Income Tax Appellate Tribunal - Ahmedabad
Smt. Suchitra S. Dhanani L/H Of Late ... vs The Acit, Circle-1(2),, Baroda on 30 July, 2019
आयकरअपील यअ धकरण, अहमदाबाद यायपीठ 'B'- अहमदाबाद।
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD - BENCH 'B'
BEFORE SHRI WASEE AHMED, ACCOUNTANT MEMBER
& SMT. MADHUMITA ROY, JUDICIAL MEMBER
आयकरअपीलसं.IT(SS)A Nos. 157, 158 & 159/Ahd/2015
नधा रणवष /Asstt. Years: 2006-07, 2008-09 & 2010-11
Late Shri Sajid R. Dhanani Vs. ACIT
(Through legal heir Smt. Circle-1(2),
Suchitra S. Dhanani) Baroda
BF - 8/9, Scheme No. 74C,
Vijay Nagar,
Indore - 452 010
PAN No. ABW PD8 291 K
अपीलाथ / (Appellant) तयथ /
् (Respondent)
Assessee by : Shri Divyakant Parikh, AR
Revenue by : Shri R. C. Dandani, CIT DR
सन
ु वाईक$तार ख/Date of Hearing : 09/07/2019
घोषणाक$तार ख/Date of Pronouncement: 30/07/2019
आदे श/O R D E R
PER MADHUMITA ROY- JM:
This bunch of three appeals filed by assessee are directed against the orders
all dated 16.02.2015 passed by the CIT(A)-1, Vadodara arising out of the orders
dated 31.03.2013 passed by the AO u/s. 153A r.w.s. 143(3) of the Income Tax Act,
1961 (hereinafter referred to as 'the Act') for Assessment Years 2006-07, 2008-09
& 2010-11 respectively.
2. The short point involved in these particular matters is this as to whether the
assessment order can be passed in the name of a deceased person or not. The brief
facts leading to the issue is this that the assessee namely Shri Sajid R. Dhanani
IT(SS)A Nos. 157, 158 & 159/Ahd/2015
A.Ys. 2006-07, 2008-09 & 2010-11
expired on 11.11.2012. On 11.01.2013 a notice in his name was issued by the
office of the ACIT Circle-(2) Baroda under Sec. 153A(a) whereby and whereunder
the assessee was directed to furnish return of his income under Sec. 153A of the
Act, 1961 for A.Y. 2006-07 in view of the search and seizure proceeding initiated
in the case of Transworld Furtichme Group (Dhanani Group) Under Section 132 of
the Act on 11.02.2011. The said group mainly comprises of the business concern
of three brothers namely Mr. Yusuf Razak Dhanani, Mr. Raoof RAzak Dhanani
and Mr. Sajid R. Dhanani. The common thread that links the three groups of
business concerns run by the three brothers is M/s. Blue Deebaj Chemicals LLC, a
Dubai (UAE) based company which holds substantial shares of the flagship
concerns and subsidiary concerns including M/s.Transworld Furtichem Pvt. Ltd.
directly and indirectly. In reply to the said notice dated 11.01.2013 the return of
income was filed in the name of the Sajid Abdul Rajesh Dhanani under Sec. 153A
for A.Y. 2006-07 on 06.02.2013. Such return was verified by the legal heir namely
Suchitra Dhanani of the said Sajid Abdul Rajesh Dhanani, since deceased. It is
also an admitted position that by and under a letter dated 22.03.2013 the fact of
death of the original assessee namely Sajid Dhanani on 11.11.2012 was made
known to the ACIT by the assessee's representative being the Chartered Account
of the assessee while submitting the details of the companies. It is needless to
mention that all the documents are carefully annexed by the assessee to the Paper
Book submitted before the Ld. Tribunal. We find that the assessment was finalized
on 31.03.2013 with following additions:-
"9. Income as per Return of Income filed u/s. 153A(1)(a) :Rs.20,42,670/-
Add: Undisclosed income as per para 7.1.1 :Rs.17,00,000/-
Unexplained money as per para 7.1.2 :Rs.20,78,000/-
Unexplained money as per para 7.2 :Rs.9,80,000/-
House Hold expenses as per para 7.3 :Rs.3,60,000/-
TOTAL INCOME :Rs.71,60,670/-"
3. The case of the assessee before us is this that the order of assessment passed
in the name of the deceased Sajid R. Dhanani is not valid, having no legal sanctity
and thus liable to be quashed. The case of the authority is this that, once the legal
2
IT(SS)A Nos. 157, 158 & 159/Ahd/2015
A.Ys. 2006-07, 2008-09 & 2010-11
heir of the assessee filed the return of income in the name of the deceased the
responsibility automatically has been switched over to such legal heir who has also
participated in the assessment proceeding and hence cannot question the validity of
the outcome of such proceeding being the assessment order passed by the Ld. AO.
4. At the time of the hearing of the instant appeal Ld. Counsel appearing for
the assessee relied upon the series of judgments in support of his contention
including one which was passed by the Hon'ble ITAT Delhi Bench in ITA No.
519/Del/2013 for A.Y. 2003-04, copy whereof was also submitted to us as well as
to the Ld. DR.
