Facts of the case:
Facts of the case in brief are that the AO on the basis of information received from DIT(Investigation), New Delhi that one Sh. Deepak Changia had given an accommodation entry of Rs. 2,01,000/- to the deceased assessee, issued notice dated 31.03.2010 u/s 148 of the Income Tax Act, 1961 in the name of the deceased. In response to the said notice the legal heir namely Smt. Raj Rani Malhotra wife of the deceased assessee vide letter dated 03.05.2010 informed the AO that Sh. Som Nath Malhotra, the assessee had expired on 06.12.2002. She also furnished the death certificate and copy of Income Tax Return filed. The AO however framed the assessment in the name of the deceased at an income of Rs. 22,99,976/- by making the addition of Rs. 19,94,120/-.
Being aggrieved the legal heir of the deceased assessee carried the matter to the ld. CIT(A) and challenged the validity of the notice u/s 148 of the Act on account of the reason that the notice had been issued in the name of dead person and even as per the record of the AO, the same has been served on the dead person. It was also submitted that the notice had been issued in the name of dead person, even though the original return was filed in the name of the legal heir since the assessee had died prior to the date of the accounting period. It was also pointed out that the AO himself had written in the assessment order that the notice was served on the assessee, therefore, the proceeding were invalid. The CIT(A) agreed with the contention of the Assessee and held the assessment as invalid.
Contention of the Assessee
The legal heir submitted that the notice had been issued in the name of dead person, even though the original return was filed in the name of the legal heir since the assessee had died prior to the date of the accounting period. It was also pointed out that the AO himself had written in the assessment order that the notice was served on the assessee, therefore, the proceeding were invalid.
The reliance was placed on the following case laws:
