Banwari Lal Jhunjhunwala, L/R Of Late ... vs Assessee

आयकर अपील य अधीकरण, यायपीठ - "C" कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH: KOLKATA (सम )Before ी महावीर संह, यायीक सद य एवं/and ी शामीम याहया, लेखा सद य) [Before Shri Mahavir Singh, JM & Shri Shamim Yahya, AM]

आयकर अपील सं या / I.T.A No. 841/Kol/2010 नधॉरण वषॅ/Assessment Year: 1986-87

Banwarilal Jhunjhunwala Vs. Income-tax Officer, Wd-40(4), Kolkata L/R of Late Shyam Abtar Jhunjhunwala (PAN: ACZPJ0425B (अपीलाथ /Appellant) ( यथ /Respondent)

Date of hearing: 29.01.2015 Date of pronouncement: 29.01.2015

For the Appellant: Shri N. K. Poddar, Sr. Counsel For the Respondent: Shri Varinder Mehta, CIT, DR

आदेश /ORDER

Per Shri Mahavir Singh, JM :

This appeal by assessee is arising out of order of CIT(A)-XII, Kolkata in Appeal No. 555/XII/40(4)/07-08 dated 23.03.2010. Assessment was framed by ACIT, Circle-41, Kolkata u/s. 143(3)/251 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 1986-87 vide his order dated 26.03.2002.

2. At the outset, Ld. counsel for the assessee, Shri N.K. Poddar, Senior advocate stated that the assessee, Shri Shyam Abtar Jhunjhunwala expired on 02-05-2007 and appeal before CIT(A) was filed on 29-06-2006 by the assessee. When a query was put to Ld. Sr. advocate he stated that a death certificate was field before CIT(A) but he has not taken any step to bring the legal heirs of the assessee on record. On going through the cause title of the appellate order of CIT(A) dated. 23-03-2010 in appeal No.555/XII/40(4)/07-08 was passed on the death person, i.e., the assessee late Shri Shyam Abtar Jhunjhunwala. The order passed on the death person is a nullity and no order in the eyes of law. It is also a fact that there no laps on the part 2 ITA No.841/K/2010 Banwarilal Jhunjhunwala AY 1986-87

of the legal heirs of the assessee because the legal heirs informed CIT(A) that the assessee has expired and qua that a death certificate of Shri Shyam Abtar Jhunjhunwala was filed (the copy of which is also filed before us). Now only course left for us is that to set aside the order of CIT(A) and remit the issue back to the file of CIT(A) for bringing the legal heirs on record in term of Sec. 159 of the Act.

3. On this, Ld. counsel for the assessee, Shri N.K.Poddar, Sr. advocate drew our attention the order of the Tribunal passed in the first round of proceedings in ITA No.1920/Kol/2003 for A.Y. 1986-87 dated 04-10-2004 and particularly in para 23 and 24, wherein the Tribunal has directed the AO to decide the issue in the light of the following observations:-

"23. Having heard the rival submissions and perused the orders of both the lower authorities. We find that the ld. departmental representative relied on the order of the AO whereas, the ld. authorized representative of the assessee relied on the order of the CIT(A). We find that the demand draft of Rs.16,50,000 has been made from Current Account No.2669 of Central Bank of India, Esplanade Branch, Kolkada which stands in the name of Radha Vanijya Udyog; and whose proprietor as per the record of the bank was one 'Sri Madan Lal Gupta'. We find that during the course of assessment proceeding. The assessee vide his letter dated 19.03.02, in paragraph 3(e) and (f) had reproduced for the following to quote as under:-

'I, therefore, request you to summon the said the then Bank Branch Manager introducer of bank account, Sri Sudan Kumar Sen, the then Sub-Accountant of the Central Bank of India, Sh. Rama Shrey Pandit, the then peon of Sumitra Metal Private Limited and allow me an opportunity cross-examine him through my Pleader/Attorney/Authorize Representative. If you refer to the statement of Shri Tulsi Saasmal and Shri Gouri Shankar Jhunnjhunwala (by mistake written in your notice as Agarwal in place of Jhunjhunwala) you will not find any inclination whatsoever in the said statement, which support the view of the allegations contained in the said two CBI reports. An affidavit shown by me is enclosed to contradict the untrue statements received by me with your notice under reference.'

