TaxTMI 
TaxTMI 
2016 (10) TMI 1241
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.... We have heard ld. Representatives of both the parties and perused the material available on record. Brief facts of the case are that assessee filed return of income on 31.07.2006 declaring total income of Rs. 42,96,825/-. The return was processed under section 143(1) of the Act on 26.10.2007. Later, proceedings under section 147 were initiated by issue of notice under section 148 of the Act dated 25.03.2013 by recording following reasons which were served through speed post : "Shri Yoginder Singh, resident of Khangesra, Post Office - Kot, District Panchkula received enhanced compensation from LAO on 11.10.2005 at Rs. 7,24,46,572/- and interest on enhanced compensation of Rs. 7,53,20,932/- on 08.04.2006. Interest income has been assessed vide this office order dated 30.12.2009 under section 143(3) for assessment year 2007-08 and the capital gains accrued on account of enhanced compensation has escaped assessment as the land acquired has been treated non-cultivable land by this office". According to the Assessing Officer, the notice under section 143(2) was issued on 25.09.2013 and was served upon assessee on the same day. The assessee filed reply d....
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....tion of assessment which have been served on the same day as well as through affixture. The ld. CIT(Appeals) considered the service of the notice in the mode prescribed under section 282 of the Act and deemed validity of certain notices as per Section 292BB of the Act. The ld. CIT(Appeals) relied upon certain decisions in support of his findings that notice under section 148 have been duly served through legal heirs. It was also noted that copy of the assessment order for assessment year 2007-08 was already served upon the legal heirs. This shows that legal heirs were well aware about the action to be taken for assessment year under appeal i.e. 2006-07 and apparently the notice was refused to be accepted by the legal heirs which was returned with remarks. The ld. CIT(Appeals), therefore, held that notice under section 148 have been validly issued and served upon assessee within time. 5(i) The ld. CIT(Appeals) on merit found that in assessment year 2007-08, the Assessing Officer held that the enhanced compensation is taxable. It was also noted that ld. CIT(Appeals) in assessment year 2007-08 has held that the enhanced compensation received by the assessee is taxable and....
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....n of refusal by the legal heirs because no name of legal heirs have been mentioned in the notice under section 148 of the Act. No proper opportunity have been given to the legal heirs of the assessee and there is no service of the notice under section 148. The assessment order is passed in the name of dead person, therefore, assessment order is invalid and nullity. The ld. counsel for the assessee submitted that service of valid notice under section 148 is essential to make re-assessment. In this case, no notice under section 148 of the Act have been served upon assessee or the legal heirs therefore, it is invalid. Thus, the valid service of the notice on assessee strictly in terms of Section 148 read with Section 282(1) of the Act is a jurisdictional requirement. He has, further submitted that it was a presumption of the Assessing Officer/CIT(A) about service of the notice which is wholly erroneous and illegal. The onus is upon revenue to prove that assessee or the legal heirs have been served the notice under section 148 of the Act. In the present case, notice under section 148 and all subsequent notices under section 148(2) were addressed to the deceased assessee Shr....
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....d in the name of the assessee after his death is illegal and void". v) Decision of Madhya Pradesh High Court in the case of Sheikh Abdul Kadar V ITO 34 ITR 451 in which it was held that "The notices and all the communications were addressed to 'S' who admittedly was dead at that time and had been so dead for a long time. ITO knew from records of his own office that 'S' was not living and he also knew who his legal representatives were because the legal representatives had been assessed in subsequent years taking into account the assets of deceased 'S'. In these circumstances, it was incumbent upon the ITO to cause the notice to be issued to legal representatives of 'S'. Since all notices were issued in the name of dead person, therefore, ITO was prohibited from making assessment on the strength of the notice which he had issued. Petition was, therefore, allowed". vi) Decision of Delhi High Court in the case of Vipin Walia V ITO 67 Taxman.com 56 in which it was held, "Where department intended to proceed under section 147 against assessee when he was already dead, it could have been done so by issuing a notice to legal representative of assessee within period of lim....
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....de, only on ground of non service of notice, reassessment proceedings could not be terminated" which have been confirmed by Hon'ble Supreme Court in the case of Atulbhai HiralalShah Vs DCIT 73 Taxman.com 325. 9. The ld. DR also relied upon decision of Madras High Court in the case of Areva T&D India Ltd. 165 Taxman 123 in which it was held that "Where re assessment order was passed by Assessing Officer without considering objections of the assessee in response to notice under section 148 and without giving statutory notice under section 143(2), it amounted to nothing but procedural irregularities and hence, same would not make re-assessment a nullity in law". The ld. DR also relied upon decision of Hon'ble Punjab & Haryana High Court in the case of V.R.A. Cotton Mills (P) Ltd. V UOI CWP No. 18193 of 2011 dated 27.09.2011 in which the issue of service of notice under section 143(2) was considered and it was held that, "The Expression 'serve' means the date of issue of notice". 10. We have considered the rival submissions. It is not in dispute that assessee had expired on 08.04.2008, copy of the Death Certificate is also placed on record. It is als....
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....ased assessee i.e. the dead person. 11. Hon'ble Delhi High Court in the case of R.C.Jain (Decd) Vs CIT & others 273 ITR 384 held as under : "Held, that it was known to the respondents that RCJ had expired in the month of November,2001, and yet no proper action was taken and proceedings were commenced against a dead person. On the basis of this, the assessment order came to be made on February 28,2003, under Section 158BC and Section 142 of the Act,1961. This was made without waiting for the period given to the assessee for filing the return. In view of this, as the principles of natural justice as well as the provisions contained in the Act had been violated, there was no option but to quash the assessment order. 12. In this case, Hon'ble High Court observed that no explanation was rendered what-so-ever as to why the proceedings were commended against dead person and directed the CIT to render explanation in this behalf within a period of 15 days. 13. Hon'ble Madhya Pradesh High Court in the case of CIT Vs Smt. Santosh Rani 219 ITR 301 held as under : "Held that a perusal of the records showed that the original appeal was....
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.... passed in assessment year 2007-08 therefore, Assessing Officer was aware of the fact that the proceedings shall have to be commenced against the legal heirs only. The Assessing Officer cannot leave it to the postal authorities to verify the names of the legal heirs of the assessee while serving the notice upon the dead person. When no notice have been issued under section 148 in the names of LRs of the deceased assessee, therefore, there is no question of refusal to accept such notice under section 148 by the legal heirs. It is presumption of the ld. CIT(Appeals) only that notice under section 148 have been refused to accept by the legal heirs. The ld. DR also contended that when the names of legal heirs are not mentioned in the notice and re-assessment order, it is merely an irregularity. Notice under section 148 is jurisdictional notice and have been issued in the name of dead person. It is, therefore, clearly an illegality and nullity in issuing notice under section 148 in the name of dead person. The re-assessment order is also passed in the name of dead person, therefore, re assessment order is illegal, invalid, null and void and shall have to be declared nullity. It is....