CIT's revision order under section 263 in deceased assessee's name held illegal and without jurisdiction

ITAT Delhi held that CIT's revision order u/s 263 passed in the name of deceased assessee was illegal and without jurisdiction. Despite CIT's knowledge of the assessee's death, the order was issued in the deceased's name rather than legal heir's name as required by law. Following SC precedent in Maruti Suzuki India Ltd case, orders passed in name of non-existing entity lack jurisdiction and must be set aside. The tribunal allowed assessee's appeal, declaring the revision order and subsequent proceedings as non-est.

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Issues:
1. Validity of order passed u/s. 263 of the Income Tax Act in the name of a deceased person.
2. Admissibility of additional ground challenging the validity of the order passed u/s. 263 of the Act.
3. Merits of the addition of Rs. 75,00,000/- on account of capital gains claimed as exempt u/s. 47(1) and rejection of deduction u/s. 54/s54F of the Act.

Issue 1: Validity of order passed u/s. 263 in the name of a deceased person

The appellant challenged the order passed by the Commissioner of Income Tax (CIT) under section 263 of the Income Tax Act, contending that it was issued in the name of a dead person, despite the CIT being informed of the death. The appellant argued that any order passed in the name of a deceased individual is non-existent. The Department opposed the admission of this challenge, stating that the appellant should have appealed the original order, and the subsequent assessment order was based on the CIT's decision. The Tribunal held that legal grounds questioning the validity of an order can be raised at any stage, especially if there is a jurisdictional defect. As the assessment proceedings stemmed from the flawed order, the subsequent proceedings were deemed vitiated. The Tribunal admitted the additional ground raised by the appellant and ruled in favor of the appellant on this issue.

Issue 2: Admissibility of additional ground challenging the validity of the order

The appellant raised an additional ground challenging the validity of the order passed u/s. 263 of the Act, arguing that it was issued in the name of a deceased person. The appellant informed the CIT of the death of the individual in several communications. The Tribunal noted that the CIT was aware of the death of the individual but still passed the order in the deceased person's name. Citing a Supreme Court ruling, the Tribunal held that an assessment order issued in the name of a non-existing entity is without jurisdiction. As the order was passed in the name of a dead person, the subsequent proceedings were deemed non-existent. Consequently, the Tribunal ruled in favor of the appellant on this ground.

Issue 3: Merits of the addition of Rs. 75,00,000/- on account of capital gains

Regarding the addition of Rs. 75,00,000/- on account of capital gains claimed as exempt u/s. 47(1) and rejection of deduction u/s. 54/s54F of the Act, the appellant argued that detailed submissions were made to the Assessing Officer and the CIT explaining the source of the amount received. The appellant provided evidence of the civil suits and transactions related to the receipt of the amount. The Department defended the addition, stating that the appellant did not appeal the CIT's order, and the assessment order was based on it. However, the Tribunal did not deliberate on this issue as it held the assessment order to be non-existent due to the jurisdictional defect in the original order.

In conclusion, the Tribunal allowed the appeal of the assessee based on the jurisdictional defect in the order passed u/s. 263 of the Income Tax Act, which was issued in the name of a deceased person. The Tribunal admitted the additional ground challenging the validity of the order and ruled that the subsequent assessment order and proceedings were vitiated. The merits of the addition were not deliberated upon due to the non-existence of the assessment order.

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