Shri Lakha Singh Vs ITO (ITAT Chandigarh)
The appeal before the Income Tax Appellate Tribunal (ITAT), Chandigarh, concerned an assessment passed in the name of the deceased assessee, Shri Lakha Singh, and the confirmation of additions by the Commissioner of Income Tax (Appeals) [CIT(A)] totaling ₹99,40,000 without admitting additional evidence. The original additions, determined in a reassessment order under Section 144 read with Section 147 of the Income-tax Act, 1961 (IT Act), comprised ₹60,00,000 for unexplained investment in property and ₹39,40,000 for unexplained cash deposits.
Issues and Assessee’s Contentions
The legal heir, who filed the appeal after the assessee’s death on January 17, 2020, raised multiple grounds:
1. Validity of CIT(A)’s Order: The CIT(A)’s order was argued to be void-ab-initio as it was passed in the name of the deceased person, despite the death being formally intimated.
2. Admission of Additional Evidence (Rule 46A): The CIT(A) erred in rejecting additional evidence that would explain the source of the additions. The legal heir argued that the original non-compliance during assessment was due to the assessee’s advanced age, prolonged ill-health, and frequent hospitalization, which constituted sufficient cause under Rule 46A of the Income-tax Rules.
3. Validity of Assessment Proceedings: The CIT(A) failed to adjudicate vital legal grounds concerning the non-service of notice under Section 148 and the overall validity of the reassessment proceedings, which went to the root of the matter.
4. Additions on Merits: The two large additions, confirmed by the CIT(A) after rejecting the additional evidence on a technicality, were factually incorrect as the sources (including sale proceeds of agricultural land) could be explained.
The Departmental Representative (DR) supported the CIT(A)’s order, arguing that the assessee had ample opportunity during assessment and failed to furnish documentary proof of medical incapacity. The DR contended that the CIT(A) was justified in not admitting the evidence, citing judicial precedents that old age alone does not relieve statutory obligations. Furthermore, the DR pointed out that the appeal to the CIT(A) was itself filed in the name of the late assessee, justifying the CIT(A)’s approach.
