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Case Law Details

Case Name : Darpan Kohli & Ors Vs ACIT (Delhi High Court)
Appeal Number : W.P.(C) 7904/2023 & CM APPLS. 30514/2023 & 30515/2023
Date of Judgement/Order : 31/05/2023
Related Assessment Year : 2017-2018
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Darpan Kohli & Ors Vs ACIT (Delhi High Court)

Introduction: In a case concerning the taxation of a deceased individual, the Delhi High Court recently ruled that an assessment order can’t be directed against only one of the deceased assessee’s legal heirs. In the case of Darpan Kohli & Ors Vs ACIT, the court set aside a ₹10 crore tax demand and ordered fresh proceedings with all legal heirs included.

Analysis: The writ petition challenged a notice under Section 148 of the Income Tax Act, 1961 and an assessment order concerning AY 2017-2018. The assessment order and notice were addressed to Mr Kuldip Kohli, who passed away in 2017. However, only one of his legal heirs, Darpan Kohli, was included in these proceedings, while others were overlooked.

In the court proceedings, it was established that the tax authorities were aware of Mr Kuldip Kohli’s death and that the proceeding had been attended by Darpan Kohli, one of the legal heirs. This fact was acknowledged in a previous assessment order.

The court found that given Mr Kuldip Kohli had more than one legal heir, the assessment order couldn’t have been directed solely against Darpan Kohli. As such, the court decided to set aside the assessment order, with instructions for the AO to issue notice to all legal heirs and grant them an opportunity to present their defense.

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