24. We find that this cross-examination, as requested by the assessee, was not carried out by the AO. We further find that the AO has not examined or verified about the existence of Sri M.L. Gupta of Gangtok in whose name the draft of Rs.5,000,000 was issued from the same No.2669 from the Bank at Sikkim where this amount was credited. Further, the AO has also not examined that the draft of Rs.5,00,000/-

bearing No.072343 dated 25.09.85 which was deposited in the A/c of M/s. Denzong Automobiles (P) Ltd. and the cheque drawn bearing No.975254 for Rs.5,00,000 deposited with SBI, Gangtok in A/c. No.P/550 was the very same amount which was deposited in the account of M/s. Denzong Automobiles(P) Ltd., or there was some other credit also in the account of M./s Denzoang Automobiles (P) Ltd. from which the said cheque could have been issued. In the interests of justice, and to decide the issue in its true and correct perspective, we are of the considered opinion that the matter is to be examined by examining the bank officials and other persons as requested by the 3 ITA No.841/K/2010 Banwarilal Jhunjhunwala AY 1986-87

assessee in paragraph 3(e) and (f) of his letter dated 19.03,92 addressed to the AO, which has been quoted above. The assessee is also to be allowed opportunity to cross- examine the said persons. We, therefore, se4t aside the orders of the CIT(A) and remand the matter back to the file of the AO for deciding the same in the light of the observations after examining the persons as stated in the letter dated 19.03.02 of the assessee addressed to the AO and then decide the issue as per law. The assessee shall be afforded reasonable opportunity of hearing. The assessee is also directed to appear suo motu before the AO within one month from the date of this order to obtain necessary instructions for the hearing of the case. We order accordingly."

In view of the above, Ld. counsel argued that the Authorities Below has not carried out the direction of the Tribunal in allowing cross-examination of the witnesses and also not provided with the certificated copies of the original documents of the bank account. Ld. counsel for the assessee urged the Bench to direct the CIT(A) to give effect to the direction of the Tribunal, noted above, and also to provide with certified copies of the original bank account.

4. When a query was put to Ld. CIT DR, Shri Varinder Mehta, he fairly conceded that yes the CIT(A) has to bring the legal heirs on record in terms of Sec. 159 of the Act. According to him, without bringing legal heirs on record, the matter cannot be proceeded with.

5. We have heard both the sides and gone through the facts and circumstances of the case. It is a fact that the assessee died on 02-05-2007 after filing of appeal but before disposal of the appeal. The CIT(A) passed the appellate order on 'death person' without bringing the legal heirs of assessee on record. Section 159 provides that for the purpose of making assessment or any proceedings taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from that stage. But for such continuity, the legal heirs of the deceased-assessee are to be brought on record. In the present case before us, the appellate order was passed on dead person, which is nullity. But to decide the issue, the order of CIT(A) is to be set aside and the issue is to be remitted back to the file of CIT(A) for fresh adjudication after bringing the legal heirs on record. The CIT(A) is directed accordingly. Needless to say, the CIT(A) will give effect to the directions of the ITAT reproduced above given in the first round of proceedings. All the principles of natural justice are to be followed while adjudicating the 4 ITA No.841/K/2010 Banwarilal Jhunjhunwala AY 1986-87

appeal of the assessee by the CIT(A). In term of the above, the matter is restored back to the file of CIT(A). Appeal of the assessee is allowed for statistical purposes.

6. In the result, appeal of assessee is allowed for statistical purposes.

7. Order is pronounced in the open court on 29-01-2015.

Sd/- Sd/- शामीम याहया, लेखा सद य महावीर संह, यायीक सद य (Shamim Yahya) (Mahavir Singh) Accountant Member Judicial Member

Dated : 29th January, 2015 व र ठ निज स चव Jd.(Sr.P.S.)

आदेश क त ल प अ े षतः- Copy of the order forwarded to:

1. अपीलाथ /APPELLANT - Shri Banwarilal Jhunjhunwala, L/R of Late Shyam Abtar Jhunjhunwala, P-336. CIT, Road, Scheme-VIM (Phool Bagan), Kolkata-700 054. 2 यथ /Respondent - ITO, Ward-40(4), Kolkata.

3. आयकर क मशनर (अपील)/ The CIT(A), Kolkata

4. आयकर क मशनर/ CIT Kolkata

5. वभा गय तनीधी / DR, Kolkata Benches, Kolkata स या पत त/True Copy, आदेशानुसार/ By order,

सहायक पंजीकार/Asstt. Registrar.