Beena Jashwantbhai Patel Vs ACIT (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, allowed the appeal filed by the legal heir of the deceased assessee, Beena Jashwantbhai Patel, against an order by the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC). The original assessment order, under section 144 of the Income-tax Act, had added Rs. 18,47,75,393/- to the assessee income, covering unsecured loans, sundry debtors, and other assets. This addition was made due to the assessee lack of response, and the NFAC upheld it by dismissing the assessee appeal for want of prosecution.
Before the ITAT, it was brought to their attention that the assessee had passed away, and the appeal was filed by the legal heir. The ITAT observed a fundamental flaw in the assessment, noting that additions were made to both the asset and liability sides of the balance sheet, which violates basic taxation principles. Given these circumstances, and considering that the Commissioner of Income Tax (Appeals) did not address the appeal on its merits, the ITAT decided to set aside the orders. The case has been remanded to the Assessing Officer for a fresh assessment. The ITAT directed that the legal heir of the assessee should respond to all notices issued by the revenue authorities. If they fail to do so, the Assessing Officer is authorized to initiate penalty proceedings as per the Income-tax Act.
