The Income Tax Appellate Tribunal (ITAT), Delhi bench, while directing readjudication, observed that the notice for continuing assessment proceedings of deceased persons was issued in the individual name instead of Hindu Undivided Family (HUF).
Pitam Singh, the assessee, had made cash deposits aggregating to Rs. 61,87,600. The case was reopened under section 147 of the Income-tax Act, 1961. Following Pitam Singh’s demise, the proceedings continued against the legal heir, Shri Jitendra Singh. However, despite notices issued by the Assessing Officer (AO), there was no compliance. Consequently, the AO made an ex parte addition to the assessee amounting to Rs. 61,87,600 and assessed the income at the same figure.
Aggrieved by the assessment order, the legal heir of the deceased assessee filed an appeal before the CIT(A), who also upheld the addition. Akhilesh Kumar, the Assessee Representative, argued that the AO failed to verify the correct facts and issued the notice in the individual name instead of HUF. The assessee is not the only legal heir of late Shri Pitam Singh, and the AO should have issued notices to all legal heirs.
Raja Rajeshwari R., Counsel for Revenue, supported the orders of authorities below. During the appeal proceedings, the tribunal observed that the assessment should have been made in the name of HUF since the deposited amount in the bank account originated from the sale consideration of HUF property. Furthermore, the AO should have verified other legal heirs.
After reviewing the facts and records, the two-member bench of Shamim Yahya (Accountant Member) and Kul Bharat (Judicial Member) restored the matter to the file of the AO, who would verify and decide the objections raised by the assessee regarding the assessment proceedings of the deceased person issued in the individual name instead of HUF.
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