Income Tax Notice, Revisionary Proceedings Against A Dead Person Is Void: ITAT
Mariya Paliwala
5 March 2022 9:53 AM GMT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the notice issued against a dead person is null and void and all consequent proceedings or orders being equally tainted are liable to be set aside.The two-member bench of Amit Shukla (Judicial Member) and Pradip Kumar Kedia (Accountant Member) has observed that the entire proceedings beginning from issue of show...
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the notice issued against a dead person is null and void and all consequent proceedings or orders being equally tainted are liable to be set aside.
The two-member bench of Amit Shukla (Judicial Member) and Pradip Kumar Kedia (Accountant Member) has observed that the entire proceedings beginning from issue of show cause notice and culminating in revisional order under Section 263 of the Act is a nonest exercise and cannot be given effect in law regardless of the fact whether the revenue was privy to death or otherwise.
The appeal was filed at the instance of the legal heir and wife of the deceased-assessee against the revisional order of the Principal Commissioner of Income Tax (PCIT) passed under Section 263 of the Income Tax Act, 1961. The assessment order passed by the Assessing Officer under Section 143(3) read with Section 147 of the Act was sought to be set aside for reframing the assessment in terms of supervisory jurisdiction.
The appellant/legal heir has challenged the revisional action of the PCIT by which the Assessing Officer was directed to pass the assessment order denovo after making inquiries on the points set out in the revisional order. The assessee has challenged the assumption of jurisdiction by the PCIT under Section 263 of the Act on the ground that the initiation of revisional proceedings and consequential order under Section 263 of the Act is in the name of a deceased person is a nonest and unsustainable in the eyes of law. The assessment order under revision is neither erroneous nor prejudicial to the interest of the Revenue and thus the revisional commissioner was not competent to exercise revisional powers.
The appellant contended that after the death of the assessee the show cause was issued and addressed to the deceased-assessee instead of legal heir. It was thus contended that the show cause notice issued in the name of a deceased person is nonest and thus liable to be quashed at the threshold.
It was further contended by the appellant that show cause notice was issued asking the assessee to appear after the expiry of the limitation. However, the show cause notice was later modified and the fresh notice was issued through e-mail and the matter was fixed for hearing on the immediate next date in grave violation of principle of natural justice. There was no participation on behalf of the deceased-assessee in the proceedings and no further opportunity was given to the assessee/legal heir to defend his case.
"We are constrained to observe that such a casual approach of a very senior functionary of the Department does not augur well in the eyes of public and cannot be countenanced on the touchstone of sacrosanct principle of natural justice explicit in 263 itself," the ITAT remarked.
The Tribunal stated that in the absence of any opportunity to the assessee, for which the fault is attributable squarely to the PCIT is fatal and such defect being incurable, the revisionary order passed under Section 263 of the Income Tax Act is also required to be quashed.
Case Title: Sheela Devi Versus Principal Commissioner of Income Tax, Faridabad
Citation: I.T.A. No. 1853/DEL/2021
Counsel For Appellant: Advocate Swati Talwar
Counsel For Respondent: Senior Departmental Representative Ajay Kumar
