Sh. Yoginder Singh, Panchkula v. ACIT, Panchkula

ITA 373/CHANDI/2015 | 2006-2007
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 37321514 RSA 2015
Assessee PAN AKOPS2088N
Bench Chandigarh
Appeal Number ITA 373/CHANDI/2015
Duration Of Justice 1 year(s) 6 month(s) 7 day(s)
Appellant Sh. Yoginder Singh, Panchkula
Respondent ACIT, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 21-10-2016
Date Of Final Hearing 14-09-2016
Next Hearing Date 14-09-2016
Assessment Year 2006-2007
Appeal Filed On 13-04-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA ACCOUNTANT MEMBER ITA NO. 373/CHD/2015 ASSESSMENT YEAR: 2006-07 SHRI YOGINDER SINGH VS THE ACIT THROUGH L/H SHRI VIRENDER SINGH PANCHKULA CIRCLE VILLAGE - KHANGESRA PANCHKULA. P.O. KOT PANCHKULA. PAN: AKOPS2088N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.C.AGGARWAL RESPONDENT BY : SHRI SUSHIL KUMAR CIT-DR DATE OF HEARING : 04.10.2016 DATE OF PRONOUNCEMENT : 21.10.2016 O R D E R PER BHAVNESH SAINI JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PANCHKULA DATED 27.02.2015 FOR ASSESSMENT YEAR 2006-07. 2. IN THIS APPEAL THE ASSESSEE CHALLENGED THE ORDE R OF LD. CIT(APPEALS) IN CONFIRMING THAT THE NOTICE U NDER SECTION 148 AND ALSO ASSESSMENT ORDER UNDER SECTION 143(3)/147 OF THE INCOME TAX ACT ARE VALID. THE ASSESSEE ALSO CHALLENGED THE IMPUGNED ORDERS BECAUS E THE SAME HAVE BEEN PASSED WITHOUT PROVIDING PROPER 2 OPPORTUNITY OF BEING HEARD. IT IS THEREFORE PRAY ED THAT IMPUGNED ORDERS MAY BE QUASHED. THE ASSESSEE FURTH ER CHALLENGED UPHOLDING OF ADDITION OF RS. 7 24 46 572 /- ON ACCOUNT OF ENHANCED COMPENSATION AND ASSESSING T HE SAME AS CAPITAL GAIN AND ALSO NOT GRANTING THE EXEMPTION UNDER SECTION 10(37) OF THE ACT. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RET URN OF INCOME ON 31.07.2006 DECLARING TOTAL INCOME OF RS. 42 96 825/-. THE RETURN WAS PROCESSED UNDER SECTIO N 143(1) OF THE ACT ON 26.10.2007. LATER PROCEEDING S UNDER SECTION 147 WERE INITIATED BY ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 25.03.2013 BY RECORDING FOLLOWING REASONS WHICH WERE SERVED THROU GH SPEED POST : SHRI YOGINDER SINGH RESIDENT OF KHANGESRA POST OFFICE KOT DISTRICT PANCHKULA RECEIVED ENHANCED COMPENSATION FROM LAO ON 11.10.2005 AT RS. 7 24 46 572/- AND INTEREST ON ENHANCED COMPENSATION OF RS. 7 53 20 932/- ON 08.04.2006. INTEREST INCOME HAS BEEN ASSESSED VIDE THIS OFFICE ORDER DATED 30.12.2009 UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2007-08 AND THE CAPITAL GAINS ACCRUED ON ACCOUNT OF ENHANCED COMPENSATION HAS ESCAPED ASSESSMENT AS THE LAND ACQUIRED HAS BEEN TREATED NON-CULTIVABLE LAND BY THIS OFFICE. 3 ACCORDING TO THE ASSESSING OFFICER THE NOTICE UNDE R SECTION 143(2) WAS ISSUED ON 25.09.2013 AND WAS SER VED UPON ASSESSEE ON THE SAME DAY. THE ASSESSEE FILED REPLY DATED 16.01.2014 STATING NOTICE UNDER SECTION 143(2) IS TIME BARRED. IN RESPONSE TO THE FINAL SH OW CAUSE NOTICE SHRI NEERAJ JAIN C.A. ATTENDED THE PROCEEDINGS AND SUBMITTED THAT NO NOTICE HAVE BEEN SERVED UNDER SECTION 148 FOR ASSESSMENT YEAR UNDER APPEAL. THE ASSESSING OFFICER DID NOT ACCEPT CONTE NTION OF THE ASSESSEE BECAUSE NOTICES AND QUESTIONNAIRE W ERE ISSUED AND SERVED BY SPEED POST AND FINAL SHOW CAUS E SERVED THROUGH AFFIXTURE. THE ASSESSING OFFICER COMPUTED THE INCOME OF THE ASSESSEE BY MAKING ADDIT ION ON ACCOUNT OF CAPITAL GAINS IN A SUM OF RS. 7.24 CR AND PASSED THE ASSESSMENT ORDER UNDER SECTION 143(3)/14 7 OF THE ACT DATED 28.02.2014 IN THE NAME OF ASSESSEE I.E SHRI YOGINDER SINGH. 