Veena Vij, New Delhi vs Assessee

Mrs. Veena Vij, vs Income Tax Officer, C/o S.C. Jain, Ward-25(1), 5A/12, Ansari Road, New Delhi. Daryaganj, New Delhi. (Appellant) (Respondent) Appellant by: Shri Ashwani Taneja, Adv. Respondent by: Shri J.P. Chandrakar, Sr. DR

ORDER

PER C.M. GARG, JUDICIAL MEMBER

This appeal has been preferred by Mrs. Veena Vij, w/o deceased assessee

Shri Ashok Kumar Vij against the order of the CIT(A)- XXIV, New Delhi dated

21.12.2011 in Appeal No.208/09-10 for AY 2002-03.

2. The appellant has raised following grounds in this appeal:-

"1. That order of authorities below is against law & facts of the case.

2. That assessment proceedings initiated on the basis of notice u/s 147 in the name of deceased Ashok Kumar Vij and without issuing any notice u/s 147 on the legal heir Smt. Veena Vij were bad in law and void-ab-initio and assessment framed

1 ITA No. 1299/D/2012 Asstt.Year: 2002-03

on such proceeding is invalid and void-ab-initio, and is therefore liable to be quashed.

3. That CIT (A) has erred in not appreciating that no notice u/s 147 could have been valid & legally issue in the name of the deceased person and assessment proceeding initiated with such notice were void-ab-initio and assessment resultant from such proceeding is also void-ab-initio and is liable to be quashed.

4. That assessment order lie held as void-ab-initio and be quashed. "

3. We have heard arguments of both the sides and carefully perused the

relevant material placed on record, inter alia brief synopsis/written arguments

submitted by the assessee, assessment order, impugned order and legal

propositions and citations relied by both the parties.

4. Ld. Counsel of the assessee submitted that the original return was filed on

09.09.2002 declaring an income of Rs.53,542 by Shri Ashok Kumar Vij as an

individual who died on 11.2.2006 as per death certificate available on page 3 of

the Paper Book. Ld. Counsel further submitted that income tax return for AY

2006-07 was filed on 3.10.2006 through legal heir Smt. Veena Vij, appellant of

this appeal and the fact was acknowledged to the AO that Shri Ashok Vij had

died much before the date of issue of notice u/s 148 of the Act. Ld. Counsel

further contended that notice u/s 148 of the Income Tax Act, 1961 dated

24.3.2009 was issued in the name of deceased assessee Shri Ashok Kumar Vij

and in response to the said notice, reply dated 14.5.2009 was filed under the

signatures of Shri S.C. Jain, CA informing that Shri Ashok Kumar Vij the 2 ITA No. 1299/D/2012 Asstt.Year: 2002-03

assessee had died on 11.2.2006 and original return filed by the assessee u/s 139

of the Act may be treated as the return filed in response to the notice u/s 148 of

the Act. Ld. counsel of the assessee placing reliance on the decision of Third

Member Bench of ITAT Agra in the case of ITO vs Sikander Lal Jain dated

8.12.2010 submitted that the assessment framed is bad in law and void ab initio

inasmuch as the notice u/s 148 of the Act dated 24.03.2009 was issued in the

name of Shri Ashok Kumar Vij who had died on 11.2.2006 and no notice u/s

148 of the Act has been issued in the name of deceased assessee's wife and

appellant Smt. Veena Vij, the legal heir of the deceased assessee. Ld. counsel

vehemently contended that as the notice u/s 148 of the Act itself was not valid,

hence, the order passed in pursuance of the said notice was also invalid and

deserves to be quashed.

5. Ld. Counsel further contended that the notice u/s 148 of the Act has to be

issued on the assessee i.e. individual assessee and not on a person who has

already expired on the date of issuance of notice and in this situation only the

legal heir can be regarded to be the individual. Ld. counsel has further drawn

our attention towards decision of Hon'ble Jurisdictional High Court of Delhi

in the case of Braham Prakash vs ITO 275 ITR 242(Del) and decision of

Hon'ble Allahabad High Court in the case of CIT vs Suresh Chandra

Jaiswal 325 ITR 563 (All).

3 ITA No. 1299/D/2012 Asstt.Year: 2002-03

6. Replying to the above, ld. DR fairly accepted that the assessee Shri

Ashok Kumar Vij had died on 11.2.2006 and notice u/s 148 of the Act dated

24.03.2009 was issued in the name of deceased assessee Shri Ashok Kumar Vij.

Ld. DR supporting the impugned order submitted that the benefit of the ratio of

the decisions relied by the appellant is not available for the assessee.

