Tribunal Orders Fresh Adjudication in Tax Case of Deceased Assessee
Income Tax Appellate Tribunal remands case back to CIT(A) for admitting additional evidence and adjudicating legal grounds, following procedural lapses in the case of Late Shri Lakha Singh.
In a significant decision, the Income Tax Appellate Tribunal (ITAT) Chandigarh Bench "A" has directed a fresh adjudication of the tax appeal concerning Late Shri Lakha Singh, whose case was mishandled posthumously. The judgment, dated September 22, 2025, was delivered by Judicial Member Shri. Laliet Kumar and Accountant Member Shri. Manoj Kumar Aggarwal.
The case initially arose from a reassessment by the Assessing Officer under Section 144 r.w.s. 147 of the Income Tax Act, which resulted in additions for alleged unexplained investments and cash deposits totaling approximately ?99.4 lakhs. Following the death of the assessee in January 2020, the appeal was filed by his legal heir. However, the Commissioner of Income Tax (Appeals) [CIT(A)] issued the appellate order in the name of the deceased, ignoring the legal heir's submissions and failing to admit critical additional evidence.
The Tribunal noted that while the appellate order being in the name of the deceased does not automatically invalidate it, the CIT(A)'s refusal to admit additional evidence constituted a denial of effective opportunity for the legal heir. The Tribunal highlighted the need for the CIT(A) to have considered the legal grounds regarding the reassessment's validity and the service of statutory notice, which were crucial to the case's foundation.
Furthermore, the Tribunal emphasized the legal heir's argument that the deceased was unable to comply with procedural requirements due to old age and prolonged illness, which should have warranted the acceptance of additional evidence. The Tribunal criticized the CIT(A) for not seeking a remand report from the Assessing Officer, as required under Rule 46A(3) of the Income-tax Rules.
Consequently, the Tribunal has remanded the case back to the CIT(A) with directions to admit the additional evidence, obtain a remand report, and ensure a thorough adjudication of the legal issues raised. The Tribunal stressed the importance of providing the legal heir with a fair opportunity to present their case before any final order is passed.
This decision underscores the judiciary's commitment to procedural fairness and the necessity of accommodating exceptional circumstances, such as the death of an assessee, in tax proceedings.
Bottom Line:
Income Tax - Order passed in the name of deceased person - Held, the appellate order is not vitiated merely because it was passed in the name of the deceased, as the appeal itself was instituted in the name of the deceased person. However, failure to admit additional evidence and adjudicate legal grounds raised by the legal heir necessitates a fresh adjudication by the CIT(A).
Statutory provision(s): Income Tax Act - Section 147, Rule 46A of Income-tax Rules
Late Shri Lakha Singh v. ITO, (ITAT)(Chandigarh Bench "A") : Law Finder Doc Id # 2795540
