AVINASH V VYAS LEGAL HEIR OF LATE SITA VINOD VYAS, MUMBAI v. ITO WD 12(2)(3), MUMBAI

ITA 3538/MUM/2010 | 2004-2005
Pronouncement Date: 20-07-2011 | Result: Allowed

Appeal Details

RSA Number 353819914 RSA 2010
Assessee PAN AASPV6887G
Bench Mumbai
Appeal Number ITA 3538/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 15 day(s)
Appellant AVINASH V VYAS LEGAL HEIR OF LATE SITA VINOD VYAS, MUMBAI
Respondent ITO WD 12(2)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 20-07-2011
Date Of Final Hearing 27-06-2011
Next Hearing Date 27-06-2011
Assessment Year 2004-2005
Appeal Filed On 05-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A BEFORE SHRI D. MANMOHAN VICE PRESIDENT AND SHRI R.K. PANDA ACCOUNTANT MEMBER. ITA NOS.3538 & 3539/MUM/10 (ASSESSMENT YEARS : 2004-05 & 2005-06) SHRI AVINASH V VYAS LEGAL HEIR OF LATE SITA VINOD VYAS GANGA VIHAR 174/177 S.V. ROAD ANDHERI(W) MUMBAI-400 022 PAN AASPV6887G VS. INCOME TAX OFFICER WARD 12(2)(3) MUMBAI. APPELLANT. RESPONDENT. APPELLANT BY : DR. K. SHIVARAM. RESPONDENT BY : SHRI P.C. MAURYA. O R D E R PER SHRI R.K. PANDA : THE ABOVE TWO APPEALS FILED BY THE AS SESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS DT.19.2.2010 OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS)-23 MUMBAI RELATING TO ASSESSMENT YEARS 2 004-05 & 2005-06 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE BOTH TH E APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.3538 & 3539/MUM/10 - 2 - ITA NO.3538/MUM/2010 THE GROUND NO.1 RAISED BY THE ASSESSEE READS AS UN DER : THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE ORDER PASSED BY THE ASSESSIN G OFFICER IS BAD IN LAW AND NULLITY AS THE RECORDING OF THE REASONS WAS IN THE NAME OF DEAD PERSON. NOTICE UNDER SECTION 148 WAS ISSUE D IN THE NAME OF DEAD PERSON NOTICE UNDER SECTION 143(2) WAS ISS UED IN THE NAME OF DEAD PERSON AND EVEN THE ORDER UNDER SECTION 143 (3) WAS PASSED IN THE NAME OF DEAD PERSON. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ORIG INAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 23.9.2004 DECLARING TO TAL INCOME OF RS.11 320. THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT 1961 (THE ACT). DURING THE COURSE OF ASSESSMENT PR OCEEDINGS FOR THE A.Y. 2005-06 THE ASSESSING OFFICER WHILE EXAMININ G THE DETAILS RELATING TO ASSESSEES INVESTMENT U/S.54EC BONDS NOTICED TH AT THE CLAIM U/S.54EC MADE IN THE ASSESSMENT YEAR 2004-05 WAS NOT FULLY A CCEPTABLE. ACCORDINGLY HE RECORDED THE REASONS AS PER THE ORD ER SHEET NOTINGS DT.24.12.2007 FOR REOPENING THE ASSESSMENT U/S.147 AND THEREAFTER ISSUED NOTICE U/S.148. IN RESPONSE TO THIS NOTICE THE AS SESSEE FILED RETURN OF ITA NOS.3538 & 3539/MUM/10 - 3 - INCOME ON 24.1.2008 DECLARING THE SAME INCOME. IN THE ORIGINAL RETURN OF INCOME THE ASSESSEE DECLARED LONG TERM CAPITAL GAI NS ON GRANT OF DEVELOPMENT RIGHTS OF THE PROPERTY KNOWN AS GANGA V IHAR MORE PARTICULARLY DESCRIBED IN THE SCHEDULE FORMING PART OF THE DEVELOPMENT AGREEMENT DT.28.11.2003. THE ENTIRE (100%) CAPITAL GAIN OF RS.4 86 00 000 WAS OFFERED TO TAX IN THE HANDS OF T HE ASSESSEE. THE ASSESSEE IS STATED TO HAVE INVESTED THE ENTIRE CAPI TAL GAINS IN THE ELIGIBLE BONDS OF NABARD AND REC. THUS THE TAXABLE LONG TE RM CAPITAL GAINS WAS DECLARED AS NIL IN THE ORIGINAL RETURN. ALONG WITH THE ORIGINAL RETURN A COPY OF DEED OF FAMILY SETTLEMENT COPY O F DEVELOPMENT AGREEMENT WITH M/S. DISHA CONSTRUCTION AND COPIES O F CERTIFICATES ISSUED BY NABARD AND REC IN RESPECT OF INVESTMENT IN THE B ONDS QUALIFYING FOR EXEMPTION U/S.54EC WERE FILED. 3. IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.14 8 THE ASSESSEE HAS CLAIMED THAT ONLY 80% OF THE ORIGINALLY OFFERED LON G TERM CAPITAL GAINS I.E. RS.3 88 80 000 WAS TO BE CONSIDERED IN THE HAN DS OF THE ASSESSEE. BESIDES THIS THE ASSESSEE HAS OFFERED RS.5 99 500 AS PART OF LONG TERM ITA NOS.3538 & 3539/MUM/10 - 4 - CAPITAL GAIN BEING VALUE OF FLAT NO.61 ALONG WITH C AR PARKING. THUS AS PER THIS RETURN THE TOTAL LONG TERM CAPITAL GAINS COMPUTED BY THE ASSESSEE IS RS.3 94 79 500. 3.1 THE ASSESSING OFFICER CALLED FOR VARIOUS D ETAILS FROM THE ASSESSEE INCLUDING THE DEED OF FAMILY SETTLEMENT. AFTER CON SIDERING VARIOUS SUBMISSIONS MADE BY THE ASSESSEE AND ARGUMENTS ADVA NCED BEFORE HIM THE ASSESSING OFFICER DENIED THE BENEFIT OF EXEMPTI ON U/S.54EC TO THE ASSESSEE FOR THE REASON THAT NAME OF THE ASSESSEE D OES NOT APPEAR ON ALL THE CERTIFICATES. THE ASSESSING OFFICER HELD THAT THE CLAIM OF ONLY 80% OF THE LONG TERM CAPITAL GAINS IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S.148 IS NOT ACCEPTABLE SINCE THE ASSESSEE HAD OF FERED 100% OF THE LONG TERM CAPITAL GAINS IN THE ORIGINAL RETURN. THE ASS ESSING OFFICER FURTHER HELD THAT THE DEED OF FAMILY SETTLEMENT IS NOT ACCE PTABLE SINCE AS PER ASSESSEES OWN ADMISSION THE DEED WAS TO BE GIVEN EFFECT ON THE SALE OF THE PROPERTY. SINCE THE NAME OF THE ASSESSEE APPEA RS EITHER AS THE SOLE OWNER OR THE JOINT OWNER IN CERTIFICATES TO THE EXT ENT OF RS.3 23 70 000 ONLY THE ASSESSING OFFICER ALLOWED EXEMPTION U/S. 54EC TO THE EXTENT OF ITA NOS.3538 & 3539/MUM/10 - 5 - RS.3 23 70 000 ONLY. THE BALANCE AMOUNT OF RS.1 71 00 000 WAS NOT ALLOWED BY HIM AS EXEMPT U/S.54EC SINCE NAME OF TH E ASSESSEE DOES NOT APPEAR IN THE CERTIFICATES. 