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TMI Blog2021 (12) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... of one account i.e. Yeel Investments and he promised that suitable taxes will be paid with respect to income in that account. He also admitted that he was the legal heir to the assets in his father's estate. Post search, Mr. Mehta communicated the fact of existence of such an account to the Executors of the Estate of his father and the Executors, with help from professional attorneys, brought back the amounts in the account of the Estate of Late V C Mehta. The Executors offered this amount to tax while filing return of income of the Estate for AY 2012-13. It was Mr. Mehta's contention that- although he was the legal heir, the estate of his father had not yet devolved on him and hence, the amount was taxable in the hands of the Estate. This fact was communicated to the Department by Mr. Anoop Mehta vide his letter dated 19.1.2012 as a reason for his not including these amounts in his own return of income. He also communicated that the amount was offered to tax in the hands of the Estate in AY 2012-13. 2.1 Noticing that the amounts in the HSBC account related to the period pertaining to AY 2006-07 and AY 2007-08, the AO reopened the assessment of these two years in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he admitted existence of one account i.e. Yeel Investments and he promised to offer the amount to tax. He also admitted that he was the legal heir to the assets in his father's estate. Subsequently, he communicated this fact to the Executors of the Estate of his father and the Executors, with help from professional attorneys, were able to bring back the amounts in the account of the Estate of Late V C Mehta. The Executors offered this amount to tax while filing return of income of the Estate for AY 2012-13. This fact was communicated to the Department by Shri Anoop Mehta vide his letter dated 19.1.2012 as a reason for his not including these amounts in his own return of income. 5.2 The Estate of Late Shri V C Mehta had filed his original return of income for AY 2006-07 and AY 2007-08 on 5.2.2008. Subsequent to the search, the AO issued a notice under section 148 of the Act for AY 2007-08 on 31.3.2014 and for AY 2006.07 on 23.2.2015 wherein the reasons recorded for reopening the cases were similar in nature, being the concealment of amounts shown as balance in the HSBC accounts in these years which were not offered to tax in the hands of the assessee. The notices were issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges that Mr Anoop Mehta, vide his letter dated 19.1.2012, has submitted that the account under question was opened by Late Shri Vrajlal Mehta and that the amount of US$ 24,68,070 has been declared in the hands of Estate of Late Shri Vrailal Mehta for AY 2012-13. The AO goes on to observe that since the credit is reflected during the period November 2005 to February 2007, declaration of this income in AY 2012- 13 is not correct and that the income should have been declared in the year in which the amount has been credited in the HSBC bank account. With reference to his decision to made an addition in the hands of Anoop Mehta as legal heir, the AO observed that: "5.10 It seems odd that the legal heir who claims beneficial ownership of the HSBC Bank account and also got the balance remitted in India could not obtain a copy of the bank account. Even the executors have not provided a copy of the account to provide their bonafides. Notwithstanding, the assessee's non co-operation as the legal heir has claimed that the undisclosed account belongs to his father, the same is treated as his undisclosed income on its peak balance during the relevant period. 5.4 In his submission dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ume correct jurisdiction and that the AO had assessed the wrong person and as such the assessment order was liable to be quashed. The ITAT held that it was the Estate of Late Vrailal Mehta who was liable to be assessed in respect of the HSBC income and not Mr Anoop Mehta in his capacity as legal heir. The assessee has relied on this order claiming that in light of same facts, the assessment order for AY 2006-07 is also liable to be quashed in light of the order of the ITAT for AY 2007-08. 