This case involves Tahar Singh, represented by his legal heir Sunita Kumari, who appealed against the order of the CIT(A)-14, New Delhi, concerning the assessment year 2007-08. The appeal addresses issues related to the service of notice, jurisdictional errors, and the assessment of capital gains on the sale of property.
The dispute originates from a property sale on April 10, 2006, which the Income Tax Officer (ITO) used to assess a short-term capital gain. Notices were issued to the legal heirs of Tahar Singh after his death, which led to the legal contention that the assessment process was flawed.
The appellant’s counsel argued that the legal heirs were unaware of the assessment order until a recovery notice was received. They also contended that the notice under Section 148 was not properly served, making the assessment order invalid. Additionally, they disputed the capital gains calculation and the responsibility of the legal heirs to pay any tax on the assessed income.
The Income Tax Appellate Tribunal (ITAT) noted that the CIT(A) dismissed the appeal without considering the merits, solely based on the appeal being time-barred. The ITAT emphasized the need to address the substance of the case rather than technicalities, especially given the unique circumstances where the original assessee had passed away, leaving multiple legal heirs.
On June 23, 2021, the ITAT ordered that the case be remanded back to the Assessing Officer (AO). The AO was instructed to issue notices to all legal heirs of the deceased Tahar Singh and reassess the case following due process, ensuring all parties are given a fair opportunity to present their case.
This case underscores the importance of following proper procedural requirements in tax assessments, especially involving deceased taxpayers. It highlights the need for tax authorities to provide adequate notice to all legal heirs and consider the unique circumstances of each case. The decision to remand the case for fresh assessment ensures that justice is served while adhering to the principles of natural justice.
This ruling sets a precedent for handling similar cases involving deceased taxpayers and multiple legal heirs. It reinforces the importance of proper notice and procedural compliance in tax assessments, ensuring that all affected parties are fairly treated.
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