Income Tax Appellate Tribunal - Delhi
Sumitra Devi Mehta, Wife & L/H Of Late ... vs Ito, Ward- 61(1), New Delhi on 12 June, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "G" DELHI
BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER
&
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
I.T.A No.101/DEL/2019
Assessment Year 2013-14
Sumitra Devi Mehta, v. ITO
(Wife & Legal Heir of Late Shri Ward-61(1),
Dina Nath Mehta) New Delhi
137, SFS DDA Flots,
Punjabi Bagh Apartments,
New Rohtak Road,
Delhi
TAN/PAN: AAKPM7492E
(Appellant) (Respondent)
Appellant by: Shri Kamlesh Kumar Chaursia, CA
Respondent by: Shri Anuj Garg, CIT-DR
Date of hearing: 07 06 2023
Date of pronouncement: 12 06 2023
ORDER
PER PRADIP KUMAR KEDIA, A.M.:
The captioned appeal has been filed at the instance of the legal heir and wife of the deceased-assessee (Dina Nath Mehta) against the order of the Commissioner of Income Tax (Appeals)-36, New Delhi ('CIT(A)' in short) dated 15.10.2018 arising from the assessment order passed by the Assessing Officer dated 03.02.2016 under Section 143(3) of the Income Tax Act.
2. As per the grounds of appeal, the assessee has challenged the reduction in the claim of deduction under Section 54 of the Act by the Assessing Officer from Rs.1,86,41,207/- to Rs. 1,03,79,734/- while framing the assessment under Section 143(3) of the Act.
I.T.A No.101/Del/2023 23. When the matter was called for hearing, the ld. counsel for the assessee challenged the issue of jurisdictional notice issued under Section 143(2) of the Act on the dead person and also the consequent assessment order passed against the dead person (late Shri Dina Nath Mehta) on his PAN without bringing on record of his legal representatives. The ld. counsel thus asserts that the issue of notice under Section 143(2) which confers the jurisdiction for framing assessment under Section 143(3) is void ab initio as it is issued in the name of deceased person and hence the consequent assessment order are also null and void and thus deserves to be quashed at the threshold. To support such assertions, the ld. counsel referred to notice under Section 143(2) dated 18.09.2014 issued in the name of Shri Dina Nath Mehta and submitted that legal heir of the assessee, on her part, duly informed the Department about the death of the assessee and a confirmation from Income Tax Department was also issued vide intimation dated 28.08.2014, i.e., prior to issue of notice under Section 143(2). Under the circumstances, where the notice under Section 143(2) has been issued in the name of dead person despite intimation made to the Revenue in this regard, the whole proceedings beginning from issue of notice under Section 143(2) as well as the consequent assessment order for Assessment Year 2013-14 in question is vitiated at the threshold and is bad in law.
4. Per contra, the ld. DR for the Revenue submits that in the event an adverse view is taken, the matter should be remanded back to the Assessing Officer for framing the assessment in the hands of the legal heir.
5. We have carefully considered the rival submissions and perused the material on record. The appellant - Sumitra Devi Mehta I.T.A No.101/Del/2023 3 is a widow of Shri Dina Nath Mehta. The assessee namely, Dina Nath Mehta expired on 14.02.2014. The ITR of deceased assessee for Assessment Year 2013-14 was signed by the legal heir where deduction of Rs.1,86,41,207/- was inter alia claimed under Section 54 of the Act. The widow of the assessee also registered herself as legal heir of the deceased-assessee on the website of Income Tax Department vide Transaction Id No. 1707202159 dated 28.08.2014 by uploading a copy of death certificate which was duly acknowledged by the Income Tax Department on 28.08.2014. Subsequently, notices under Section 143(2) dated 03.09.2014 and 18.09.2014 for Assessment Year 2013-14 were issued by the Income Tax Department in the name of the deceased assessee and the jurisdiction to assess the income of the assessee under Section 143(3) was assumed. Under the circumstances, where the assessee has died prior to filing of return and necessary steps were taken on behalf of the legal heir of the assessee and the Department was made aware of the death, the issuance of notice under Section 143(2) in the name of the dead person is void ab initio and devoid of legal sanction.
6. The Hon'ble Delhi High Court in the case of Dharamraj vs. ITO, WP (C) 9227/2021 dated 17.10.2022 has examined the issue in length and held that the notice issued against a death person is null and void and all consequent proceedings/orders passed being equally tainted are liable to be set aside. The relevant operative paragraph in Dharamraj's case is reproduced herein for the sake of completeness of the point.