4. THE ASSESSEE CHALLENGED THE INITIATION OF THE RE - ASSESSMENT PROCEEDINGS AS WELL AS ADDITION ON MERIT BEFORE LD. CIT(APPEALS) ON VARIOUS GROUNDS WHICH AR E REPRODUCED IN THE IMPUGNED ORDER IN WHICH THE ASSES SEE BRIEFLY SUBMITTED THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING ASSESSMENT WHERE NOTICE UNDER SECTION 148 HAS NOT BEEN SERVED UPON ASSESSEE THEREFORE ASSESSMENT ORDER IS INVALID AND BE QUASH ED. THE CLAIM OF THE ASSESSING OFFICER THAT NOTICE UNDE R SECTION 148 DATED ON 25.03.2013 WAS ISSUED AND SER VED 4 UPON ASSESSEE IS NOT JUSTIFIED AS ASSESSEE EXPIRED ON 08.04.2008. THE ASSESSING OFFICER IS NOT JUSTIFIED IN CLAIMING THAT NOTICE UNDER SECTION 148 OF THE ACT W AS SERVED UPON ASSESSEE IN THE ABSENCE OF ANY PROOF OF SERVICE OF SUCH NOTICE. THE ASSESSING OFFICER IS N OT JUSTIFIED IN PASSING THE ASSESSMENT ORDER IN THE NA ME OF THE DECEASED WITHOUT BRINGING ON RECORD ALL THE LEG AL HEIRS OF DECEASED ASSESSEE SHRI YOGINDER SINGH. TH E ASSESSMENT ORDER PASSED IN THE NAME OF ASSESSEE SHR I YOGINDER SINGH WHO HAD EXPIRED ON 08.04.2008 THEREFORE ASSESSMENT ORDER PASSED IN THE NAME OF DECEASED ASSESSEE IS INVALID. THE ADDITION ON MERI T WAS ALSO CHALLENGED. 5. THE LD. CIT(APPEALS) CONSIDERED ALL THE SUBMISSIONS OF THE ASSESSEE IN DETAIL AND NOTED THA T THE NOTICE UNDER SECTION 148 DATED 25.03.2013 WAS ISSUE D IN THE NAME OF SHRI YOGINDER SINGH ( THROUGH LEGA L HEIRS). THE NOTICE UNDER SECTION 148 OF THE ACT RE TURNED BACK ON 03.04.2013 WITH THE REMARKS THAT RETURNED TO SENDER THE PERSON NAMED HAS ALREADY EXPIRED BEFOR E 6- 7 YEARS THEREFORE RETURNED BACK TO THE SENDER. THE LD. CIT(APPEALS) NOTED THAT THEREAFTER STATUTORY NOTIC ES WERE SENT FOR COMPLETION OF ASSESSMENT WHICH HAVE B EEN SERVED ON THE SAME DAY AS WELL AS THROUGH AFFIXTURE . THE LD. CIT(APPEALS) CONSIDERED THE SERVICE OF THE NOTICE IN THE MODE PRESCRIBED UNDER SECTION 282 OF THE ACT AND DEEMED VALIDITY OF CERTAIN NOTICES AS PER SECTION 2 92BB 5 OF THE ACT. THE LD. CIT(APPEALS) RELIED UPON CERTA IN DECISIONS IN SUPPORT OF HIS FINDINGS THAT NOTICE UN DER SECTION 148 HAVE BEEN DULY SERVED THROUGH LEGAL HEI RS. IT WAS ALSO NOTED THAT COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 WAS ALREADY SERVED UPON THE LEGAL HEIRS. THIS SHOWS THAT LEGAL HEIRS WERE WELL AWARE ABOUT THE ACTION TO BE TAKEN FOR ASSESSMENT YEAR UN DER APPEAL I.E. 2006-07 AND APPARENTLY THE NOTICE WAS REFUSED TO BE ACCEPTED BY THE LEGAL HEIRS WHICH WAS RETURNED WITH REMARKS. THE LD. CIT(APPEALS) THERE FORE HELD THAT NOTICE UNDER SECTION 148 HAVE BEEN VALIDL Y ISSUED AND SERVED UPON ASSESSEE WITHIN TIME. 5(I) THE LD. CIT(APPEALS) ON MERIT FOUND THAT IN ASSESSMENT YEAR 2007-08 THE ASSESSING OFFICER HELD THAT THE ENHANCED COMPENSATION IS TAXABLE. IT WAS ALSO NOTED THAT LD. CIT(APPEALS) IN ASSESSMENT YEAR 2007 -08 HAS HELD THAT THE ENHANCED COMPENSATION RECEIVED BY THE ASSESSEE IS TAXABLE AND DISMISSED THE APPEAL OF THE ASSESSEE. THE LD. CIT(APPEALS) FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2007-08 CONFIRMED THE ADDITION ON MERIT AS WELL. HE HAS ALSO CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN DISALLOWING EXEMPTION UNDER SE CTION 10(37) OF THE ACT FOLLOWING HIS ORDER FOR ASSESSMEN T YEAR 2007-08. THE APPEAL OF THE ASSESSEE ON THESE GROUN DS WAS ACCORDINGLY DISMISSED. 