TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1700
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....in the appellate order, including incorrect application of law that goes against canons of well established fundamentals of partnership law. 2. That the ld. CIT (Appeal), Udaipur has erred in law and on facts in confirming M/s. Keshariyaji Filling Station, a partnership firm as an existing entity without properly appreciating the fact that all of its partners have expired at the time of issuance of notice u/s 148, and without properly appreciating the law that said firm effectively dissolved w.e.f. 02.10.2017 u/s 42-C of Indian Partnership Act hence, no assessment can be made on it in so far as per catena of various decision of different High Court and Apex Court are concerned. The ld. CIT (A) further failed to appreciate that no valid notice served on appellant as no notice can be issued in name of dead person/non existing entity. Hence, the assessment order passed in consequence to an invalid notice is nullity and resort to provisions of section 292B of Act cannot be made. 3. That the ld. CIT (A) has failed to appreciate that under the law of partnership a firm has no legal existence apart from partner and it is merely a compendious name to describe its partner. If respondent....
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....d undisclosed business income of the firm around 0.5% of the gross turnover of Rs. 33,54,56,594/- which comes to Rs. 16,77,283/- in the statement recorded u/s 131 of the IT Act during survey proceedings. 2.1 Further, as per ITS data available on the system, assessee had made cash deposit of Rs. 19,77,80,000/- in its bank account no. 61100346101 at SBBJ, Rishabdeo Branch during the year under consideration. As per ITS data the assessee had also received Rs. 23,401/- under section 194C on which TDS was deducted by Bharat Petroleum Co. Ltd. 2.2 Moreover, it is relevant to mention here that the case of the assessee firm for the AY 2011-12 was also reflecting in NMS/AIIMS module of the system, therefore, the assessee was given ample opportunities for filing its ITR for the relevant AY vide office letter no. 917 dated 30.07.2015 and letter no. 1506 dated 25.01.2018. But assessee had not filed its ITR. Therefore, after receiving information from ADIT (Inv.)-II, Udaipur, proceedings under section 147 of the IT Act was initiated in the current year for examining the escaped income of Rs. 19,94,80,684/- (Cash deposit of Rs. 19,77,80,000 + Business income of Rs. 16,77,283 + Receipt of Rs. 2....
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....lant, Mr. Kanak Kumar Jain did not provided any authority to represent M/s. Kishriyaji Filling station, Rishabhdeo, Udaipur during survey proceeding by surviving partner Mr. Shyam Sundar Jain. It was not required also, since, the partner Shri Shyam Sundar Jain was alive as on that date. 1.3 It is pertinent to mention here that facts got changed between the survey date on 03.12.2016 and ADIT (Inv.)-II, Udaipur report dated 12.02.2018, earlier as on date of survey one of the partner of firm Mr. Shyam Sundar Jain was alive and at later date as on 12.02,.2018 and on issue of foundational notice u/s 148 dated 08.03.2018 he was died. So, as on issuance of date of statutory notice u/s 148 none of the partner was alive and firm got dissolved by operation of law i.e. The Indian Partnership Act, 1932, as all legal heirs of the deceased partners were not agreed upon to constitute the firm. Therefore, the existence of firm as on date of survey proceeding cannot be considered as on date of issuance of notice u/s 148 of the Act, particularly for assumption of lawful jurisdiction of reassessment. 1.4 Thus, the notice issued in the name of M/s. Kishriyaji Filling station, Rishabhdeo (PB page 0....
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....to Construction Pvt. Ltd. v. Asst. CIT (2023) 451 ITR 510 (Guj). 1.13 The mandate of section 148(1) is that reassessment shall not be made until there has been service of notice. Mere mentioned name of assessee on the notice cannot be equated with the proper service of notice as contemplated under the provisions of the Act. The burden to establish that notice under section 149(1)(b) read with section 148(1) of the Act has been issued to the assessee is always on the Revenue. 1.14 Though ld. CIT (A) was in agreement with the contention of the appellant that notice was issued in the name of M/s. Kishriyaji Filling station, Rishabhdeo, without impleading legal representatives on it, but, still she tried to establish deemed service of notice by invoking provisions of Section 282BB on incorrect facts that no objection for issuance of notice was made during the assessment proceedings. This is contrary to assessment order itself which contains the letter dated 11.07.2018 at para 12 (page3), letter dt. 10.12.2018 at first para (page 5) of appellant legal representative of deceased partner Vimal Chand Jain and an email of another legal representative Mr. Mohit Vanawat L/H of other decea....
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.... nutshell the provisions of section 148 of the Act prescribes the service of a valid notice under section 148 on the assessee before making the assessment, reassessment or re-computation under section 147 of the Act, a valid service of a valid notice under section 148 of the Act, is not a mere procedural requirement, but is a condition precedent to the validity of any assessment, reassessment or re- computation to be made under section 147 of the Act and it is so because of the use of words "shall serve on the assessee" and also the requirement to the effect "before making the assessment, reassessment or re-computation under section 147" in the section itself, meaning thereby that if no notice under section 148 is issued or if the notice so issued is shown to be invalid, or the service of notice so issued, is shown to be invalid, the learned Assessing officer cannot proceed with the subsequent proceedings for making assessment, reassessment or re- computation under section 147 of the Act. In other words, if the learned Assessing officer, in such circumstances, proceeds with the subsequent proceedings, the same will be illegal and void. This proposition of law has been held by the....
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....iews are possible, one favouring assessee should have been followed. 1.26 Thus, in view of the foregoing material facts it is proved that there is gross violation of provision of law and principle of natural justice in issue of statutory notice, service of notice and passing of assessment order in the name of appellant, so, the appellant very humbly prays for quashing the illegal notices on the name of non-existent firm and assessment order passed without assumption of lawful jurisdiction for non-service of statutory Notice to the assessee and oblige us. " 5. On the other hand, the ld. D/R supported the orders of revenue authorities. 6. We have heard the rival submissions, perused the material on record and gone through the orders of the revenue authorities. The firm M/s. M/s. Keshariyaji Filling Station, is a partnership firm comprised off three partners viz. Shri Vimal Chand Jain, Shri Narendra Kumar Parmar and Shri Shyam Sunder Jain. Shri Vimal Chand Jain had expired on 26.01.2010 and Shri Narendra Kumar Parmar had expired on 15.08.2011 and the assessee firm had filed its last ITR for the AY 2010-11. A survey was undertaken by the department on the said firm on 03.12.2016 an....
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.... to the material evidence i.e. impounding order u/s 133A(3)(ia) had been issued in the sole name of M/s. Keshriyaji Filling Station, Rishabhdeo, Udaipur and Notice issued u/s 131 of the Act dated 03.12.2016 (PB 01 & 02) was issued in the name of Mr. Kanak Kumar Jain L/H late Shri Vimal Chandra Jain to appear. It is not apparent whether Mr. Kanak Kumar Jain was called upon to appear as legal representative of M/s. Kishriyaji Filling station. No notice had been issued to the legal heir of other partners for recording of statements etc. We have also noticed that during the period from date of survey viz. 03.12.2016 to the issuance of notice u/s 148 on 08/03/2018 the only surviving partner Shri Shyam Sunder Jain had also expired and hence it is undisputed fact that on the date of issuance of notice u/s 148 none of the partner of the appellant firm was alive. As per provisions of Partnership Act, 1932 as all the legal heirs did not agree to continue the business in partnership and hence the partnership firm ceased to exist. Hence the appellant firm was non existent on the date of issuance of notice u/s 148. We have also observed that the ld. AR of Kanak Kumar Jain had categorically obje....
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.....f. 1.4.1988).] shall make an assessment of the total income of the firm as if no such discontinuance or dissolution had taken place, and all the provisions of this Act, including the provisions relating to the levy of a penalty or any other sum chargeable under any provision of this Act, shall apply, so far as may be, to such assessment. (2) Without prejudice to the generality of the foregoing sub-section, if the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for " Income-tax Officer" (w.e.f. 1.4.1988).] or the [* * *] [ Certain words omitted by Act 21 of 1998, Section 65 (w.e.f. 1.10.1998).] [Commissioner (Appeals)] [ Inserted by Act 29 of 1977, Section 29 (w.e.f. 10.7.1978).] in the course of any proceeding under this Act in respect of any such firm as is referred to in that sub-section is satisfied that the firm was guilty of any of the acts specified in Chapter XXI, he may impose or direct the imposition of a penalty in accordance with the provisions of that Chapter. (3) Every person who was at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased, shall be jointly and severally....