8. The issue of validity of a notice and proceedings held s ubsequent thereto against a dead person is no longer res integra. This Court in Savita Kapila vs. Assistant Commissioner of Income-Tax, in W.P. (C) No.3258/2020 has held as under:
I.T.A No.101/Del/2023 4" AN ALTERNATIVE STATUTORY REMEDY DOES NOT OPERAT E AS A BAR TO MAINTAINABILITY OF A WRIT PETITION WHERE THE ORDER OR NOTICE OR PROCEEDINGS ARE WHOLLY WITHOUT JURISDICTION. IF THE AS S ESSING OFFICER HAD NO JURISDICTION TO INITIATE ASS ESS MENT PROCEEDINGS.
THE MERE FACT THAT S UBS EQUENT ORDERS HAVE BEEN PASS ED WOULD NOT RENDER THE CHALLENGE TO JURISDICTION INFR UCTUOUS .
24 . Fu rth er, th e fa ct tha t an a ssessmen t o rd er ha s b een pa ssed and it is op en to cha llen ge b y wa y of a n app ea l, d o es no t d enud e th e p etitio n er o f its rig h t to challen g e th e no tice fo r a ssessmen t if it is witho u t ju risdiction . If th e assu mp tio n o f ju risd ictio n is wron g , th e a ssessment o rder pa ssed subsequ en t would ha ve no legs to stand . If th e no tice go es, so do es th e o rd er o f assessmen t. It is trite la w tha t if th e Assessing Officer h a d no ju risdictio n to initia te a ssessment p roceed ing, th e mere fa ct th at su b sequ en t ord ers ha ve b een pa ssed wou ld no t render th e cha llen g e to ju risdictio n in fru ctu ou s.
xxxxx THE S INE QUA NON FOR ACQUIRING JURISDICTION TO REOPEN AN ASSESSMENT IS THAT NOTICE UNDER S ECTION 148 SHOULD BE IS SUED TO A CORRECT PERS ON AND NOT TO A DEAD PERS ON. CONS EQUENTLY. THE JURIS DICTIONAL REQUIREMENT UNDER S ECTION 14 8 OF THE ACT. 1961 OF S ERVICE OF NOTICE WAS NOT FULFILLED IN THE PRES ENT INSTANCE.
xxxxx 26 . In the op in ion o f th is Cou rt th e issu a n ce of a n o tice un d er S ectio n 148 o f th e Act is th e fo unda tion fo r reop en ing o f an a ssessmen t. Con sequ en tly, th e sin e qua non fo r a cq u iring ju risd ictio n to reop en a n a ssessmen t is th a t such no tice sh ould b e issued in th e na me o f th e co rrect person. Th is requ iremen t o f issu ing no tice to a correct p erson and no t to a d ead person is no t merely a pro cedu ra l requ iremen t bu t is a co nd itio n preced en t to th e impugn ed notice b ein g va lid in la w. [S ee Sumit Ba lkrish na Gup ta v. Asst Commissio n er o f In come Ta x, Circle 1 6 (2 ), Mu mba i & Ors., (2 01 9) 2 TMI120 9 - Bomba y High Cou rt] , 27 . xxxxx Con sequ en tly, in view o f th e ab o ve, a reop en ing no tice u nd er S ectio n 148 o f th e Act, 1961 issued in th e name o f a d eceased a ssessee is n u ll a nd void.
XXXX.XX AS IN THE PRES ENT CASE PROCEEDINGS WERE NOT I.T.A No.101/Del/2023 5 INITIATED/PENDING AGAINS T THE ASS ESS EE WHEN HE WAS ALIVE AND AFT ER HIS DEATH THE LEGAL REPRESENTATIVE DID NOT S TEP INTO THE SHOES OF THE DECEAS ED ASSESS EE. SECTION 159 OF THE ACT. 19 61 DOES NOT APPLY TO THE PRESENT CAS E. 30 . S ection 159 o f th e Act, 1 961 app lies to a situ a tio n wh ere p ro ceed ing s a re initiated/p end in g aga in st the a ssessee wh en h e is a live and a fter h is d ea th th e lega l rep resen ta tive step s into the sh o es of th e d eceased a ssessee. Sin ce th a t is no t th e p resen t fa ctu a l scena rio , S ectio n 1 59 o f th e Act, 1 961 do es not app ly to the p resen t ca se.
31 . xxxxx THERE IS NO S TATUTORY REQUIREMENT IMPOS ING AN OBLIGATION UPON LEGAL HEIRS TO INTIMATE THE DEATH OF THE AS SESSEE.