6 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS REFERRED TO PB-10 WHICH IS DEATH CERTIFICATE OF THE ASSESSEE PROVING THAT ASSESSEE EXPIRED ON 08.04.200 8. PB-13 IS COPY OF THE NOTICE UNDER SECTION 148 DATED 25.03.2013 IN THE NAME OF SHRI YOGINDER SINGH ( THROUGH LEGAL HEIRS) WHICH WAS RETURNED TO THE ASSESSING OFFICER WITH THE REMARKS THAT THE ADDRESS EE HAD ALREADY EXPIRED 6-7 YEARS BACK. COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 UNDER SECTION 143(3) DATED 30.12.2009 HAVE BEEN FILED AT PAGE B-2 OF THE PAPER BOOK WHICH IS IN THE NAME OF LEGAL HEIRS OF LATE SHRI YOGINDER SINGH IN WHICH THE ASSE SSING OFFICER HAS MENTIONED THAT THE ASSESSEE HAD DIED DU RING THE PENDENCY OF ASSESSMENT PROCEEDINGS AND AFTER INQUIRIES THE LEGAL HEIR OF DECEASED SHRI YOGINDER SINGH WERE BROUGHT ON RECORD NAMELY SMT. SUMITRA DEVI WI FE SHRI VIRENDER SINGH SON SHRI NARESH SINGH SON S HRI PRADEEP SINGH SON AND SMT. SUSHMA DEVI DAUGHTER. THE LD. COUNSEL FOR THE ASSESSEE THEREFORE SUBMIT TED THAT ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 1 48 OF THE ACT DATED 25.03.2013 ASSESSING OFFICER WAS AWA RE OF THE FACT THAT ASSESSEE HAD ALREADY EXPIRED ON 08.04.2008 AND HIS LEGAL HEIRS WERE ALREADY ON RECO RD. THEREFORE ASSESSING OFFICER SHOULD NOT HAVE PROCEE DED AGAINST DEAD PERSON AND SHOULD NOT HAVE ISSUED NOTI CE UNDER SECTION 148 OF THE ACT IN THE NAME OF DEAD 7 ASSESSEE BECAUSE NO NAME OF LEGAL HEIRS HAVE BEEN MENTIONED IN THE NOTICE UNDER SECTION 148. 6(I) PB-9 IS REPLY OF THE LEGAL HEIRS OF THE ASSE SSEE BEFORE ASSESSING OFFICER DATED 24.02.2016 IN WHICH ALSO IT WAS INTIMATED TO THE ASSESSING OFFICER THAT SHRI YOGINDER SINGH HAD ALREADY EXPIRED ON 08.04.2008. THE LD. COUNSEL FOR THE ASSESSEE THEREFORE SUBMITTED THAT NOTICE UNDER SECTION 148 ISSUED AGAINST DEAD PERSON IS INVALID AND WAS NEVER SERVED UPON THE DEAD PERSON O R UPON LEGAL HEIRS OF THE ASSESSEE. THERE IS NO QUES TION OF REFUSAL BY THE LEGAL HEIRS BECAUSE NO NAME OF LE GAL HEIRS HAVE BEEN MENTIONED IN THE NOTICE UNDER SECTI ON 148 OF THE ACT. NO PROPER OPPORTUNITY HAVE BEEN GI VEN TO THE LEGAL HEIRS OF THE ASSESSEE AND THERE IS NO SERVICE OF THE NOTICE UNDER SECTION 148. THE ASSESSMENT OR DER IS PASSED IN THE NAME OF DEAD PERSON THEREFORE ASSESSMENT ORDER IS INVALID AND NULLITY. THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT SERVICE OF VALID NO TICE UNDER SECTION 148 IS ESSENTIAL TO MAKE RE-ASSESSMEN T. IN THIS CASE NO NOTICE UNDER SECTION 148 OF THE AC T HAVE BEEN SERVED UPON ASSESSEE OR THE LEGAL HEIRS THEREF ORE IT IS INVALID. THUS THE VALID SERVICE OF THE NOTIC E ON ASSESSEE STRICTLY IN TERMS OF SECTION 148 READ WITH SECTION 282(1) OF THE ACT IS A JURISDICTIONAL REQUI REMENT. HE HAS FURTHER SUBMITTED THAT IT WAS A PRESUMPTION OF THE ASSESSING OFFICER/CIT(A) ABOUT SERVICE OF THE N OTICE WHICH IS WHOLLY ERRONEOUS AND ILLEGAL. THE ONUS IS UPON 8 REVENUE TO PROVE THAT ASSESSEE OR THE LEGAL HEIRS H AVE BEEN SERVED THE NOTICE UNDER SECTION 148 OF THE ACT . IN THE PRESENT CASE NOTICE UNDER SECTION 148 AND ALL SUBSEQUENT NOTICES UNDER SECTION 148(2) WERE ADDRES SED TO THE DECEASED ASSESSEE SHRI YOGINDER SINGH ( THRO UGH LEGAL HEIRS) WHICH PHRASE CANNOT ALTER THE FACT THA T THEY WERE ADDRESSED TO THE DECEASED ASSESSEE WHO EXPIRE D LONG BACK. THE ASSESSING OFFICER WAS AWARE FROM TH E RECORD THAT ASSESSEE SHRI YOGINDER SINGH WAS NOT LI VING THEREFORE HIS LEGAL HEIRS WERE TO BE BROUGHT ON REC ORD WHO HAVE ALREADY BEEN BROUGHT ON RECORD IN ASSESSME NT YEAR 2007-08. THEREFORE ALL THE NOTICES INCLUDIN G NOTICE UNDER SECTION 148 HAVE BEEN SENT TO THE DEAD PERSON THEREFORE NOTICE UNDER SECTION 148 OF THE ACT UPON A DEAD PERSON IS INVALID. 6(II) THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBM ITTED THAT NO VALID ASSESSMENT CAN BE MADE ON A DEAD PERS ON. ONCE THE ASSESSEE WAS DEAD NO VALID ASSESSMENT CAN BE MADE UPON HIM UNLESS PROCEEDINGS ARE INITIATED AGAI NST ALL THE REPRESENTATIVES ( LEGAL HEIRS OF THE ASSESS EE). SECTION 159 ALSO REQUIRES THAT ASSESSING OFFICER SH OULD IMPLEAD ALL THE LEGAL HEIRS AFTER THE DEATH OF THE ASSESSEE FOR CARRYING OUT FURTHER PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON FOLLOWING DECI SIONS: I) DECISION OF MADRAS HIGH COURT IN THE CASE OF CIT V M. HEMANATHAN 68 TAXMAN.COM.22 IN WHICH IT WAS HELD THAT 9 WHERE NOTICE ISSUED IN NAME OF DECEASED- ASSESSEE WAS SERVED UPON LEGAL HEIR WHO THEN PARTICIPATED IN PROCEEDINGS SUCH PROCEEDINGS WAS A NULLITY BEING INITIATED AGAINST A DEAD PERSON. II) DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT V SHITAL PRASAD KHARAG PRASAD 147 TAXMAN 441 IN WHICH IT WAS HELD THAT NOTICE UNDER SECTION 148 IS A JURISDICTIONAL NOTICE AND IS NOT CURABLE UNDER SECTION 292B IF IT WAS NOT SERVED ACCORDING TO PROVISIONS OF THE ACT IT WAS ALSO HELD THAT IT IS SETTLED LAW THAT SERVING OF VALID NOTICE UNDER SECTION 148 IS THE FOUNDATION FOR INITIATION OF RE-ASSESSMENT PROCEEDINGS AND A CONDITION PRECEDENT FOR VALIDITY OF NOTICE. III) ORDER OF ITAT AGRA BENCH (TM) IN THE CASE OF ITO V SIKANDER LAL JAIN 45 SOT 113 IN WHICH IT WAS HELD THAT NOTICE ISSUED IN THE NAME OF A DEAD PERSON WAS INVALID. IT WAS ALSO HELD THAT ASSESSMENT ORDER PASSED IN VIEW OF THE ISSUE OF NOTICE ON DEAD PERSON WAS VOID AND COMMISSIONER (APPEALS) WAS CORRECT IN LAW AND IN THE FACTS OF THE INSTANT CASE HOLDING THE ASSESSMENT ORDER AS VOID. IV) ORDER OF ITAT BOMBAY BENCH IN THE CASE OF MRS. JERBANOO N. WADIA VS ACIT 36 ITD 185 IN WHICH IT WAS HELD THAT RE-ASSESSMENT NOTICE ISSUED IN THE NAME OF THE ASSESSEE AFTER HIS DEATH IS ILLEGAL AND VOID. 10 V) DECISION OF MADHYA PRADESH HIGH COURT IN THE CASE OF SHEIKH ABDUL KADAR V ITO 34 ITR 451 IN WHICH IT WAS HELD THAT THE NOTICES AND ALL THE COMMUNICATIONS WERE ADDRESSED TO S WHO ADMITTEDLY WAS DEAD AT THAT TIME AND HAD BEEN SO DEAD FOR A LONG TIME. ITO KNEW FROM RECORDS OF HIS OWN OFFICE THAT S WAS NOT LIVING AND HE ALSO KNEW WHO HIS LEGAL REPRESENTATIVES WERE BECAUSE THE LEGAL REPRESENTATIVES HAD BEEN ASSESSED IN SUBSEQUENT YEARS TAKING INTO ACCOUNT THE ASSETS OF DECEASED S. IN THESE CIRCUMSTANCES IT WAS INCUMBENT UPON THE ITO TO CAUSE THE NOTICE TO BE ISSUED TO LEGAL REPRESENTATIVES OF S. SINCE ALL NOTICES WERE ISSUED IN THE NAME OF DEAD PERSON THEREFORE ITO WAS PROHIBITED FROM MAKING ASSESSMENT ON THE STRENGTH OF THE NOTICE WHICH HE HAD ISSUED. PETITION WAS THEREFORE ALLOWED. VI) DECISION OF DELHI HIGH COURT IN THE CASE OF VIPIN WALIA V ITO 67 TAXMAN.COM 56 IN WHICH IT WAS HELD WHERE DEPARTMENT INTENDED TO PROCEED UNDER SECTION 147 AGAINST ASSESSEE WHEN HE WAS ALREADY DEAD IT COULD HAVE BEEN DONE SO BY ISSUING A NOTICE TO LEGAL REPRESENTATIVE OF ASSESSEE WITHIN PERIOD OF LIMITATION FOR ISSUANCE OF NOTICE. VII) DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF LAL CHAND AGGARWAL V CIT AGRA 68 TAXMAN.COM 102 IN WHICH IT WAS HELD THAT WHERE NOTICES ISSUED TO ASSESSEE FOR RE- ASSESSMENT FOR BOGUS SALE OF SHARES WERE INVALID RE-ASSESSMENT WAS NOT JUSTIFIED. 