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1. ISSUES PRESENTED AND CONSIDERED
1.1 Validity of the appellate order where the assessee had expired prior to disposal of appeal and legal heirs were not brought on record.
1.2 Whether, in the circumstances of non-compliance due to death of the assessee, the matter should be remanded to the first appellate authority to provide an opportunity to the legal heirs.
2. ISSUE-WISE DETAILED ANALYSIS
2.1 Validity of the appellate order passed after death of assessee without substitution of legal heirs
Interpretation and reasoning
2.1.1 The Court noted that the assessee had expired on 13.08.2017 and that even after such demise, the appeal before the first appellate authority continued in the name of the deceased, including the filing of Form No.35 in the name of the deceased assessee, without bringing legal heirs on record.
2.1.2 The Court observed that the first appellate authority granted as many as fourteen opportunities, yet no compliance was made on any of these occasions, and the appeal was dismissed without examination of the merits of the grounds.
2.1.3 In view of the death of the assessee and absence of substitution of legal heirs, the Court considered it inappropriate to sustain the appellate order without affording a proper opportunity to the legal heirs.
Conclusions
2.1.4 The appellate order, having been passed in the name of the deceased assessee without bringing the legal heirs on record, was not allowed to stand and was set aside for fresh adjudication.
2.2 Necessity of remand to first appellate authority to afford opportunity to legal heirs and scope of directions
Interpretation and reasoning
2.2.1 The authorised representative submitted that compliance before the first appellate authority could not be made due to the death of the assessee and requested a fresh opportunity to the legal heir by remanding the matter.
2.2.2 The Departmental Representative raised no objection to such a remand.
2.2.3 Considering the above and invoking the requirement of fairness and interest of justice, the Court deemed it proper to restore the matter to the file of the first appellate authority for a fresh decision after providing an effective opportunity to the legal heirs.
2.2.4 The Court also emphasised that the assessee (through legal heirs) must cooperate and make due compliance in the remand proceedings; failing which, the first appellate authority would be at liberty to decide the matter on merits on the basis of material available on record.
Conclusions
2.2.5 The entire matter was remanded to the first appellate authority with directions to (i) allow another opportunity to the legal heirs of the deceased assessee, and (ii) decide afresh on merits based on material on record and compliance made.
2.2.6 Substantive grounds relating to exemption under Section 54F, indexed cost of acquisition, and characterization of income as capital gains or business income were not adjudicated and were left open for decision by the first appellate authority.
2.2.7 The appeal was treated as allowed for statistical purposes, consequent upon the remand.
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