Assessment Issued in Name of Deceased Invalid: ITAT Remands Rs. 18.47 Cr addition for fresh adjudication [Read Order]

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) remanded the matter back to the Assessing Officer (AO) for fresh adjudication in a case where an assessment order was issued in the name of a deceased assessee.

Beena Jashwantbhai Patel, legal heir of Late Shri Jaswantbhai Ishwarbhai Patel (assessee), had filed an appeal against the ex-parte order passed by the Commissioner of Income Tax (appeals) [CIT(A)] for Assessment Year 2019–20.

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The AO had completed assessment under Section 144 of the Act, adding unsecured loans of Rs. 6.22 crore, sundry debtors of Rs. 1.79 crore, and loans and advances of Rs. 10.46 crore, owing to the absence of any reply from the assessee.

Aggrieved by the order of the AO, the assessee filed an appeal before the CIT(A). The CIT(A) dismissed the appeal for want of prosecution without deciding it on merits.

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Aggrieved by the order of the CIT(A), the assessee filed an appeal before the ITAT. The assessee’s counsel submitted that the assessment order was issued in the name of the deceased person and the legal heir of the assessee filed appeal before the ITAT.

The two-member bench comprising Dr. B.R.R. Kumar (Vice President) and T.R. Senthil Kumar (Judicial Member) observed that additions made on both the assets and liabilities side of the balance sheet violated basic principles of taxation.

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The Tribunal held that the action of the AO in completing assessment in the name of a deceased person was invalid.

The Tribunal restored the matter to the AO for de novo assessment in the interest of justice. The tribunal also directed the AO to provide reasonable opportunity to the legal heir. The tribunal also directed the assessee to comply with notices issued by the AO.

The Tribunal also held that the assessee, if failed to comply with notices then the AO can initiate penalty proceedings as per provisions of the Act. The appeal of the assessee was allowed for statistical purposes.

To Read the full text of the Order CLICK HERE

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