4. BEFORE THE LEARNED CIT(A) THE ASSESSEE CHALLENG ED THE VALIDITY OF THE ASSESSMENT ON THE GROUND THAT THE ASSESSMENT OR DER HAS BEEN PASSED ON THE INDIVIDUAL NAME OF THE ASSESSEE WHO HAS ALRE ADY EXPIRED ON 28.11.2007. IT WAS SUBMITTED THAT NEITHER THE ASSE SSMENT CAN BE MADE ON A DECEASED PERSON NOR A NOTICE CAN BE ISSUED ON A D ECEASED PERSON. THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT I N THE CASE OF CIT VS. DALUMAL SHYAMUMAL 276 ITR 62 (M.P.) WAS BROUGHT TO THE NOTICE OF THE LEARNED CIT(A). IT WAS SUBMITTED BEFORE HIM THA T THE DEFECT IN PASSING OF THE ORDER ON THE DECEASED PERSON FOR THE A.Y.2005-06 AND ISSUE OF NOTICE U/S.147 ON A DECEASED PERSON FOR A. Y. 2004-05 GOES TO THE VERY JURISDICTION AND THEREFORE THE ASSESSMENT ORDE R FOR BOTH THE YEARS ARE LIABLE TO BE QUASHED. ITA NOS.3538 & 3539/MUM/10 - 6 - 4.1 HOWEVER THE LEARNED CIT(A) WAS NOT CONV INCED WITH THE ARGUMENTS ADVANCED BEFORE HIM AND DISMISSED THE APP EAL OF THE ASSESSEE BY HOLDING AS UNDER : AS PER RECORD IT IS SEEN THAT NOTICE U/S.148 WAS ISSUED ON 27.12.2007 IN THE NAME OF MS. SITA VINOD VYAS. AT THE TIME OF ISSUE OF NOTICE THERE IS NO INTIMATION ON RECORD T O INDICATE THAT THE LEGAL HEIRS HAD INFORMED THE ASSESSING OFFICER OF T HE APPELLANTS DEMISE. IN RESPONSE TO THE NOTICE RETURN WAS FILED ON 24.01.2008 RETURN WAS SIGNED BY DR.AVINASHVYAS L/H OF LATE SI TA VYAS. NOTICES ISSUED BY THE ASSESSING OFFICER WERE COMPLI ED WITH WHICH SHOWS THAT THE L/H VOLUNTARILY SUBMITTED TO THE JUR ISDICTION OF THE ASSESSING OFFICER. NO OBJECTION AS HAS BEEN FILED IN GROUND NO.4 OF APPEAL WERE FILED BEFORE THE ASSESSING OFFICER. THE ASSESSMENT ORDER HAS BEEN PASSED IN THE NAME OF LATE MRS. SITA VINOD VYAS THE ONLY IRREGULARITY IS THAT THE WORDS THROUGH LE GAL HEIR DR. AVINASH VYAS HAVE NOT BEEN MENTIONED. THIS WAS ONL Y A TYPOGRAPHICAL MISTAKE. IN ALL FAIRNESS THE ASSESS ING OFFICER INTENDED TO MAKE ASSESSMENT ON THE ASSESSEE THROUGH ITS LEGAL HEIR. SINCE IT WAS AN INADVERTENT AND TYPOGRAPHICAL MISTA KE COMMITTED BY THE ASSESSING OFFICER. I HEREBY CORRECT THE MIS TAKE AND TREAT THE ASSESSMENT MADE BY THE ASSESSING OFFICER AS AN ASSE SSMENT ON LATE MS. SITA VINOD VYAS THROUGH L/H DR. AVINASH VYAS. THE ERROR IS ONLY A TECHNICAL IRREGULARLY AND IT IS WORTHWHILE T O MENTION HERE THAT THE CIT(A)S POWERS ARE COTERMINOUS WITH THAT OF ASSESSING OFFICER AND THEREFORE CIT(A) HAS ALL POWERS TO MAKE RECTIFICATION AND REQUIRED CORRECT IN THE ASSESSMENT ORDER. IT IS THE DUTY OF CIT(A) TO CONSIDER THE MATTER IN ALL ITS ASPECTS M ORE SO WHERE THE ITA NOS.3538 & 3539/MUM/10 - 7 - ASSESSING OFFICER HAS FAILED TO CONSIDER THE MATTER IN A PROPER MANNER. THE MISTAKE COMMITTED BY ASSESSING OFFICER IS A SIMPLE TYPOGRAPHICAL MISTAKE