Sh. Rajender PD. Aggarwal, New Delhi v. ITO, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI VIMAL GANDHI HONBLE PRESIDENT AND SHRI R.C.SHARMA HONBLE ACCOUNTANT MEMBER ITA NO.1649/DEL/2009 ASSESSMENT YEAR : 1999-2000 LATE SMT.KAILASH AGGARWAL THROUGH LEGAL HEIR SHRI RAJENDER PRASAD AGGARWAL 5546 KATRA RATHI NAI SARAK DELHI 110 006. PAN NO.ADBPA8964B. VS. INCOME TAX OFFICER WARD-29(2) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANKIT AGGARWAL AR. RESPONDENT BY : SMT.BANITA DEVI NAREON SR.DR. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 19.2.2009 FOR THE AY 1999-2000 IN THE MATTER OF OR DER PASSED U/S 143(3)/148 OF THE I.T.ACT. 2. VARIOUS GROUNDS HAVE BEEN TAKEN IN THE APPEAL ME MO BUT THE ONLY GROUND PRESSED RELATES TO OVERLOOKING THE PROVISIONS OF SE CTION 159 OF THE IT ACT WHILE FRAMING THE ASSESSMENT IN THE NAME OF DECEASED BY I MPLEADING ONLY ONE LEGAL HEIR INSTEAD OF ALL. 3. FACTS IN BRIEF ARE THAT ASSESSEE HAS FILED HER R ETURN OF INCOME AT RS.1 39 610/- ON 28.6.1999. THE ASSESSEE DIED IN A TRAIN ACCIDENT IN SEPTEMBER 2002. THE AO GOT INFORMATION FROM THE INVESTIGATIO N WING REGARDING GIFTS RECEIVED BY THE ASSESSEE DURING THE RELEVANT ASSESS MENT YEAR UNDER CONSIDERATION ITA-1649/DEL/2009 2 ACCORDINGLY NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 29.3.2006. IN THE ASSESSMENT FRAMED U/S 143(3)/148 STATEMENT OF HUSBAND OF THE ASSESSEE SHRI RAJENDER PRASAD AGGARWAL WAS RECORDED ON 20.7.2006 WHEN HE WAS ASKED TO EXPLAIN THE CREDIT OF THE GIFTS RECEIVED. AS THE H USBAND OF THE ASSESSEE WAS UNABLE TO SUBSTANTIATE THE GIFTS SO RECEIVED THE SAME WAS SURRENDERED AS INCOME AND TAX AMOUNT WAS ALSO PAID THEREON WITH A CONDITION THAT AO WILL NOT INITIATE ANY PENALTY PROCEEDINGS UNDER THE PROVISIONS OF THE ACT . THE AO FRAMED ASSESSMENT WHEREIN GIFT WAS ADDED IN THE ASSESSEES INCOME AND THE ASSESSMENT WAS FRAMED IN THE NAME OF SHRI RAJENDER PRASAD AGGARWAL HUSBAND OF THE ASSESSEE BY DESCRIBING HIM AS LEGAL HEIR OF THE ASSESSEE. AN A PPEAL WAS FILED BY THE ASSESSEE BEFORE THE CIT(A) WHEREIN GROUND WITH REGARD TO OVE RLOOKING THE PROVISIONS OF SECTION 159 OF THE ACT WHILE FRAMING THE ASSESSMENT IN THE NAME OF DECEASED BY IMPLEADING ONLY ONE LEGAL HEIR INSTEAD OF ALL WAS T AKEN. THIS GROUND WAS DISMISSED BY THE CIT(A) BY OBSERVING THAT NO NO-OBJ ECTION CERTIFICATE WAS FILED BY THE OTHER LEGAL HEIRS OF THE DECEASED ASSESSEE. AG GRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND WRI TTEN SUBMISSIONS WERE FILED COPY OF WHICH WAS ALSO HANDED OVER TO THE LEARNED DR. 4. WE HAVE HEARD THE LEARNED DR AND GONE THROUGH TH E ORDERS OF THE AUTHORITIES BELOW AS WELL AS WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE. FROM THE RECORD WE FOUND THAT ASSESSMENT WAS FRAMED IN THE NAME OF HUSBAND OF THE ASSESSEE BY BRINGING HIM AS A LEGAL HEIR. HOWEVER NO NOTICE WAS GIVEN IN THE NAME OF OTHER THREE LEGAL HEIRS NOR THEY WERE BROUG HT ON RECORD. IN THE ASSESSMENT ORDER ALSO THERE IS NO MENTION OF OTHER LEGAL HEIR S HAVING BEEN FILED NO OBJECTION. THE CIT(A) HAS HELD THAT REQUIREMENT OF SECTION 159 HAD BEEN MET WHEN NOTICE U/S 148 OF THE ACT HAD BEEN RECEIVED BY ONE OF THE LEGAL HEIRS AND THE OTHER LEGAL HEIRS PARTICIPATED IN THE PROCEEDINGS AND NO OBJECT ION CERTIFICATE FROM REMAINING LEGAL HEIRS HAD BEEN FURNISHED. AS PER OUR CONSIDE RED VIEW MERE FILING OF NOC BY THE OTHER LEGAL HEIRS ON DIFFERENT STAGE DOES N OT MEAN THAT THE REQUIREMENT OF SECTION 159 HAD BEEN MET WITH. WHILE FRAMING THE A SSESSMENT IN THE CASE OF ITA-1649/DEL/2009 3 DECEASED ASSESSEE UNDER THE PROVISIONS OF SECTION 159 THE AO IS DUTY BOUND TO BRING ALL THE LEGAL HEIRS ON RECORD. MERE FILING O F NOC BY THE OTHER LEGAL HEIRS DOES NOT AUTHORIZE THE AO TO OVERLOOK THE PROVISION S OF SECTION 159 OF THE ACT. HE HAS TO COMPLY WITH REQUIREMENTS OF SECTION 159 W HILE FRAMING ASSESSMENT IN THE CASE OF DEAD PERSON ACCORDING TO WHICH ALL THE LEGAL HEIRS OF THE DECEASED MUST BE IMPLEADED. THE PROVISIONS OF SECTION 159 ARE VE RY CLEAR IN THE SENSE THAT IF THERE ARE MORE THAN ONE LEGAL HEIRS THEN ALL MUST BE IMPLEADED. SINCE THE ASSESSMENT ORDER IS SILENT ABOUT THE ISSUE OF FILIN G OF NOC BY THE OTHER LEGAL HEIRS THEREFORE IN THE INTEREST OF JUSTICE WE RESTORE TH E MATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER BRINGING ALL THE LEGAL HE IRS ON RECORD. 5. IN THE RESULT THE APPEAL IS ALLOWED IN PART FOR STATISTICAL PURPOSES IN TERMS INDICATED HEREINABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON 23 RD APRIL 2010. SD/- SD/- (VIMAL GANDHI) (R.C.SHARMA) PRESIDENT ACCOUNTANT MEMBER DATED : 23.04.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-1649/DEL/2009 4