CIT(A) order denying section 54F deduction declared null and void for deceased assessee proceedings

ITAT Raipur held that CIT(A)'s order denying section 54F deduction was null and void as it was passed in the name of deceased assessee who had expired on 01.10.2020. Legal heirs failed to inform authorities about death despite appeal being decided three years after death. Court found fundamental defect in proceedings as section 159 provisions regarding deceased assessee were not followed. ITAT deprecated legal heirs' conduct in withholding death information and remanded matter to CIT(A) with directions to implead legal heirs and conduct fresh proceedings. Appeal allowed for statistical purposes.

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Issues involved: Appeal against order passed by ADDL/JCIT(Appeals)-2, Ludhiana, dated 28.02.2024, arising from order passed by A.O u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 for assessment year 2013-14.

Grounds of Appeal:
1. The basis of reasons recorded not added in reassessment proceedings, leading to invalid reassessment u/s. 147.
2. Disallowance of deduction u/s. 54F despite timely investment by the assessee.
3. Request for leave to alter grounds at the time of hearing.

Details of Judgment:
1. The A.O initiated proceedings u/s. 147 based on cash deposits by the assessee. Notice u/s. 148 was issued, and the assessee filed the return declaring income. A.O. declined deduction u/s. 54F due to investment timing, resulting in income determination.
2. Assessee's appeal to CIT(Appeals) dismissed due to non-participation. Assessee appealed further.
3. Assessee's representative argued against A.O.'s jurisdiction, citing lack of adverse inferences on cash deposits issue. Claimed addition on deduction u/s. 54F was invalid.
4. Departmental Representative highlighted a fundamental defect in CIT(Appeals) order due to failure to disclose the assessee's death.
5. Tribunal found the CIT(Appeals) order to be a nullity due to the deceased status of the assessee, remanding the matter for fresh proceedings involving legal heirs.
6. Citing Section 159, the Tribunal emphasized the need for compliance before passing orders against a deceased assessee, referencing a relevant High Court judgment.
7. The Tribunal allowed the appeal for statistical purposes, directing a de-novo appellate process involving legal heirs.

This judgment highlights the importance of procedural compliance and legal representation in tax matters, ensuring fairness and adherence to statutory provisions even in the event of the assessee's demise.

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