Krishna Swamy Vs ITO (ITAT Hyderabad)
The Hyderabad ITAT quashed the entire assessment proceedings after holding that notices u/s 143(2) and 142(1), as well as the final assessment order u/s 143(3), were issued in the name of a deceased assessee despite the department being fully aware of the death. The Tribunal held that once the return itself was filed by the legal heir, the department could not continue proceedings against a non-existent person.
Rejecting the Revenue’s argument that the AO had mentioned the death of the assessee in the body of the assessment order, the ITAT observed that a mere reference to the death cannot cure the inherent jurisdictional defect which had crept into the proceedings from inception itself.
The Tribunal reiterated that once the department is informed about the death of an assessee, proceedings must thereafter continue strictly in accordance with section 159 against the legal representative. Since all statutory notices and the assessment order continued in the name of the deceased person and his PAN, the proceedings were held void ab initio.
The ITAT further held that participation by the legal heir in assessment proceedings does not cure a foundational jurisdictional defect. Relying on Savita Kapila, Vipin Walia, Alamelu Veerappan and the Supreme Court ruling in Maruti Suzuki India Ltd., the Bench observed that jurisdiction must be assumed strictly in the manner known to law and defects going to the root of jurisdiction are not curable u/s 292B.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
