The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has quashed the assessment order framed in the name of deceased assessee.
The assessee, c was an individual and for the year under consideration, filed his return of income on 05/09/2010 declaring a total income. The return filed by the assessee was processed under Section 143(1) of the Income Tax Act.
Subsequently, upon receipt of the information from the DGIT(Investigation) Wing, about having received vital information initially from the Sales Tax Department of Maharashtra that some dealers were indulged in the practice of providing accommodation entries in the form of bogus sales/purchase bills without supplying any goods and the assessee was one of the beneficiary of such bogus transaction, proceedings under Section 147 of the Income Tax Act were initiated and notice dated 15/09/2014 under Section 148 of the Income Tax Act was issued to the assessee.
Thereafter, notice under Section 142(1) of the Income Tax Act was issued to the assessee on 24/06/2015 calling for various details. Further, notice under Section 142(1) of the Income Tax Act was also issued on 04/09/2015, 02/11/2015, 24/11/2015, and 22/01/2016.
In the absence of any response from the assessee, the Assessing Officer (AO) proceeded to complete the best judgement assessment on the basis of material available on record. Vide order dated 24/02/2016 passed under Section 144 read with Section 147 of the Income Tax Act, the AO treated the entire purchases from the accommodation entry providers as non-genuine and made an addition to the total income of the assessee.
Mahita Nair, appeared on behalf of the revenue submitted that there was no intimation to the AO by the legal heirs regarding the demise of the assessee.
The two-member Bench of Prashant Maharishi, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) observed that before the CIT(A), the legal heir of the assessee specifically submitted that the assessee succumbed to cancer on 06/08/2015, in this regard the Death Certificate of the assessee and the medical report were also furnished along with the appeal before the learned CIT(A). Thus, it was evident that the assessee expired much before the passing of the assessment order on 24/02/2016 and even all the notices except dated 24/06/2015 were issued after the death of the assessee on 06/08/2015.
Undoubtedly as per Section 159 of the Income Tax Act, where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. However, undisputedly in the present case, after the death of the assessee, his legal heir was not brought on the record and no notice was issued in the name of the legal heir.
Therefore, the Bench allowed the appeal filed by the assessee holding that the assessment order framed in the name of the deceased assessee was non-est in law and hence is quashed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