WHICH IS SUBJECT TO CORRECT A ND SAVED BY THE PROVISIONS OF SECTION 292B OF THE ACT. IT REMAINED A COST OF TECHNICAL DEFECT OF WRONG MENTION OF NAME OF LEGAL HEIR WITHOUT MAKING ANY DIFFERENCE IN THE CONCLUSION. IT WILL N OT MAKE ADDITION/ASSESSMENT NULL AND VOID. SECTION 292BCAN PROTECT THE ERROR OF WRONG MENTION OF NAME IN THE ASSESSMENT OR DER. FURTHER IF THE LEGAL REPRESENTATIVE IS PRESENT BE FORE THE TAXING AUTHORITY OR VOLUNTARILY APPEARS IN THE PROC EEDING WITHOUT SERVICE OF NOTICE OR UPON SERVICE NOT ADDRESSED TO HIM BUT TO THE DECEASED ASSESSEE AND DOES NOT OBJECT TO THE CONTI NUANCE OF THE PROCEEDING AGAINST THE DECEASED PERSON AND HAS BEE N HEARD BY THE ASSESSING OFFICER IN REGARD TO THE TAX LIABILIT Y OF THE DECEASED AND INVITES AN ASSESSMENT ON MERITS SUCH A LEGAL R EPRESENTATIVE MUST BE TAKEN TO HAVE EXERCISED THE OPTION OF ABAND ONING THE TECHNICAL PLEA THAT THE PROCEEDING HAS NOT BEEN CON TINUED AGAINST HIM ALTHOUGH IN SUBSTANCE AND REALITY IT HAS BEEN S O CONTINUED. IT WOULD NOT BE OPEN TO HIM TO TAKE UP A PLEA AT THE A PPELLATE STAGE AS AN AFTER THOUGHT THAT THE PROCEEDING TAKEN AND T HE ASSESSMENT ORDER MADE AGAINST THE DECEASED ARE A NULLITY. THI S POSITION HAS BEEN UPHELD IN CIT VS. SUMANBHAI C MUNSHAW (1981) 1 28 ITR 142 (GUJ). SIMILARLY IN MAHARAJA OF PATIALE VS. C IT (1943) 11 ITR 202 (BOM) THOUGH NOTICE WAS ISSUED TO THE DECEA SED BUT ANOTHER RECEIVED THE SAME FILED THE RETURN AND FILE D APPEAL AGAINST THE ASSESSMENT THE ASSESSMENT THOUGH NOT MADE IN T HE LEGAL REPRESENTATIVE WAS HELD TO BE VALID BY THE BOMBAY H IGH COURT. THUS THIS GROUND IS DISMISSED. ITA NOS.3538 & 3539/MUM/10 - 8 - 5. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRING T O THE LETTER DT.24.12.2007 ADDRESSED TO THE ASSESSING OFFICER ( COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 30 & 31) SUBMITTED THAT IN THE SAID LETTER NAME OF THE ASSESSEE HAS BEEN MENTIONED AS LATE SIT A VINOD VYAS. REFERRING TO PAGE 39 OF THE PAPER BOOK THE LEARNED COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE NOT ICE ISSUED U/S.148 OF THE ACT WHEREIN THE NAME IS MENTIONED AS MRS. SITA VINOD VYAS. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE THIS NOTICE U/S.148 WAS ISSUED ON A DEAD PERSON. REFERRING TO PAGES 41 & 4 2 OF THE PAPER BOOK HE SUBMITTED THAT IN THE RETURN FILED IN RESPONSE T O NOTICE U/S.148 THE NAME OF THE ASSESSEE WAS MENTIONED AS LATE SITA VIN OD VYAS AND IT WAS SINGED BY DR.AVINASH V VYAS LEGAL HEIR OF MRS. SIT A VINOD VYAS. REFERRING TO PAGES 43 & 44 OF THE PAPER BOOK WHICH ARE THE STATEMENT OF INCOME THE LEARNED COUNSEL FOR THE ASSESSEE AGAIN SUBMITTED THAT THE NAME OF THE ASSESSEE WAS CLEARLY