Case Law Details
Binod Kumar Singh Vs ACIT (ITAT Mumbai)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai dismissed an appeal filed by the late Binod Kumar Singh, represented by ACIT, due to the absence of a legal heir substitution following his death. This case highlights the critical procedural requirement of timely substitution of legal heirs in ongoing tax litigation. The decision, pronounced on May 2, 2024, underscores the necessity for legal representatives to actively engage in pending cases to ensure continuity and compliance with the procedural mandates of the Income Tax Act, 1961.
The appeal in question challenged an order dated January 20, 2016, issued by the Commissioner of Income Tax (Appeals)-49, Mumbai, which stemmed from a penalty order under Section 271(1)(c) for the assessment year 2003-04. The appellant, Binod Kumar Singh, did not appear for the hearing, nor did any representative file an application for adjournment.
Upon reviewing the case records, it was found that the appeal had been postponed multiple times between December 2017 and November 2019. The appellant’s authorized representative had requested an adjournment citing Binod Kumar Singh’s death on May 8, 2019, and the need to bring his legal heirs on record. A medical certificate confirming his death was submitted, leading the bench to adjourn the matter sine die.
Despite this, no further actions were taken by the appellant’s legal heirs to substitute themselves in the ongoing appeal. After nearly five years of inaction, the ITAT found it untenable to maintain the appeal, as the appellant had passed away, and no legal heirs had come forward to continue the litigation.
The ITAT’s decision is anchored in procedural law, which mandates the substitution of legal heirs in case of a taxpayer’s death to ensure the proper representation and resolution of disputes. The lack of timely action by the legal heirs in this case resulted in the dismissal of the appeal. The tribunal, however, granted liberty to the legal heirs to revive the appeal in the future by filing a modified Form No. 36 along with the necessary documents.
Practical Considerations
This case serves as a critical reminder to taxpayers and their legal representatives about the importance of maintaining procedural diligence in tax matters. The timely substitution of legal heirs is not just a formality but a necessity to uphold the interests of justice and ensure that pending appeals are adjudicated on their merits.
For tax professionals and legal advisors, this ruling emphasizes the need to promptly address and comply with procedural requirements following the death of a client. It is also a call to action for the legal heirs to actively participate in ongoing legal proceedings to avoid unfavorable outcomes like dismissal due to procedural lapses.
Conclusion
The ITAT Mumbai’s dismissal of Binod Kumar Singh’s appeal due to the non-substitution of legal heirs within a reasonable time frame underscores the critical importance of procedural compliance in tax litigation. This case highlights that the failure to act promptly and diligently can lead to significant legal setbacks, even in matters where substantive issues may still warrant judicial scrutiny. Legal representatives and heirs must ensure continuity and adherence to procedural norms to safeguard their interests in ongoing legal disputes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order dated 20/01/2016 passed under section 250 of the Income Tax Act, 1961 (“the Act”), by the learned Commissioner of Income Tax (Appeals)-49, Mumbai [“learned CIT(A)”], which in turn arose from the penalty order dated 25/03/2014 passed under section 271(1)(c) of the Act, for the assessment year 2003-04.
2. When the present appeal was called for hearing neither anyone appeared for/on behalf of the assessee nor was any application seeking adjournment Therefore, we proceed to decide this appeal ex-parte qua the assessee, after hearing the learned Departmental Representative.
3. From the perusal of the record, we find that the present appeal was initially listed for hearing from 27/12/2017 till 18/11/2019. However, pursuant to the letter dated 18/11/2019 filed by the learned Authorised Representative (“learned AR”) of the assessee, the present appeal was adjourned sine die and is now posted for hearing for the first time thereafter. From the perusal of the aforesaid letter dated 18/11/2019, we find that the learned AR sought an adjournment on the basis that the assessee, Shri Binod Kumar Singh, has expired on 08/05/2019 and his legal heirs are yet to be brought on record. In this regard, the learned AR also furnished a copy of the medical certificate of cause of death issued by Aster Hospital, Bengaluru. Thus, accepting the request of the learned AR, the bench adjourned the matter sine die. It is evident from the record that since the last date of hearing, i.e. on 18/11/20 19, till date no efforts have been made on behalf of the assessee to bring the legal heir on record, despite the fact that almost 5 years have elapsed since the death of the assessee.
4. Accordingly, in view of the aforesaid facts and circumstances, we are of the considered view that the present appeal filed by the assessee is not maintainable in its current form as the assessee has already expired on 08/05/2019 and his legal heir has not been brought on record. As a result, the present appeal is dismissed. However, liberty is granted, if in the future the legal heir of the assessee wishes to pursue the present appeal then the modified Form No. 36 be filed with the appropriate prayers and necessary supporting documents.
5. In the result, the appeal by the assessee is dismissed with the above directions.
Order pronounced in the open Court on 02/05/2024
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