Revisionary order u/s 263 passed in the name of dead person quashed. CIT was not justified in setting aside the assessment ignoring the fact that assessee had already expired
ABCAUS Case Law Citation:
ABCAUS 3185 (2019) (10) ITAT
Important case law relied upon by the parties:
CIT Vs. M. Hemanathan, (2016) 384 ITR 0177(Mad)
In the instant case, during the course of assessment proceedings, son of the assessee informed Assessing Officer (AO) that the assessee had expired and all such correspondences regarding him shall be addressed to his legal heir.
The assessment was completed by the AO in the name of the legal heir by making certain additions. Later the CIT passed order u/s 263 of the Income Tax Act, 1961 (the Act) by exercising his revisonary power in the name of late assessee by setting aside the order to the file of AO for re-do the assessment.
Feeling aggrieved from the order of Pr. CIT, the assessee was in appeal before the Income Tax Appellate Tribunal (Tribunal).
The assessee submitted that the order u/s 263 was passed in the name of deceased person which was not sustainable in the eyes of law. Therefore, entire proceeding initiated by the Pr. CIT u/s.263 of the Act was erroneous. In support of this contention, the assessee relied on the decision of Hon’ble High Court.
The Tribunal observed that as per the death certificate submitted, the assessee had died and this fact had duly been recorded by the AO in his assessment order and order had been passed in the name of legal heir also.
It was further noticed from the order of Pr.CIT that he had passed order in the name of deceased-assessee who was not in existence on the date of passing of the revisional order u/s 263 of the Act.
The Tribunal expressed agreement with the case law wherein the Hon’ble High Court had held that the settled position is that any proceeding initiated against a dead person is a nullity. The Hon’ble High Court had distinguished between a case where the proceedings are initiated against a person, who is alive, but continued after his death and a case of proceedings initiated against a dead person himself.
Following the decision of Hon’ble High Court, the Tribunal opined that the Pr. CIT was not justified in setting aside the assessment order invoking powers u/s 263 of the Act ignoring the fact that the assessee was already expired, which was already informed by legal heir, the son of the assessee during the course of assessment proceedings.
The Tribunal stated that the AO had also passed order u/s 143(3) of the Act in the name of legal heir of the assessee. Therefore, fresh assessment could not be initiated against the deceased assessee.
Accordingly, the Tribunal quashed the order passed by the Pr. CIT u/s 263 of the Act and allowed the appeal of the assessee.
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