11 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT THE LD. CIT(APPEALS) RELIED UPON ORDER OF ITAT AGRA BENCH IN THE CASE OF ITO VS LAL CHAND AGGARWAL 18 TAXMAN.COM 125 IN SUPPORT OF HIS FINDINGS WHICH HAV E BEEN OVERRULED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE ABOVE CASE OF LAL CHAND AGGARWAL VS CIT (SUPRA) . THE LD. COUNSEL FOR THE ASSESSEE THEREFORE THEREF ORE SUBMITTED THAT ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT AGAINST DEAD PERSON AND PASSING OF THE ASSESSME NT ORDER IN THE NAME OF DEAD PERSON IS INVALID AND VOI D SAME MAY BE SET ASIDE AND QUASHED. 8. ON THE OTHER HAND LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSING OFFI CER REOPENED THE ASSESSMENT ON THE BASIS OF FINDINGS GI VEN IN ASSESSMENT YEAR 2007-08. THE LRS OF THE ASSESSE E WERE AWARE OF THE FACT AND TAXABILITY OF THE INTERE ST AND ENHANCEMENT OF COMPENSATION. NOTICES WERE ISSUED UNDER SECTION 148 AND 143(2) ETC. THROUGH LEGAL HEI RS WHICH HAVE BEEN REFUSED TO ACCEPT BY THE LEGAL HEIR S. REFUSAL WOULD AMOUNT TO ACCEPTANCE OF THE NOTICE AS PER LAW. HE HAS SUBMITTED THAT IF NAME OF LRS ARE NOT MENTIONED IN THE ASSESSMENT ORDER IT IS ONLY IRREGULARITY AND RELIED UPON DECISION OF HON'BLE SU PREME COURT IN THE CASE OF CIT V JAI PARKASH SINGH 219 IT R 737 IN WHICH IT WAS HELD THAT NON SERVICE OF NOTICE UNDER SECTION 143(2) AGAINST 9 OUT OF 10 LEGAL REPRESENTATIVES OF THE DECEASED DID NOT INVALIDATE THE 12 ASSESSMENT ORDER OF THE ASSESSING OFFICER AND THAT AT THE BEST IT WAS AN IRREGULARITY. LD. DR ALSO RELIED UPON DECISION OF THE GUJRAT HIGH COURT IN THE CASE OF AT ULBHAI HIRALAL SHAH VS DCIT 73 TAXMAN.COM 320 (GUJRAT) IN WHICH IT WAS HELD AS UNDER : WHERE ASSESSING OFFICER HAD REOPENED ASSESSMENT OF ASSESSEE AND SENT NOTICE TO HIM THROUGH POSTAL DEPA RTMENT AT ADDRESS CONTAINED IN HIS PAN CARD WHICH WAS RETURN ED BACK WITH REMARK 'LEFT AND ASSESSEE CHALLENGED REOPENIN G OF ASSESSMENT CONTENDING THAT REMARK 'LEFT' WAS TOTALLY I NCORRECT SINCE ASSESSEE HAD NOT JOINED POSTAL DEPARTMENT TO QUESTION WHY REMARK 'LEFT' WAS MADE ONLY ON GROUND OF NON SER VICE OF NOTICE REASSESSMENT PROCEEDINGS COULD NOT BE TERMINATED WHICH HAVE BEEN CONFIRMED BY HON'BLE SUPREME COURT IN THE CASE OF ATULBHAI HIRALALSHAH VS DCIT 73 TAXMAN.COM 325. 9. THE LD. DR ALSO RELIED UPON DECISION OF MADRAS HIGH COURT IN THE CASE OF AREVA T&D INDIA LTD. 165 TAXMAN 123 IN WHICH IT WAS HELD THAT WHERE RE- ASSESSMENT ORDER WAS PASSED BY ASSESSING OFFICER WITHOUT CONSIDERING OBJECTIONS OF THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 148 AND WITHOUT GI VING STATUTORY NOTICE UNDER SECTION 143(2) IT AMOUNTED TO NOTHING BUT PROCEDURAL IRREGULARITIES AND HENCE SA ME WOULD NOT MAKE RE-ASSESSMENT A NULLITY IN LAW . THE LD. DR ALSO RELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF V.R.A. COTTON MIL LS (P) LTD. V UOI CWP NO. 18193 OF 2011 DATED 27.09.20 11 13 IN WHICH THE ISSUE OF SERVICE OF NOTICE UNDER SECTI ON 143(2) WAS CONSIDERED AND IT WAS HELD THAT THE EXPRESSION SERVE MEANS THE DATE OF ISSUE OF NOTIC E. