2018 (1) TMI 1634 - AT - Income Tax

Tribunal Invalidates Assessment Orders Against Deceased Person

B.G. Sharma (deceased) Versus ITO 14 (3) (1), Mumbai

B.G. Sharma (deceased) Versus ITO 14 (3) (1), Mumbai - TMI Issues:1. Validity of assessment orders passed against a deceased person.2. Reopening of assessment for assessment year 2007-08.3. Capital Gain addition on transfer of asset in assessment years 2007-08 and 2008-09.Issue 1: Validity of assessment orders passed against a deceased person:The appellant challenged the assessment orders passed against a deceased person, arguing that such orders are null and void in the eyes of the law. Despite the information of the death of the assessee being communicated to the assessing officer, the assessment orders for both assessment years were completed against the deceased person. The appellant cited legal precedents to support their claim, highlighting that assessments against deceased persons are not valid. The tribunal agreed with the appellant, emphasizing that assessment orders against deceased individuals are legally invalid. Citing judgments from various High Courts, the tribunal ruled in favor of the appellant, declaring both assessment orders as invalid.Issue 2: Reopening of assessment for assessment year 2007-08:The assessment for assessment year 2007-08 was reopened under section 147 based on the observations made during the assessment proceedings for assessment year 2008-09. Despite objections raised by the legal heirs of the deceased assessee, the reassessment was completed against the deceased person. The tribunal noted that the assessing officer was aware of the assessee's death but proceeded with the assessment against the deceased individual. The tribunal held that the reopening of the assessment for assessment year 2007-08 against a deceased person was legally flawed.Issue 3: Capital Gain addition on transfer of asset in assessment years 2007-08 and 2008-09:In both assessment years, capital gain additions were made on the transfer of assets. The assessing officer added capital gains on a protective basis in the assessment orders. The Commissioner (Appeals) upheld the additions. However, the tribunal did not delve into the merits of the capital gain additions as the primary issue of the validity of assessment orders against a deceased person rendered the discussion on merits academic. Consequently, the tribunal allowed both appeals of the assessee based on the invalidity of the assessment orders.In conclusion, the tribunal ruled in favor of the appellant, declaring the assessment orders for both assessment years as invalid due to being passed against a deceased person. The tribunal emphasized that assessments against deceased individuals are legally void and cited relevant legal precedents to support its decision.