The Delhi bench of Income Tax Appellate Tribunal (ITAT) quashed the notice issued to dead person and held that section 292B of the Income Tax Act, 1961 should not be applicable if the assessee has not participated in the reassessment proceedings.
The income tax department issued notice of service under section 148 Income tax Act in the name of assessee Ghulam Nezami, who is a deceased person and was returned back on 01-04-2016.
When an appeal, filed before the Commissioner of Income Tax (Appeals), the first appellate bench upheld the continuation of proceedings under Section 147 of the Income Tax Act in the name of legal heirs and in the absence of a valid service of notice under section 148 of the Income Tax Act within the limitation period.
M.K. Bhatt, the Counsel for the assessee submitted that the Assessing Officer after recording the reasons for reopening of assessment under Section 147 of the Income Tax Act, the issued notices to the name of the deceased assessee Shri Ghulam Nezami and on receipt of said notice daughter of deceased assessee Ms. Farah Naaz.
The daughter of the deceased informed the Assessing Officer about the death of her father along with the copy of death certificate requesting the Assessing Officer to cancel/drop reassessment proceedings. However, the Assessing Officer did not give attention to said request and passed a reassessment order under Section 144/147 of the Income Tax Act by mentioning the name of daughter of assessee Ms. Farah Naaz as legal heir.
Further, the counsel argued that the notice seeking to reopen the assessment was issued in name of deceased assessee, since she could not have participated in reassessment proceedings, the provisions of section 292BB of the Income Tax Act was not applicable to assessee’s case.
Pankaj Khanna, the Counsel for the revenue submitted that there was sufficient information in the hands of the Assessing Officer regarding cash deposit to the bank account of Ghulam Nezami. Therefore, the action of initiation of reassessment proceedings and issuance of notice under Section 147 and 148 of the Income Tax Act respectively, is valid. Also, the Assessing Officer has mentioned the name of the legal heir of the assessee in the reassessment order.
After considering the contentions of the both parties, the two-member bench of Chandra Mohan Garg (Judicial Member) and Pradip Kumar Kedia, (Accountant Member) held that “where notice seeking to reopen assessment was issued in name of deceased assessee, since she could not have participated in reassessment proceedings, provisions of section 292BB were not applicable to assessee’s case.”
Therefore, the bench allowed the appeal filed by the assessee.
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