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. I T IS NOT IN DISPUTE THAT ASSESSEE HAD EXPIRED ON 08.04.2 008 COPY OF THE DEATH CERTIFICATE IS ALSO PLACED ON REC ORD. IT IS ALSO ADMITTED FACT THAT REASONS FOR RE-OPENIN G OF THE ASSESSMENT IN ASSESSMENT YEAR UNDER APPEAL 2006 - 07 WERE RECORDED ON THE BASIS OF ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2007-08 UNDER SECTION 143(3) MAKING ADDITION ON ACCOUNT OF CAPITAL GAINS ON ACCOUNT OF INTEREST ON ENHANCED COMPENSATION. COPY OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 DA TED 30.12.2009 IS ALSO PLACED ON RECORD WHICH HAVE NOT BEEN DISPUTED BY THE LD. DR. IN THIS ASSESSMENT ORDER ASSESSING OFFICER HAS SPECIFICALLY MENTIONED THAT ASSESSEE SHRI YOGINDER SINGH HAD DIED DURING THE PENDENCY OF THE ASSESSMENT PROCEEDINGS AND INSPECTO R OF HIS OFFICE WAS DIRECTED TO MAKE NECESSARY INQUIR IES FOR SUBMITTING REPORTS REGARDING LEGAL HEIRS OF LAT E SHRI YOGINDER SINGH SO THAT THEY CAN BE IMPLEADED AS REPRESENTATIVES IN PENDING ASSESSMENT PROCEEDINGS. ON THE BASIS OF THE REPORT OF THE INSPECTOR IT WAS BR OUGHT ON RECORD THAT LEGAL HEIRS OF LATE SHRI YOGINDER SI NGH ARE SMT. SUMITRA DEVI (WIFE) SHRI VIRENDER SINGH S HRI NARESH SINGH SHRI PRADEEP SINGH (SONS) AND SMT. SUSHMA DEVI DAUGHTER. THE ASSESSING OFFICER PASSED THE 14 ASSESSMENT ORDER IN THE NAMES OF LEGAL HEIRS OF LAT E SHRI YOGINDER SINGH. IT IS THEREFORE CLEAR THAT THE R EVENUE DEPARTMENT AND THE ASSESSING OFFICER WERE AWARE OF THE FACT THAT SHRI YOGINDER SINGH HAD ALREADY EXPIRED O N 08.04.2008 AND HIS LEGAL HEIRS HAVE BEEN BROUGHT ON RECORD. AFTER PASSING OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08 ON 30.12.2009 ASSESSING OFFICER ON THESE BASIS REOPENED THE ASSESSMENT FOR ASSESSMENT YEAR UNDER APPEAL I.E. 2006-07 BY RECORD ING REASONS UNDER SECTION 148 OF THE ACT AND ISSUED THE NOTICE UNDER SECTION 148 ON 25.03.2013 COPY OF WHI CH IS PLACED ON RECORD WHICH IS ISSUED IN THE NAME OF DECEASED ASSESSEE SHRI YOGINDER SINGH (ASSESSEE) THROUGH LEGAL HEIRS THIS NOTICE IS ISSUED IN THE NAME OF DEAD PERSON WITHOUT MENTIONING THE NAMES OF HIS LEGAL HEIRS WHICH WERE WITHIN THE KNOWLEDGE OF THE ASSESSING OFFICER AS PER ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08. NO REASONS HAVE BEEN EXPLAINED AS TO WHY LEGAL HEIRS OF THE DECEASED ASS ESSEE WERE NOT BROUGHT ON RECORD AND WHY NAMES OF LEGAL H EIRS WERE NOT MENTIONED IN THE NOTICE UNDER SECTION 148 OF THE ACT. IT IS ALSO CLEAR THAT THE NOTICE UNDER SE CTION 148 WAS NOT ISSUED IN THE NAMES OF LEGAL HEIRS OF T HE ASSESSEE. THE NOTICE UNDER SECTION 148 HAVE BEEN ISSUED ONLY IN THE NAME OF DECEASED ASSESSEE I.E. T HE DEAD PERSON. 11. HON'BLE DELHI HIGH COURT IN THE CASE OF R.C .JAIN 15 (DECD) VS CIT & OTHERS 273 ITR 384 HELD AS UNDER : HELD THAT IT WAS KNOWN TO THE RESPONDENTS THAT RCJ HAD EXPIRED IN THE MONTH OF NOVEMBER 2001 AND YET NO PROPER ACTION WAS TAKEN AND PROCEEDINGS WERE COMMENCED AGAINST A DEAD PERSON. ON THE BASIS OF THIS THE ASSESSMENT ORDER CAME TO BE MADE ON FEBRUARY 28 2003 UNDER SECTION 158BC AND SECTION 142 OF THE ACT 1961. THIS WAS MADE WITHOUT WAITING FOR THE PERIOD GIVEN TO THE ASSESSEE FOR FILING THE RETURN. IN VIEW OF THIS AS THE PRINCIPLES OF NATURAL JUSTICE AS WELL AS THE PROVISIONS CONTAINED IN THE ACT HAD BEEN VIOLATED THERE WAS NO OPTION BUT TO QUASH THE ASSESSMENT ORDER. 