32 . Th is Co u rt is of th e view th a t in the ab sen ce o f a sta tu tory p ro visio n it is d ifficu lt to cast a duty u p on th e lega l rep resen ta tives to intima te th e fa ctu m o f d eath of an a ssessee to th e in come ta x depa rtment. After a ll, th ere may b e cases wh ere th e lega l represen ta tives a re estrang ed fro m th e d eceased a ssessee or th e d ecea sed a ssessee ma y ha ve b eq u ea th ed h is entire wea lth to a cha rity. Co n sequ en tly, wh eth er PAN reco rd was updated o r no t o r wheth er th e Depa rtmen t wa s mad e a wa re b y the lega l rep resen ta tives o r no t is irrelevan t. In Ala melu Veerappan (supra) [2018 (6 ) TMI 76 0 - Mad ras High Court] it h a s b een h eld "no th ing h as b een pla ced before this Co urt b y th e Revenu e to sh ow th at th ere is a sta tu to ry ob lig a tio n on th e pa rt of the leg al rep resen ta tives o f th e d ecea sed a ssessee to immed ia tely in tima te th e d eath o f th e a ssessee or ta ke steps to can cel th e PAN registra tio n . "
xxxxx 34 . Con sequen tly, th e leg al h eirs a re und er no sta tu to ry ob lig a tio n to in timate th e d ea th of th e a ssessee to th e Reven u e.
S ECTION 2 92 B OF THE ACT. 1 961 HAS BEEN HELD TO BE INAPPLICABLE. VIS -A- VIS. NOTICE ISSUED TO A DEAD PERS ON IN RAJENDER KUMAR S EHGAL 1 2018 (1 2) TMI 69 7 (DELHI)] . CHANDRESHBHAI JAYANTIBHAIPATEL 12 019 (I) TMI353 - GUJARAT HIGH COURT1 AND ALAMELU VEERAPPAN f201 8 (6) TMI 760 - MADRAS HIGH COURT1 .
35 . Th is Cou rt is of the op inion th a t issu a n ce o f n o tice up on a d ead person and non -service of no tice do es no t come un d er the a mb it o f mistake, d efect o r omissio n . Con sequ en tly, S ection 292 B o f the Act, 1 961 d o es n o t a pply to th e present I.T.A No.101/Del/2023 6 ca se.
IN RAJINDER KUMAR SEHGAL (S UPRA) A COORDINATE BENCH OF THIS COURT HAS HELD THAT SECTION 292 BB OF THE ACT 1 961 IS APPLICABLE TO AN AS SESSEE AND NOT TO A LEGAL REPRES ENTATIVE.
xxxxx 38 . Th is Co u rt is a lso o f the view th a t Section 2 92 BB o f th e Act, 1 96 1 is ap p lica ble to an a ssessee and no t to a leg al rep resen ta tive. Fu rth er, in th e presen t ca se o n e of th e leg al h eirs o f th e d ecea sed a ssessee, i.e. th e p etitio ner, had n eith er coo pera ted in th e a ssessment pro ceed ing s no r filed retu rn or wa ived th e requiremen t o f Sectio n 1 48 o f th e Act, 19 61 or su bmitted to jurisd iction o f th e Assessin g Officer. Sh e ha d merely up loa d ed the d eath certificate of th e d eceased a ssessee.
xxxxxx 40 . Con sequently, th e app lica b ility of Section 29 2BB o f th e Act, 1 961 ha s been held to b e attra cted to an assessee and no t to lega l rep resen ta tives. "
9. The abo ve ju dgmen t wa s fo llo wed by this Cou rt in W.P.(C) No .267 8 /2020 titled Mrs. Srip a thi Subbaraya Manoh a ra L/H La te S ripa th i S ubbara ya Gup ta vs. Prin cip a l Commissio n er o f In come Ta x 22 , N.Delh i & An r.
10 . In th e p resen t case also , as the no tice u nder S ectio n 148 of th e Act was issu ed aga in st a d ead person , th e sa me is null a nd vo id and a ll con sequ en t p ro ceeding s/ord ers, includ ing th e a ssessmen t o rd er and the subsequ en t notices, b eing equa lly tain ted , are lia b le to b e set a side.
11 . Consequ en tly, th e impugn ed no tice d ate d 30.03 .201 9 issued un d er S ectio n 148 o f the Act is set a sid e along with a ll co n sequen tia l p roceed ing s/notices/a ssessmen t o rd ers.
12 . Th e p etition is a llo wed . There shall b e no ord er as to co sts."
7. The Hon'ble Delhi High Court has earlier expressed the aforesaid view in Braham Prakash vs. ITO, 275 ITR 242 (Del). Similar view has been consistently expressed in plethora of other judgments of different High Courts as well as Co-ordinate Benches of Tribunal.
8. In terms of the explicit observations made in the aforesaid judgment of the Hon'ble Delhi High Court, we find considerable I.T.A No.101/Del/2023 7 merit in the preliminary grounds raised on behalf of the legal heir for the assessee that the entire proceedings beginning from issuance of notice under Section 143(2) and culminating in assessment order passed under Section 143(3) of the Act is a nonest exercise and cannot be given effect in law. The assessment order passed under Section 143(3) for Assessment Year 2013-14 is thus quashed.
9. In view of this finding that the assessment order in question itself is found to be bad in law, other grounds on aspects of merits are not required to be looked into.
10. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 12/06/2023.
Sd/- Sd/-
[CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
DATED: 12/06/2023
Prabhat