 148 dated 25.3.2015 was issued, which according to the AO was served on the assessee on 26.3.2015. Thereafter, the ld.AO has issued notices under section 142(1) on 18.5.2015, 4.6.2015, 8.7.2015 and 17.8.2015. He passed exparte assessment according to his best judgment under section 144 r.w.s. 147. He recorded a finding that a sum of Rs. 31.18 lakhs were deposited in the Dena Bank on various dates. He made addition of Rs. 31.18 lakhs with aid of section 68 on account of unexplained cash credit in the hands of Shri Maganbhai Nagjibhai Desai. Appeal to the ld.CIT(A) did not bring any relief to the assessee. The case of the assessee is that Shri Maganbhai Nagjibhai Desai was passed away on 26.12.2008. When process-server came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mukhbhai K. Barot, has pointed out to the AO vide letters dated 6.6.2004 and 23.6.2006 that Shri Kantilal B. Barot was expired on 27.12.2001. Thus, it is an established fact that notice under section 158BD was issued upon a deceased person. The question before us, whether this inherent defect in the notice can be legalized with the help of section 292BB. The learned counsel for the assessee submitted that section 292BB was considered by the Special Bench of the ITAT in the case of Kuber Tobacco Vs. DCIT, 117 ITD 273 wherein it has been observed that this provision is prospective in nature. It was brought in statute w.e.f. 1.4.2008 and hence, it was not effective when the notice under section 158BD was issued. Therefore, the department cannot get any benefit from this section. Apart from this, we find that Third Member of the ITAT in the case of Sikandar Lal Jain (supra) has made lucid enunciation the law on this issue, and hence, the notice issued upon a deceased person would not be valid one for initiating the proceedings. The discussion made in the order is worth to note, as under: "12. Now coming to the second issue whether the notice issued in the name of a dead person is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n individual. 'Individual' means a single human being distinct from a group of human beings. Now, the question arises whether the person who has already expired, can be regarded to be a human being so as to fall within the definition of 'individual'. Notice in this case is not issued in the name of the legal representatives of the assessee but issued in the name of an individual who has already expired on 17-11-2002. Therefore, it cannot be said that there was an individual in existence in the name of Shri Sikandar Lal Jain in whose name notice is issued as on the date when the proceedings under section 147 was initiated or the notice under section 148 was issued. Under the 1922 Act, the word "individual" did not necessarily refer to a natural human being but also included a juristic person like a Hindu idol, but under the 1961 Act definition, there is a separate appropriate specification "every artificial juridical person.....". Similar view has been taken by the Hon'ble Andhra Pradesh High Court in the case of Deccan Wine & General Stores v. CIT [1977] 106 ITR 111, in which it was categorically held that an individual under the Income-tax Act, 1961 means only a human being. The i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a dead person is not a valid notice. In the absence of issuance of a valid notice, the proceedings initiated under section 147 cannot be said to be valid one. Since both the parties have argued this issue extensively relying on a number of case laws claimed to be in their favour, I am bound to discuss all these case laws before giving any final verdict and accordingly these cases are discussed in the following paragraphs as under: ....." 8. During the course of hearing, section 159 of the Income Tax Act, was also brought to our notice. This section provides a mechanism for putting tax liability upon the legal representative, who inherited the property of the deceased. 9. This aspect has also been considered by the Tribunal in the case of Sikandar Lal Jain extracted (supra). Third Member has held that section 159(2) nowhere authorize the AO to take proceeding against the individual who has already expired, that is why the legal representative under section 2(7) are regarded to be assessee. This aspect can also appreciated by an example, viz. an assessee died leaving behind four legal representatives. The AO issued notice on the deceased. One of the legal representatives parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the aforesaid ratio is a complete answer to the contention raised on validity of the notice under Section 147/148 of the Act as it was addressed to the erstwhile company and not to the limited liability partnership. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused. 18. Petitioner relies on Spice Infotainment Ltd. vs. Commissioner of Service Tax, (2012) 247 CTR 500. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. After notice under Section 147/148 of the Act was iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f calculating and realising tax should familiarise themselves with the relevant provisions and become well versed with the law on the subject. This is a salutary advise. Indeed there have been lapses and faults resulting in the present litigation. Notice under Section 147/148 of the Act was issued at the end of the limitation period. Noticeably, Assessment Order for the assessment year 2013-2014 was passed on 31.03.2016, one year earlier. Second lapse is also apparent. Despite correctly noting the background, notice under Section 147/148 of the Act was not addressed in the correct name and even the PAN Number mentioned was incorrect. Nevertheless, human errors and mistakes cannot and should not nullify proceedings which are otherwise valid and no prejudice had been caused. This is the effect and mandate of Section 292B of the Act." 8. A perusal of paragraph-17, 18, 19 of the above judgment would indicate that they are in favour of the assessee in the case before me. The assessee is not harping upon any irregularity in the notice, rather he is challenging the very jurisdiction over the assessee, on account of issuance of notice in the name of a deceased person, and further, even a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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