5. Heard the parties, perused the relevant materials available on record
including the judgments relied upon by the Ld. AR before us.
We find that in the matter of ITA No. 519/Del/2013 (ITO Ward-20(3), New
Delhi vs. Late Sh. Som Nath Malhotra) the moot point involved as agitated by the
Revenue as to whether the Ld. CIT(A) has erred in law and on facts by ignoring
the provision of Sec. 292BB of the Act and holding the assessment not valid when
the legal heir of the assessee had duly attended the proceedings.
6. In that particular case on the basis of the information received from DIT
(Investigation) New Delhi that one Deepak Changia had given an accommodation
entry of Rs. 2,01,000/- to the deceased assessee, notice under Sec. 148 of the Act
dated 31.03.2010 was served whereupon on 03.05.2010 the wife of the deceased
informed the Ld. AO about the death of the deceased on 06.12.2002. The death
certificate and the copy of return was also furnished. The Ld. AO however framed
the assessment at an income of Rs. 22,99,976/- by making the addition of Rs.
19,94,120/-.
3
IT(SS)A Nos. 157, 158 & 159/Ahd/2015
A.Ys. 2006-07, 2008-09 & 2010-11
The Ld. CIT(A) held the proceeding invalid since notice under Sec. 148 of
the Act was issued in the name of the dead person and sought to be served on the
dead person too. Such view of the Ld. CIT(A) was upheld by the Ld. Tribunal
relying upon the judgment passed by the Hon'ble Allahabad High Court in the case
of CIT vs. Suresh Chandra Jaiswal in the manner as follows:-
"We have considered the submissions of both the parties and carefully gone
through the material available on the record. In the present case, it is an
admitted fact that the AO recorded the reasons for issuing the notice u/s 148
of the Act in the name of the deceased assessee Late Sh. Somnath Malhotra
and got the approval of the Addl. CIT, Range-20, also in the same name. The
AO issued notice dated 31.03.2010 u/s 148 of the Act in the name of the
deceased assessee and also mentioned in the body of the assessment order
dated 27.12.2010 that the notice u/s 148 of the Act was issued and served upon
the assessee by Post within the statutory time period prescribed, hi the present
case, the assessee had already expired on 06.12.2002 and the legal heir Smt.
Raj Rani Malhotra wife of the deceased assessee informed the AO on
03.05.2010 that the assessee had expired on 06.12.2002 and the return in the
name of deceased assessee was filed by the legal heir on 29.08.2003.
Thereafter also the AO did not issue any notice u/s 148 of the Act or 143(2) of
the Act in the name of the legal heir, therefore, the assessment framed by the
AO on the basis of the notice issued u/s 148 of the Act in the name of the
deceased assessee was invalid. On a similar issue the Hon'ble Allahabad High
Court in the case of CIT Vs Suresh Chand Jaiswal (supra) has held as under:
"That the notice under section 148 of the Income-tax Act, 1961, was
addressed to an assessee who was already dead on the date of issue of notice.
The notice was issued on March 28, 1985, while the assessee had died on
March 20, 1985. The notice was not served upon the legal representatives of
the assessee but on the munim. Even the name of the deceased assessee was
not correctly mentioned in the notice. The notice was invalid."
11. In the present case also the notice u/s 148 of the Act was issued on
31.03.2010 in the name of the deceased assessee and claimed to have been
served upon the deceased assessee who had already expired on 06.12.2002.
Therefore, the notice issued u/s 148 was invalid and the assessment framed on
the basis of the said invalid notice was void ab initio. In that view of the
matter, we do not see any merit in this appeal of the department.
12. In the result, the appeal of the department is dismissed."
We find that the fact available in that particular case is identical to that of
the assessee before us and we, therefore, do not hesitate to hold that such addition
is not sustainable in the eye of law which is an outcome of the proceedings
4
IT(SS)A Nos. 157, 158 & 159/Ahd/2015
A.Ys. 2006-07, 2008-09 & 2010-11
initiated against the dead person namely Late Sajid R Dhanani. We, thus, quash
the impugned addition made against the deceased assessee.
7. In the Result, assessee's appeal is allowed.
IT(SS)A Nos. 158 & 159/Ahd/2015 A.Ys. 2008-09 & 2010-11:-
8. These grounds of appeal are identical to that of the issue already been dealt
with by us in ITA No. 157/Ahd/2015 for A.Y. 2006-07 in favour of the assessee
and in the absence of any changed circumstances the same shall apply Mutatis
Mutandis. Hence, assessee's appeals are allowed.
9. In the result, assessee's appeal are allowed.
[Order pronounced in the Court on 30-07-2019.]
Sd/- Sd/-
(WASEEM AHMED) (MADHUMITA ROY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 30/07/2019
TANMAY TRUE COPY
आदे शक$ त*ल+पअ,े+षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. /यथ / The Respondent.
3. संबं धतआयकरआय0
ु त/ Concerned CIT
4. आयकरआयु0त(अपील) / The CIT(A)
5. +वभागीय त न ध, आयकरअपील यअ धकरण/ DR, ITAT,
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER
उप/सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपील यअ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation : 18-06- 2019&26.06.2019 5