MENTIONED AS LATE SITA VINOD VYAS BY L/H DR. AVINASH VINOD VYAS. REFERRING TO PAGE 46 OF THE PAPER BOOK THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NOTICE U/S. 143(2) WAS ITA NOS.3538 & 3539/MUM/10 - 9 - ISSUED ON 1.11.2008 WHERE THE NAME OF THE ASSESSEE HAS BEEN MENTIONED AS MRS. SITA VINOD VYAS. HE SUBMITTED THAT SINCE T HE NOTICES ISSUED ARE ON A DEAD PERSON AND THE ASSESSMENT ORDER HAS BEEN MADE ON A DEAD PERSON THEREFORE THE ENTIRE ORDER IS A NULLITY SI NCE THIS IS NOT A CURABLE DEFECT. HE SUBMITTED THAT THE ASSESSING OFFICER W AS DULY INTIMATED THE DEATH OF SITA VINOD VYAS AND THE ASSESSING OFFICER WAS VERY MUCH AWARE OF THE DEATH OF THE PERSON. THEREFORE THE E NTIRE ASSESSMENT ORDER IS A NULLITY. FOR THIS PROPOSITION HE RELIED ON T HE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF SHAIK ABDU L KADAR VS. ITO (1958) 34 ITR 451 WHEREIN IT HAS BEEN HELD THAT NOT ICE FOR REASSESSMENT ON THE PERSON KNOWN TO THE DEPARTMENT TO BE DEAD IS INVALID. REFERRING TO THE JUDGEMENT OF THE JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. LATE MANGI LAL THROUGH L/H BADRI PRASAD BHATIA (2004) 4 SOT 130 (JD) HE SUBMITTED THAT REASSESSMENT WAS HELD TO BE NULL AND VOID WHERE NOTICE U/S. 148 WAS NOT SERVED ON ALL THE LEGAL HEI RS OF DECEASED-ASSESSEE. REFERRING TO THE DECISION OF THE MADHYA PRADESH HIG H COURT IN THE CASE OF DALUMAL SHYAMUMAL (SUPRA) THE LEARNED COUNSEL S UBMITTED THAT WHEN ITA NOS.3538 & 3539/MUM/10 - 10 - ASSESSEE HAS DIED PENDING ANY ASSESSMENT PROCEEDIN GS THE ASSESSING OFFICER HAS TO ENSURE COMPLIANCE OF SECTION 159(2) BEFORE ANY ORDERS ARE PASSED. THE ASSESSMENTS FRAMED AGAINST A DEAD PERS ON WITHOUT BRINGING LEGAL REPRESENTATIVE ON RECORD WAS A NULLITY. IN T HE INSTANT CASE THE ASSESSING OFFICER ISSUED NOTICE U/S.143(2) ON A DEA D PERSON INSTEAD OF ISSUING THE SAME ON THE LEGAL HEIRS OF THE ASSESSEE . THEREFORE THE ENTIRE ASSESSMENT ORDER IS A NULLITY. REFERRING TO THE DEC ISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANI KAKAR (2009) 18 DTR 145 (DEL) AND A FEW OTHER DECISIONS HE SUBMITTED THAT SECTIO N 292BB IS NOT RETROSPECTIVE IN OPERATION. HE SUBMITTED THAT ASSE SSEES PARTICIPATION DOES NOT ABSOLVE THE ASSESSING OFFICER OF THE STATU TORY DUTY OF ISSUING AND SERVING NOTICE U/S.143(2) ON THE LEGAL HEIRS. HE ACCORDINGLY SUBMITTED SINCE THE REASONS ARE RECORDED IN NOTICE S U/S. 148 ON A DEAD PERSON THE NOTICE ISSUED U/S.143(2) ON A DEAD PERS ON AND THE ORDER U/S.143(3) HAS BEEN PASSED ON A DEAD PERSON THEREF ORE THE ENTIRE PROCEEDINGS ARE A NULLITY. ITA NOS.3538 & 3539/MUM/10 - 11 - 6. THE LEARNED D.R. ON THE OTHER HAND SUPPORTED T HE ORDER OF THE LEARNED CIT(A). HE SUBMITTED THAT THIS IS A MERE T YPOGRAPHICAL ERROR. THE NOTICES ARE USUALLY PREPARED BY THE CLERICAL ST AFF AND THIS MISTAKE IS NOT A MISTAKE DONE BY ASSESSING OFFICER. MUCH IMPO RTANCE SHOULD NOT BE GIVEN TO THE LAPSE OF THE TECHNICALITIES. IN V IEW OF THE PROVISIONS OF SECTION 292B THIS IS A CURABLE MISTAKE AND THE ASS ESSMENT CANNOT BE TREATED AS NULL AND VOID. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES PERUSED THE ORDERS OF THE ASSESSING OFFICER AND TH E CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAV E ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. ADMITTEDLY IN T HIS CASE THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF EXAMINATION OF DETAILS FURNISHED DURING THE ASSESSMENT PROCEEDINGS FOR A.Y. 2005-06. THE ASSESSEE VIDE LETTER DT.24.12.2007 ADDRESSED TO THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS FOR A.Y. 2005-06 HAS MENTIONED THE NAME OF THE ASSESSEE AS LATE SITA VINOD VYAS. THE COPY OF THE DEATH CERTIFICATE OF THE ASSESSEE HAS BEEN FILED IN PAPER BOOK PAGE 32 WHICH ITA NOS.3538 & 3539/MUM/10 - 12 - WAS FILED BEFORE THE ASSESSING OFFICER AS PER CERTI FICATION BY THE LEGAL HEIR OF THE ASSESSEE AND THE SAME HAS NOT BEEN DISP UTED BY THE REVENUE. THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.148 HAS BEEN FILED IN THE NAME OF LATE SITA VINOD VYAS AND THE CERTIFICATION HAS BEEN DONE BY DR. AVINASH VINOD VYAS LEGAL HEIR OF LATE SITA VINOD V YAS. THE COMPUTATION STATEMENT FILED ALONG WITH THE RETURN O F INCOME ALSO MENTIONS NAME OF THE ASSESSEE AS LATE SITA VINOD VY AS BY DR. AVINASH VINOD VYAS. ALL THE ABOVE THINGS SHOULD HAVE PROMP TED THE ASSESSING OFFICER TO ISSUE NOTICES TO THE LEGAL HEIRS OF LATE SITA VINOD VYAS. HOWEVER WE FIND THE NOTICE U/S.143(2) DT.1.11.2008 HAS BEEN ISSUED TO MRS. SITA VINOD VYAS. EVEN THE ASSESSMENT ORDER U/ S.143(3)/147 HAS BEEN ISSUED IN THE NAME OF LATE SITA VINOD VYAS. T HIS TYPE OF CONDUCT ON THE PART OF THE ASSESSING OFFICER SHOWS THAT EI THER HE WAS UNAWARE OF THE LAW HE WAS ADMINISTERING OR FAILED TO UNDERSTAN D THE LAW. 7.1 IT HAS BEEN HELD BY THE HON'BLE SUPREME CO URT IN THE CASE OF CIT VS. AMARCHAND N. SHROFF 48 ITR 59 THAT AN ORDER P ASSED BY THE ASSESSING OFFICER AGAINST A DEAD PERSON BECOMES A N ULLITY. IN THE INSTANT ITA NOS.3538 & 3539/MUM/10 - 13 - CASE SUFFICIENT MATERIAL WAS AVAILABLE BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS DIED. STILL THE ASSESSING OFFICER HAS PASSED THE ORDER AGAINST A DEAD PERSON. THEREFORE IN OUR OPINION T HE ENTIRE ASSESSMENT PROCEEDINGS BECOMES A NULLITY. THE VARIOUS DECISIO NS RELIED ON BY THE CIT(A) ARE DISTINGUISHABLE AND NOT APPLICABLE TO TH E FACTS OF THE PRESENT