12. IN THIS CASE HON'BLE HIGH COURT OBSERVED TH AT NO EXPLANATION WAS RENDERED WHAT-SO-EVER AS TO WHY THE PROCEEDINGS WERE COMMENDED AGAINST DEAD PERSON AND DIRECTED THE CIT TO RENDER EXPLANATION IN THIS BEHA LF WITHIN A PERIOD OF 15 DAYS. 13. HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS SMT. SANTOSH RANI 219 ITR 301 HELD AS UNDER : HELD THAT A PERUSAL OF THE RECORDS SHOWED THAT THE ORIGINAL APPEAL WAS FILED AGAINST THE DEAD PERSON N. NO APPEAL LIES AGAINST A DEAD PERSON. THE APPEAL WAS INCOMPETENT AND A NULLITY AND THE TRIBUNAL WAS RIGHT IN DISMISSING IT. 16 14. THE DECISIONS CITED BY LD. COUNSEL FOR THE ASSE SSEE ALSO SUPPORT THE CASE OF THE ASSESSEE THAT WHEN NOT ICE UNDER SECTION 148 HAVE BEEN ISSUED ON DEAD PERSON IT WOULD BE INVALID VOID AND SHOULD BE CONSIDERED AS NULLITY. IT MAY ALSO BE NOTED HERE THAT DESPITE AB OVE FACTS IN KNOWLEDGE OF A.O. THE A.O. WAS FURTHER INTIMATED VIDE REPLY DATED 24.02.2014 BY THE LEGAL HEIRS OF THE ASSESSEE THAT THE ASSESSEE HAD ALREADY EXPIR ED ON 08.04.2008 ASSESSING OFFICER PROCEEDED TO PASS IMPUGNED RE-ASSESSMENT ORDER DATED 28.02.2014 UNDER SECTION 143(3)/147 OF THE ACT IN THE NAME OF DECEAS ED ASSESSEE SHRI YOGINDER SINGH. THE ASSESSING OFFIC ER THEREFORE PASSED THE ASSESSMENT ORDER IN THE NAME OF DEAD PERSON I.E. SHRI YOGINDER SINGH WITHOUT EVEN MENTIONING THE NAME OF LEGAL HEIRS OF THE ASSESSEE IN THE ASSESSMENT ORDER. THE DECISIONS RELIED UPON BY LD. COUNSEL FOR THE ASSESSEE THEREFORE CLEARLY APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESS ING OFFICER ISSUED INVALID NOTICE UNDER SECTION 148 OF THE ACT AS WELL AS PASSED THE ASSESSMENT ORDER IN THE N AME OF DEAD PERSON WHICH ARE NOT MERELY IRREGULARITY BU T ILLEGALITY COMMITTED BY ASSESSING OFFICER WHICH IS NOT CURABLE. SUCH RE-ASSESSMENT PROCEEDINGS ARE NULLIT Y BEING INITIATED AGAINST A DEAD PERSON. 15. THE LD. DR CONTENDED THAT LEGAL HEIRS WERE AWAR E OF THE FACTS AND TAXABILITY OF INCOME ON ACCOUNT OF CAPITAL GAINS THEREFORE WHEN NOTICE UNDER SECTION 148 17 WAS ISSUED IT WAS REFUSED TO ACCEPT BY THE LEGAL H EIRS. THE CONTENTION OF LD. DR IS NOT TENABLE BECAUSE NO NOTICE UNDER SECTION 148 WAS ISSUED IN THE NAMES OF LEGAL HEIRS. THE NOTICE UNDER SECTION 148 WAS ISSU ED IN THE NAME OF SHRI YOGINDER SINGH I.E. THE DEAD PERSO N ( THROUGH LEGAL HEIRS) WITHOUT MENTIONING THE NAMES O F LEGAL HEIRS. THE ASSESSING OFFICER WAS WELL AWARE O F THE FACT THAT ASSESSEE HAD ALREADY EXPIRED ON 08.04.200 8 THEREFORE HE SHOULD NOT HAVE ISSUED THE NOTICE DAT ED 25.03.2013 UNDER SECTION 148 OF THE ACT IN THE NAME OF DECEASED ASSESSEE. IT IS FOR THE ASSESSING OFFICER TO BRING THE LEGAL HEIRS ON RECORD IN ASSESSMENT ORDER IN APPEAL ON THE BASIS OF ASSESSMENT ORDER ALREADY PAS SED IN ASSESSMENT YEAR 2007-08 BECAUSE THE RE-OPENING IS DONE ON THE BASIS OF ASSESSMENT ORDER PASSED IN ASSESSMENT YEAR 2007-08 THEREFORE ASSESSING OFFICE R WAS AWARE OF THE FACT THAT THE PROCEEDINGS SHALL HA VE TO BE COMMENCED AGAINST THE LEGAL HEIRS ONLY. THE ASSESSING OFFICER CANNOT LEAVE IT TO THE POSTAL AUTHORITIES TO VERIFY THE NAMES OF THE LEGAL HEIRS OF THE ASSESSEE WHILE SERVING THE NOTICE UPON THE DEAD PER SON. WHEN NO NOTICE HAVE BEEN ISSUED UNDER SECTION 148 I N THE NAMES OF LRS OF THE DECEASED ASSESSEE THEREFOR E THERE IS NO QUESTION OF REFUSAL TO ACCEPT SUCH NOTI CE UNDER SECTION 148 BY THE LEGAL HEIRS. IT IS PRESUM PTION OF THE LD. CIT(APPEALS) ONLY THAT NOTICE UNDER SECT ION 148 HAVE BEEN REFUSED TO ACCEPT BY THE LEGAL HEIRS. THE LD. DR ALSO CONTENDED THAT WHEN THE NAMES OF LEGAL 18 HEIRS ARE NOT MENTIONED IN THE NOTICE AND RE-ASSESS MENT ORDER IT IS MERELY AN IRREGULARITY. NOTICE UNDER SECTION 148 IS JURISDICTIONAL NOTICE AND HAVE BEEN ISSUED I N THE NAME OF DEAD PERSON. IT IS THEREFORE CLEARLY AN ILLEGALITY AND NULLITY IN ISSUING NOTICE UNDER SECT ION 