2025 (5) TMI 1659

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....24 for A.Y. 2012-13. The impugned order was originated from the order of the Learned Income-tax Officer, Ward 26(1)(1), Mumbai (for brevity the "Ld. AO")passed under section 144 read with section 147 date of order 30/11/2019. 2. The assessee has taken the following grounds of appeal:- "Ground 1- The Ld CIT(A) erred in confirming the addition of a sum of Rs. 42,22,616/-under section 68 of the Income Tax Act, 1961 treating the same escaped income and added the same to the income of the assessee. Ground 2- The Ld CIT(A) erred in charging interest 234A,234B and 234C of the act Ground 3- The appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal o....

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....) dated 22.07.2019 and 07.11.2019 were issued, followed by final show cause notices dated 12.11.2019 and 22.11.2019, requiring an explanation as to why a sum of Rs. 42,22,616/- should not be added to the income of the assessee. However, since the assessee had passed away on 09.12.2017, and his legal heir was unaware of the said proceedings, no response was filed on the assessee's income tax portal. Without conducting a proper enquiry, and solely relying on the information available, the Ld. AO treated the amount of Rs. 42,22,616/- as unexplained income under Section 69A of the Act and added it to the total income of the assessee. Being aggrieved, the legal heir of the deceased assessee preferred an appeal before the Ld. CIT(A), chall....

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....on of India 46,803/-   Total 21,11,308/- Further, the Ld.AR mentioned that the above purchases can be clearly verified from the Form 26AS (page 6 of paperbook) the said amount is shown in Part B i.e. TCS; the above 3 parties and purchases made from them can be clearly observed and the same is shown in the profit and loss account too.The Ld. AO without any information and material evidence on record has made addition amounting to Rs. 42,22,616/-u/s 69A of the Act to the income of the assessee. 5. In argument on legal grounds, the Ld.AR stated that during the appeal proceedings, the AR of the assessee mentioned that the assessee is dead person, but it was not considered during the assessment proceedings. The copy of the....

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....d.AR also relied on the order of the Hon'ble High Court of Bombay in the case of Gene Gracious vs ITO (2025) 170 taxmann.com 82 (Bombay). The relevant paragraphs 6 - 10 are reproduced as below:- "6. We find ourselves in agreement with the submissions as made on behalf of the petitioner. We may at the outset observe that the Supreme Court has beld it to be the first principle of civilised jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself (see: UMC Technologies (P) Ltd. v. Food Corporation of India [Civil Appeal No. 3687 of 2020, dated 16-11-20201). This basic jurisprudential principle becomes applicable w....

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....principles that the department cannot maintain issuance of the notice as impugned to a dead person. 9. In the present case, admittedly, the concerned assessee Mr. Gene Gracious expired on 09 November 2016, the show cause notice under Section 148A(b) of the IT Act was issued on 26 May 2022 and an order thereon was passed on 29 July 2022 under Section 148A(d), as also the impugned notice under Section 148 was also issued on 29 July 2022. All this has happened after the said assessee-Mr. Gene Gracious had expired. 10. In this view of the matter, the petition deserves to be allowed. It is accordingly allowed in terms of prayer clause (d). However, it is made clear that this order will not preclude the Revenue from issuing a fr....