Income Tax Officer vs. Late Som Nath Malhotra (through Raj Rani Malhotra) ITAT Bench ‘G’, New Delhi Before D. Manmohan, (V.P) and N. K. Saini, (A.M.) ITA No. 519/Del/2013 Assessment Year : 2003-04. Decided on 02.07.2015 Counsel for Revenue / Assessee: J. S. Minhas / Piyush Kaushik

Facts:
The AO on the basis of information received from DIT (Investigation), New Delhi that one Deepak Changia had given an accommodation entry of Rs. 2.01 lakh to the deceased assessee, issued notice dated 31.03.2010 u/s 148. In response to the said notice the legal heir, the wife of the deceased assessee, informed the AO that the assessee had expired on 06.12.2002 and she also furnished the death certificate and copy of Income Tax Return filed on 29.08.2003. The AO however framed the assessment in the name of the deceased assessee at an income of Rs. 23 lakh by making the addition of Rs. 19.94 lakh.

On appeal, the CIT(A) held that since the legal heir of the deceased assessee had informed the AO at the very beginning of assessment proceedings that the assessee had expired, the entire reassessment proceeding made in the name of the deceased was null and void. Against the order of the CIT(A), the revenue appealed before the Tribunal and contended that the CIT(A) erred in ignoring the provisions of section 292BB and holding the assessment not valid when the legal heir of the assessee had duly attended the proceedings and not objected to the same.

Held:
The Tribunal noted that in the present case the AO recorded the reasons for issuing the notice u/s. 148 of the Act in the name of the deceased assessee and got the approval of the Addl. CIT also in the same name. The AO issued notice dated 31.03.2010 u/s. 148 of the Act also in the name of the deceased assessee. In response when the legal heir informed him about the death of assessee, then also the AO did not issue any notice u/s. 148 of the Act or 143(2) of the Act in the name of the legal heir. Thus, according to the Tribunal, the entire assessment proceeding by the AO was on the basis of the notice which was invalid under the Act. Therefore, relying on the decision of the Allahabad High Court in the case of CIT vs. Suresh Chand Jaiswal (325 ITR 563), it was held that the assessment framed on the basis of the invalid notice was void ab initio.