This document provides a detailed analysis of the Income Tax Appellate Tribunal’s final decision on the case between Akash Jain Legal Heir Smt. Raj Rani Chimpiwara, Deoband and ITO, Ward-3(3)(4), Deoband, concerning the assessment year 2014-15. The case number is ITA 2641/DEL/2022, presided over by Judicial Member Shri Kul Bharat and Accountant Member Dr. B.R.R. Kumar.
The appeal filed by the assessee, Akash Jain, Legal Heir of Smt. Raj Rani, was directed against the order dated 30.07.2022 passed by the National Faceless Appeal Centre (NFAC), Delhi, relating to the assessment year 2014-15. The primary issue in this case was the legality of the reassessment proceedings initiated under Section 147/148 of the Income Tax Act, 1961.
During the hearing on 19.09.2023, the Revenue was represented by Shri Om Parkash, Sr. D.R., and the assessee was represented by Shri Ankit Gupta, Advocate. The Tribunal proceeded to adjudicate the appeal based on the materials on record and submissions made by both parties.
The assessee raised several grounds of appeal, primarily challenging the legality of the reassessment proceedings initiated under Section 147/148 of the Income Tax Act, 1961. The grounds included the improper issuance of notice, lack of jurisdiction, and incorrect assessment of long-term capital gains.
In this case, the assessment was reopened under Section 147 of the Income Tax Act, and a notice under Section 148 was issued on 29.03.2018. In response, the assessee filed a return of income. However, there was no further compliance from the assessee in response to statutory notices. Consequently, the Assessing Officer (AO) framed the assessment under Section 144 read with Section 147 of the Act, making an addition of Rs. 35,72,539/- on account of long-term capital gains.
The learned counsel for the assessee argued that the initiation of proceedings was bad in law because the notice under Section 148 was issued to Smt. Raj Rani in her individual capacity, not as a legal heir. The assessment was framed in the capacity of a legal heir, which the counsel contended was incorrect and invalid. The Revenue, represented by the learned DR, conceded that the notice addressed to Smt. Raj Rani was a typographical error but argued that it should not vitiate the entire proceedings.
The Tribunal noted that there was no dispute regarding the notice being issued in an individual capacity while the assessment was framed as a legal heir. The Tribunal observed that the notice under Section 148 did not meet the legal requirements and hence, the reassessment proceedings were invalid. The Tribunal referred to the AO’s inconsistency in addressing the notice and concluded that the reassessment was bad in law.
The Tribunal quashed the reassessment proceedings, stating that the notice under Section 148 was invalid and the subsequent proceedings could not be sustained. The Tribunal allowed the appeal of the assessee, giving the Revenue liberty to issue a fresh notice to the legal heirs if permitted under the law.
Order pronounced in the open court on 27th September, 2023.
(DR. B.R.R. KUMAR)
ACCOUNTANT MEMBER
(KUL BHARAT)
JUDICIAL MEMBER
This case underscores the importance of proper issuance and addressing of notices in reassessment proceedings. The Tribunal’s decision to quash the reassessment due to an incorrect notice highlights the necessity for the Revenue to adhere to legal requirements strictly.
The appellant, Akash Jain, Legal Heir of Smt. Raj Rani, challenged the reassessment proceedings on the grounds of improper notice issuance and lack of jurisdiction.
The appellant contended that the notice under Section 148 was issued in an individual capacity and not as a legal heir, making the entire reassessment proceedings invalid. The Revenue admitted the typographical error but argued that it should not invalidate the proceedings.
The Tribunal found that the notice did not meet the legal requirements, as it was issued in an individual capacity while the assessment was framed as a legal heir. The Tribunal held that this inconsistency made the reassessment proceedings invalid.
The Tribunal’s decision in the case of Akash Jain Legal Heir Smt. Raj Rani Chimpiwara, Deoband vs ITO, Ward-3(3)(4), Deoband, reaffirms the principle that proper issuance and addressing of notices are crucial in reassessment proceedings. The quashing of the reassessment highlights the necessity for the Revenue to adhere to legal requirements and procedural correctness.
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