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2018 (6) TMI 167
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.... B) The learned CIT (Appeals) erred in not allowing the exemption u/s 54F respect of construction of house at Bidadi for Rs. 38,50,000/ - A. INVALID ASSESSMENT ORDER 3) The Assessment order passed by the learned AO is bad in law, invalid and nullity due to want of jurisdiction. The Notice u/s 143(2) is issued on 03.09.2014, whereas the assessee, Appanna Seetharamu died on 19.02.2014. Further Notices u/s 142(1) were also issued in the name of deceased assessee on 01.06.2015 and 24.08.2015. The notice issued u/s 143(2) or u/s 142 is addressed to an assessee who was already dead on the date of issue of notices. The Assessment order states that Notice u/s 143(2) and 142(1) were issued and duly served on Assessee, despite the assessing officer acknowledging in the Assessment order that the Assessee was deceased. 4) In the present case the notice/ s were addressed to Appanna Seetharamu, who admittedly, was dead at that time and had been so dead for a long time. The Assessing Officer knew from the information and records submitted during first hearing that Assessee was not living, and he also knew who his legal representatives were. In these circumstances, it....
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....ath of assessee, no notice/ s were issued in the name of legal heir. g) When notice was not issued to legal heir despite knowing the death of assesse, incorporating the legal heir's name in the Assessment order will not validate the Assessment order. 8) The issues for consideration on the validity of assessment of dead person can be can be summarized in the following scenarios Sr. Situation Remark A Notice issued and assessment completed in the name of deceased. Invalid Assessment B After issue of notice assessee dies and assessment completed in the name of deceased. Invalid Assessment C Notice issued in the name of deceased but assessment completed in the name of legal Assessment representative without issuing valid notices to legal representatives Invalid Assessment D Notice issued in the name of deceased and assessment completed in the name of some of the legal representatives after issue of fresh valid notices to Legal representative. Irregular/defective Assessment 9) The scenario in which the assessment is completed in present case falls in Sr No. 'C' of the above table, wherein notice is issue....
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....tion revolves around section 292BB of the Act, which reads as follows 292BB. Notice deemed to be valid in certain circumstances. Where an assessee has appeared in any proceeding or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was - (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." Para 14: A cursory look at section 292BB would show that the same would apply only to two types of proceedings namely (i) proceedings, in which, the assessee had appeared and (ii) any inquiry, in which, the assessee had cooperated. Para 15: In the case on hand, the assessee was dead. It was the asses....
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....so been held in following cases that the Notices under section 143(2) or Section 148 are jurisdictional notice and when issued in the name of dead person will render the assessment void and cannot be cured by Section 292BB: a) Braham Prakash vs ITO (2004) 275 ITR 242 b) Veena Vij vs. ITO (ITA No. 1299/DEL/2012 c) CIT Vs Shital Prasad Kharag (2005) 196 CTR 162 (All) d) ITO VS Late Somnath Malhotra, ITA No 519/De1/2013 1 e) Shaikh Abdul Kadar Vs ITO AIR 1959 MP 101 f) Jerbanoo N. Wadia Vs ACIT (1991) 36 ITD 185 (Mum) g) Hasmukhbhai k. Barot L/H of Late Kantilal Barot vs. ACIT , ITA No.441/Ahd/2011, order dt. 13.08.15 h) ITO vs. Sikandar Lal Jain (2011) 45 SOT 0113 (TM) 15) Therefore the Assessment framed by the learned AO on the basis of notice issued u/s 143(2) dated 03.09.2014 and Notices u/s 142(1) dated 01.06.2015 and 24.08.2015 on a dead person is void-ab initio. B. DEDUCTION U/S 54F 16) The Assessing officer has disallowed the exemption claimed under section 54F on the contention that the assesse has purchased a vacant plot which does not qualify for exemption under section 54F. ....
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....nt cannot be framed in the name of deceased person through his legal heirs. It was further contended that notice under section 142(1) was also issued on 01.06.2015 and 24.08.2015 upon the deceased person, though the assessment was framed in the name of deceased through his legal heirs. In support of his contention, the learned counsel for the assessee has placed heavy reliance upon the judgment of the Madras High Court in the case of CIT vs M Hemanathan (Appeal No. 199 of 2016) and the order of the Tribunal (SMC Bench) in the case of Bimla Devi Vs ITO (ITA No. 1062/De1/2016). Reliance was also placed upon the order of the Tribunal in the case of ITO VS Late Somnath Malhotra, ITA No 519/De1/2013 and the order of the Tribunal in the case of Avinash V Vyas Vs. ITO in ITA No. 3538 and 3539/Mum/2010. 3. The learned DR on the other hand has contended that return was filed by the assessee on 31.07.2013 which was processed under section 143(1) of the Act. Thereafter, notice under section 143(2) was issued on 03.09.2014 upon the assessee and in response thereto, the authorized representative Shri. B. Mallaiah appeared and furnished the required information as sought by the AO with regard....
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.... demise. Relying upon the return filed by the assessee, the AO has issued a notice under section 143(2) of the Act upon the deceased assessee and in response thereto, the legal heirs along with authorized representatives appeared and brought this fact to the notice of the AO. The AO thereafter completed the assessment in the name of the deceased assessee through its legal heirs. 6. We have also carefully perused the judgments referred to by the parties and we find that in the case of CIT Vs. Hemanathan (supra) on which heavy reliance has been placed. The Hon'ble High Court has recorded the facts in this judgment in paras 3 and 4 of its order and from perusal of those paras we find that original assessment was completed under section 143(3) of the Act and thereafter the CIT(A) issued a show cause notice under section 263 on 06.09.2013 addressing the assessee Mr. M. A. Murgeshan. The notice was returned back with the endorsement "addressee deceased" and these facts were intimated by the ITO to ACIT by communication dated 23.09.2013. On the basis of the very said notice, thereafter the department served one more show cause notice on the son of the deceased assessee through a messen....
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.... an appeal before the CIT(A) with the submission that he has also made the investment in the construction of the house in Bidadi at Rs. 38,50,000/-. Before the CIT(A) it was also contended that cost of residential plot was of Rs. 52,20,000/-. The assessee could not demonstrate before the CIT(A) with evidence that he has constructed the residential house within one year prior to the sale of the immovable property and also construction of the new residential house within a prescribed period of 2 years from the date of sale of property. The CIT(A) accordingly confirmed the disallowance. 9. Now the assessee is before us and during the course of hearing, the learned Counsel for the assessee has candidly admitted that he is not entitled for deduction for purchase of vacant site for Rs. 48,00,000/-. He however contended that he has constructed the house within a period of one year from the date of sale of immovable property and made the investment of Rs. 38,50,000/-. Therefore, the claim of deduction should be restricted upto Rs. 38,54,000/-. 10. The learned DR on the other hand has contended that before the lower authorities, assessee has not furnished any evidence for construction....