2025 (10) TMI 583

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....ncome from Short term Capital gain and claimed exempt income u/s 10(38) of the Act, particularly when the appellant has claimed exemption w.r.t. long term capital gain on sale of shares. 3. On the basis of the facts and circumstances of the case and as per law, the Principal Commissioner of Income-tax is not justified in initiating the proceedings u/s 263 of the Act under the premise that the exemption u/s. 10(38) was withdrawn and the transaction of long term capital gain was to be taxed u/s. 112A of the Act, particularly when the exemption u/s. 10(38) was withdrawn from the next assessment year and the provisions of section 112A were inserted from next assessment year. 4. On the basis of the facts, in the circumstances of the case and as per law, the order passed by the Principal Commissioner of Income-tax u/s. 263 of the Act may please be quashed as the same is passed in respect of issues not arising out of the notice issued u/s. 263 of the Act. 5. On the basis of the facts and circumstances of the case, the Principal Commissioner of Income-tax is not justified in initiating revisionary proceedings u/s 263 of the Act on 05/06/2023 in the name of appell....

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....he Ld. PCIT. Ld.PCIT has not brought on record the legal heir of the deceased assessee. Therefore, the order of ld.PCIT is invalid and deserves to be quashed. Ld. AR for the assessee has relied on the following decisions : 1. CIT Vs. M. Hemanathan 68 taxmann.com 22 (Mad) 2. Hiraben Babubahi Patel Vs. Pr.CIT - ITA No.700/Ahd/2019 3. Mohammad Sharif Siddiqui through legal heir vs. ITO - ITA No.1179/Mum/2022 4. Sheela Devi Vs. PCIT - ITA No.1853/Del/2021 5. Ld.DR for the Revenue relied on the order of ld.PCIT. 6. We have heard the rival contentions and perused the records. In the instant case, it is a fact emerging from the record that assessee "MR. ANIL BANSILAL LODHA" has already passed away on 18.12.2017. Albeit, in para 5 of the impugned order, ld.PCIT has recorded this fact, however, ld. PCIT without bringing the legal heir on record, issuing notices on the legal heir has passed the order dated 21.03.2024 in the name of deceased assessee. 7. As per settled principles of law, no order can be passed against a dead person and any proceedings regarding the deceased assessee shall be continued against the legal representative from the stage....

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....before any order is passed. 9. We find Coordinate Bench, Ahmedabad in the case of Hiraben Babubhai Patel Vs. PCIT in ITA No.700/Ahd/2019 order dated 16.06.2023 has dealt with similar issue and quashed the order passed by ld. PCIT in the name of deceased assessee by observing as under : "6. We have heard the rival contentions and perused the material on record. Before going into the merits of the order passed under section 263 of the Act, we shall first deal with the assessee's challenge to jurisdiction of the order passed under section 263 of the Act. It is a well-settled principle of law that no order can be passed in the name of a deceased person, and various Courts, including the Hon'ble Supreme Court and jurisdictional Gujarat High Court, have consistently taken a view that such order passed in the name of the deceased person, is not valid in the eyes of law. 6.1 In the case of ITO v. Bhupendra Bhikhalal Desai [2021] 131 taxmann.com 40 (SC), the original assessee, namely 'B', passed away on 23-4-2017.The Assessing Officer issued a notice under section 153C in name of 'B' on 29-3-2019. After receiving said notice legal heir informed Asses....

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....ed as invalid. 6.4 In the case of Urmilaben Anirudhhasinhji Jadejav. ITO117 taxmann.com 504 (Gujarat), the Gujarat High Court held that reopening notice under section 148 issued against a dead person would be a nullity and; proceedings pursuant to a reopening notice issued to a dead person could not be continued against legal representatives. 6.5 In the case of Smt. Madhuben Kantilal Patel v. UOI [2023] 148 taxmann.com 202 (Gujarat), the Hon'ble Gujarat High Court held that here petitioner-legal heir of assessee-deceased had supplied death certificate of assessee to concerned officer within a short period after her demise, impugned reopening notice issued subsequently under section 148 in name of deceased was illegal and thus liable to be set aside. 6.6 In the case of Inox Wind Energy Ltd. [2023] 148 taxmann.com 289 (Gujarat), the Hon'ble Gujarat High Court held that where amalgamated company brought facts of amalgamation to notice of Assessing Officer, show cause notice cum draft assessment order issued in name of non-existing company would be void and same could not be said to be a procedural irregularity which could be cured under section 292B.....