5.7 In order to substantiate his bona-fide and intention to ensure assessment of income lying in the HSBC account in correct hands as also to stress that the assessee is not interested in exploring for loopholes to enable that the amount is not subjected to tax in India, the assessee has filed a letter dated 17th October, 2016, submitting that; "This is in reference to the appeal filed by us for AY 2006- 07 on 11.12.2015 before Your Honour, In the above referred appeal, we have taken various grounds including the general ground challenging validity of the assessment order passed by the Assessing Officer. We would like to clarity that we have filed our returns of income for the above assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme court in petition No. 7409/2018 dated 06- 04-2018). The issue in this case was that the appellant contended that the notice wis 148 was issued under wrong name. The Hon'ble Supreme Court noticed that the Hon'ble Delhi High Court, after considering the facts available in that case, concluded that the wrong name given in the notice was merely clerical error which could be corrected u/s 292B of the Act. The said view was upheld by Hon'ble Supreme Court, However, the facts available in the instant case are with regard to the jurisdiction, i.e. who has to be assessed for the impugned income and hence, in our view, the revenue cannot take support of the decision rendered in the case of Sky Light Hospitality LLP. 46. In view of the foregoing discussions, we find merit in the contentions of the assessee. Accordingly, we hold that the assessment framed on the Legal heir, i.e., on Shri Anoop Mehta as legal heir of late Vrajlal (c) Mehta in respect of income arising after the date of death is not in accordance with the provisions of sec. 159 r.w.s. 168 of the Income tax Act, 1961. Accordingly, Shri Anoop Mehta cannot be asked to pay tax as legal representative of late Vrajl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether on the facts and circumstances of R 3,87,21 920/. the case and in law, the Ld. CIT A) was justified in holding that the deposits in the foreign bank accounts could not be assessed in the hands of the assessee Shri Anoop Mehta, legal heir of late Shri Vrajlal Mehta, who is the beneficiary of the above account. 2. Whether on the facts and circumstances of as above the case and in law, the Ld. CIT(A) was justified in quashing the assessment proceedings for the year under consideration without going into the merits of the case. 6. At the time of hearing, the ld. DR submitted that he relies on the assessment order on merit and for technical ground, he relies on ITAT order. 7. On the other hand, ld. AR submitted in the form of written submission, which is reproduced below: 1. At the outset, we would like to point out the brief facts of the case. In September 2011, there was a search on the premises of Mr. Anoop Mehta, his companies and firms. He was shown certain documents by which he was informed for the first time of the existence of multiple bank accounts with HSBC Bank in Geneva. 2. During the course of Search itself, Mr. Anoop Mehta admitted to the fact that one accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come accordingly requesting due credit of taxes paid in AY 2012-13. 8. The Ld. AO vide his order dated 04.11.2015 passed u/s 143(3) r.w.s 147 of the Act accepted the income computed by the executors of the Estate but passed the order in the hands of Mr. Anoop Mehta as L/H of Late Vrajlal Mehta instead of the Estate. The Ld. AO also did not give any credit to taxes paid by the assessee on the same amount in AY 2012-13 wherein this income was offered by the assessee earlier and taxes had been duly paid. 9. Aggrieved by the said assessment order, the appellant filed an appeal before the Hon'ble Commissioner of Income Tax (Appeals) [CIT(A)] raising various grounds. However, for the sake of relevance and brevity, we would like to limit our submission to the discussion| observations with respect to the grounds of appeal of the present appeal preferred by the Department. 10. Accordingly, we would like to draw Your Honours' attention towards the Ground No. 1 which is reproduced as under: "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the deposits in the foreign bank accounts could not be assessed in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations made by the Hon "ble ITAT in the aforesaid order, the Hon'ble CIT(A) after duly considering the contentions of the assessee noted that the Ld. AO had issued notice u/s 148 in the name of Shri Anoop V. Mehta (Legal heir of late Vrajlal Chandulal Mehta). The Hon ble CIT(A) also noted that the appellant had made the AO aware of the entity which is required to be brought to tax with respect to the income under discussion. Accordingly, it was held by the Honble CIT(A) that the Ld. AO passed the order in the wrong name i.e. Anoop Mehta (as legal heir) and accordingly the same is bad in law. 15. Moving on, Ground No. 2 is reproduced as under: "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in quashing the assessment proceedings for the year under consideration without going into the merits of the case. 16. With respect to the above, we would like to submit that once it has been established by the appellate authorities that the assessment has been made on the wrong person, the income under consideration cannot be assessed in the hands of the said person. 17. Having said that, it may be of utmost importance to note at this jun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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