148 IN THE NAME OF DEAD PERSON. THE RE-ASSESSMENT ORDE R IS ALSO PASSED IN THE NAME OF DEAD PERSON THEREFORE RE- ASSESSMENT ORDER IS ILLEGAL INVALID NULL AND VOID AND SHALL HAVE TO BE DECLARED NULLITY. IT IS NOT A MER E IRREGULARITY. DECISIONS CITED BY LD. DR ARE THERE FORE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF TH E CASE. 16. THE LD. CIT(APPEALS) ALSO REFERRED TO PROVISION S OF SECTION 292BB OF THE ACT AND PROVISIONS OF SECTION 282 FOR SERVICE OF THE NOTICE. SINE NOTICE UNDER SECTI ON 148 OF THE ACT AND OTHER STATUTORY NOTICES HAVE BEEN IS SUED IN THE NAMES OF DEAD PERSON THERE IS NO QUESTION O F HAVING ANY IRREGULARITY IN THE SAME. FURTHER SECT ION 292BB PROHIBITS AN ASSESSEE IN ANY ENQUIRY OR PROCEEDINGS TO RAISE THE PLEA OF NON SERVICE UN-TI MELY SERVICE OR IMPROPER SERVICE OF NOTICE IF HE HAS PARTICIPATED IN THE ASSESSMENT OR RE-ASSESSMENT PROCEEDINGS AND SUCH OBJECTION HAS NOT BEEN RAISED BEFORE COMPLETION OF SUCH ASSESSMENT OR RE-ASSESSME NT PROCEEDINGS. THE NOTICE UNDER SECTION 148 AND OTHE RS WERE ISSUED IN THE NAME OF DEAD PERSON. THEREFORE THERE IS NO QUESTION OF APPLICABILITY OF SUCH PROVI SIONS 19 AGAINST THE ASSESSEE OR HIS LEGAL HEIRS. IT IS ALS O NOTED THAT THIS SECTION WAS INSERTED INTO THE INCOME TAX ACT BY FINANCE ACT 2008 W.E.F. 01.04.2008 AND THUS WI LL NOT BE APPLICABLE TO ASSESSMENT YEAR UNDER APPEAL I .E. 2006-07. ITAT DELHI (SB) IN THE CASE OF KUBER TOBA CCO PRODUCTS PVT. LTD. VS DCIT 28 SOT 292 HELD THAT SEC 292BB CANNOT BE CONSTRUED RETROSPECTIVELY AS THE SA ME HAVE BEEN MADE APPLICABLE BY THE STATUTE W.E.F. 01.04.2008 THEREFORE SECTION 292BB IS APPLICABLE T O ASSESSMENT YEAR 2008-09 AND SUBSEQUENT ASSESSMENT YEARS. THEREFORE FINDINGS OF LD. CIT(APPEALS) CANNOT SUSTAIN IN LAW. 16(I) THE LD. CIT(A) RELIED UPON ORDER OF ITAT AG RA BENCH IN THE CASE OF LAL CHAND AGGARWAL (SUPRA) WHI CH HAVE BEEN HELD OVER-RULED BY THE HON'BLE ALLAHABAD HIGH COURT. THE LD. CIT (A) ALSO RELIED UPON CERTAIN DEC ISIONS IN SUPPORT OF HIS FINDINGS BUT THESE DECISIONS ARE CLEARLY DISTINGUISHABLE ON FACTS AND CIRCUMSTANCES OF THE C ASE AS NOTED ABOVE. THE DECISIONS CITED BY LD. COUNSEL FOR THE ASSESSEE CLEARLY APPLY TO THE CASE OF THE ASSES SEE TO HOLD THAT NOTICE UNDER SECTION 148 OF THE ACT WAS INVALID AND NO NOTICE UNDER SECTION 148 HAVE BEEN SERVED UPON THE ASSESSEE. THE ASSESSMENT ORDER AGAI NST DEAD PERSON IS NULLITY AND IS VOID. 17. CONSIDERING ABOVE DISCUSSION WE ARE OF THE VIE W THAT NOTICE UNDER SECTION 148 DATED 25.03.2013 ISSU ED IS INVALID AND HAVE NOT BEEN SERVED UPON DECEASED 20 ASSESSEE OR THE LEGAL HEIRS WHICH IS ESSENTIAL TO M AKE RE-ASSESSMENT ORDER. NO VALID RE-ASSESSMENT ORDER HAVE BEEN PASSED BEING IT IS PASSED IN THE NAME OF DEAD PERSON. IN THIS VIEW OF THE MATTER WE SET ASIDE A ND QUASH NOTICE UNDER SECTION 148 OF THE ACT AS WELL A S THE RE-ASSESSMENT ORDER UNDER SECTION 143(3)/147 DATED 28.02.2014. THE LD. CIT(APPEALS) WAS THEREFORE N OT JUSTIFIED IN UPHOLDING THE RE-OPENING OF THE ASSESS MENT IN THE MATTER. RESULTANTLY WE QUASH THE IMPUGNED ORDER AS WELL. 18. SINCE WE HAVE SET ASIDE AND QUASHED RE- ASSESSMENT ORDER THEREFORE ALL ADDITIONS MADE THE REIN WOULD STAND DELETED. THE ADDITION ON MERIT IS NOT DECIDED HERE BECAUSE IT IS LEFT FOR ACADEMIC DISCUS SION ONLY. 19. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 21 ST OCTOBER 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT DR ASSISTANT REGISTRAR ITAT/CHD