7. On careful consideration of above submissions of both the parties, we

note that Hon'ble Jurisdictional High Court of Delhi in the case of Braham

Prakash vs ITO (supra) has held that if notice u/s 148 of the Act is not served on

the original assessee or deemed assessee, then subsequent proceedings against

the deemed assessee were bad in law as there was breach of principles of natural

justice as well as mandatory provisions of section 148 of the Act. In the case of

CIT vs Suresh Chand Jaiswal (supra), speaking for the Allahabad High Court,

their lordships held that in case of notice served in the name of dead persons

and notice not served on the legal representative, then notice u/s 148 of the Act

is not valid.

8. We further find it appropriate to consider the decision of Third Member

Bench of ITAT in the case of ITO vs Sikandar Lal Jain (supra) dated 8.12.2010

wherein concurring with the decision of learned Judicial Member, on invalidity

of notice having been issued on the dead person, it was held that the notice u/s

148 of the Act issued to the deceased assessee is void ab initio. The relevant

operative para and conclusion of this order reads as under:- 4 ITA No. 1299/D/2012 Asstt.Year: 2002-03

"45. In view of my aforesaid discussion and the fact that the notice issued in the name of the dead person is invalid, I decide the questions referred to me as under:

(i) The assessment order passed, in view of the issue of notice on the dead person, is void and the CIT(Appeals), in my opinion, was correct in law and in facts holding the assessment order as void.

(ii) The CIT(A), in my opinion, was not correct in law in concluding that the notice u/s. 148 has not been served on proper person, as section 149 only requires the issuance of the notice within the limitation period and notice can be served on the proper persons subsequently.

46. Now, the matter shall go to the regular Bench.

P.K. Bansal, Accountant Member.-

1. There being difference of opinion between both the Members constituting the Bench, the matter was referred by Hon'ble President under section 255(4) of the Income-tax Act to the Third Member for adjudication on two questions. The learned Judicial Member had confirmed the order of CIT(A) quashing the reassessment proceedings both on the basis of invalidity of notice having been issued on the dead person and the service of notice on legal heir of assessee beyond the period of limitation, whereas the learned Accountant Member set aside the order of Id. CIT(A) holding the reassessment proceedings as valid having been initiated after issuing valid notice and its proper service. The Third Member vide his opinion dated 8-12-2010 concurred with the decision reached by learned Judicial Member on invalidity of notice having been issued on the dead person thereby rendering the reassessment proceedings as void and agreed with the learned Accountant Member on the validity of service of notice holding that the notice could be validly served beyond the time-limit prescribed under section 149 of the Income-tax Act.

2. Thus, on the basis of majority of opinion, the appeals of the revenue are dismissed."

9. Turning to the factual matrix of the present case, we are of the considered

view that admittedly Shri Ashok Kumar Vij died on 11.2.2006 and notice u/s

5 ITA No. 1299/D/2012 Asstt.Year: 2002-03

148 of the Act dated 24.3.2009 placed on page no. 4 of the Paper Book clearly

reveals that the same was issued in the name of Shri Ashok Kumar Vij and we

also note that in response to this notice, Shri S.C. Jain CA of the deceased

assessee filed a reply dated 14.5.2009 informing that the assessee had died on

11.2.2006. From paper Book page 5 of the assessee, we also note that income

tax return for AY 2006-07 was filed on 31.10.2006 through legal heir of the

deceased assessee Smt. Veena Vij, appellant of this case. In the light of above

facts and circumstances of the present case, we are inclined to hold that the case

is squarely covered in favour of the appellant by the decision of Third Member

ITAT Agra Bench in the case of ITO vs Sikander Lal Jain (supra) and we hold

that notice u/s 148 of the Act, issued in the name of deceased assessee who had

died prior to the issuance of notice and this fact was also acknowledged to the

AO by way of income tax return for AY 2006-07 filed on 31.10.2006 through

legal heir/wife of the deceased assessee Smt. Veena Vij, was invalid and void

ab initio and all subsequent proceedings conducted in pursuance to the said

notice are also invalid. Therefore, impugned order of the CIT(A) is set aside

and we hold that notice u/s 148 of the Act issued in the name of deceased

assessee and all subsequent proceedings thereto are invalid and we quash the

same.

10. In the result, the appeal of the appellant Smt. Veena Vij is hereby

allowed.

6 ITA No. 1299/D/2012 Asstt.Year: 2002-03

Order pronounced in the open court on 09.02.2015.

Sd/- Sd/-

( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER

DT. 9th FEBRUARY 2015 'GS'

Copy forwarded to:-

1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR

By Order

Asstt. Registrar

7