CASE. WE THEREFORE QUASH THE ASSESSMENT AND THE GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 7.2 THE HON'BLE SUPREME COURT IN THE CASE OF KAPURC HAND SHRIMAL VS. CIT REPORTED IN 131 ITR 451 HAS HELD THAT AN APPELL ATE AUTHORITY HAS THE JURISDICTION AS WELL AS THE DUTY TO CORRECT ALL ERR ORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE IF NECESSARY APPROPRIAT E DIRECTIONS TO THE AUTHORITY AGAINST WHOSE DIRECTION THE APPEAL IS PRE FERRED TO DISPOSE OF THE WHOLE OR ANY PART OF THE MATTER AFRESH UNLESS FORB IDDEN FROM DOING SO BY NATURE. IN LIGHT OF THE ABOVE THE ASSESSING OFFIC ER IS AT LIBERTY TO INITIATE FRESH PROCEEDINGS OR TO CONTINUE THE PROCEEDINGS FR OM WHERE THE IRREGULARITIES INTERVENED IF OTHERWISE PERMISSIBLE UNDER THE LAW. ITA NOS.3538 & 3539/MUM/10 - 14 - 8. SINCE THE ASSESSEE SUCCEEDS ON THIS PRELIMINARY GROUND WE ARE NOT ADJUDICATING THE OTHER GROUNDS AS WELL AS THE ADDIT IONAL GROUNDS RAISED BY THE ASSESSEE AS THESE BECOME ACADEMIC IN NATURE. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ITA 3539/MUM/2010 10. THE ASSESSEE IN THE GROUNDS OF APPEAL HAS CHALL ENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.63 081 MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS BEING PROPORT IONAL ADDITIONAL INTEREST ON REC BONDS. 11. AFTER HEARING BOTH THE SIDES WE FIND THE ASSES SEE HAD CLAIMED EXEMPTION U/S.54EC AGAINST THE LONG TERM CAPITAL GA INS DURING THE ASSESSMENT YEAR 2004-05 BEING INVESTMENTS MADE IN R EC BONDS AND NABARD BONDS. SINCE THE ENTIRE INVESTMENT WAS MADE OUT OF THE FUNDS BELONGING TO THE ASSESSEE THE ASSESSING OFFICER TR EATED THE INTEREST FROM ENTIRE INVESTMENT OF RS.4 94 70 000 AS INCOME OF TH E ASSESSEE. SINCE THE ASSESSEE HAS OFFERED TO TAX ONLY INTEREST INCOME OF RS.2 52 324 CORRESPONDING TO REC BONDS OF RS.3 95 76 020 IN THE REVISED RETURN THE ITA NOS.3538 & 3539/MUM/10 - 15 - ASSESSING OFFICER BROUGHT TO TAX THE BALANCE AMOUNT OF RS.63 081 ON PROTECTIVE BASIS WHICH WAS CONFIRMED BY THE CIT(A). BOTH THE PARTIES FAIRLY AGREED THAT THE ISSUE RAISED IS CONSEQUENTIA L TO THE OUTCOME OF THE APPEAL IN ITA NO.3538/MUM/2010 FOR THE ASSESSMENT Y EAR 2004-05. WE HAVE ALREADY DECIDED THE APPEAL AND HAVE TREATED TH E ASSESSMENT AS NULLITY. IN VIEW OF THE SAME THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 12. IN THE RESULT THE BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.07.2011. SD/- SD/- (D. MANMOHAN) (R.K. PANDA) VICE PRESIDENT ACCO UNTANT MEMBER MUMBAI DT.20-07-2011. *GPR TRUE COPY ITA NOS.3538 & 3539/MUM/10 - 16 - COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE ITAT MUMBAI. 6. GUARD COPY. BY ORDER DY./ASST.REGISTRAR ITAT MUMBAI