HC sets aside IT’s Rs 10 cr assessment order against legal heir of deceased

The Delhi High Court has set aside an assessment order of Rs 10 crore issued by the Income Tax Department on the ground that it cannot be issued only against one legal heir of a deceased assessee.

The high court asked the income tax authorities to issue notice to the petitioners and grant them opportunity to present their defence qua (in so far as) the merits of the case.

“Deceased/ assessee had more than one legal heir, which includes petitioner nos. 2 and 3. Given this position, cannot but accept that the assessment order could not have been directed only against Darpan Kohli, that is, petitioner no.1.

“Therefore, according to us, the best way forward would be to set-aside the assessment order. It is directed accordingly,” a bench of Justices Rajiv Shakdher and Girish Kathpalia said.

The bench said the assessment officer’s notice shall indicate the date and time of the hearing and also permit the petitioners to file a written response.

The assessment officer will pass a speaking order, copy of which will be furnished to the petitioner, it said.

The court was hearing a petition by three persons, who are the legal heirs of deceased assessee Kuldip Kohli who died in December 2017.

They challenged a 2021 notice issued to Kuldip Kohli after his death and also an assessment order of May 2023 raising a tax liability of Rs 10.08 crore on his PAN without bringing on record all his legal heirs or transferring the proceedings on their PAN.

Advocate M Sufian Siddiqui, representing the petitioners, submitted that the death of the assessee was duly communicated by his legal heirs. However, in ignorance of the facts available on record, the scrutiny proceedings have been wrongly conducted in the name of the deceased assessee on his PAN without bringing on record all his legal heirs or representatives as per the requirement of law, he said.

He said the proceedings were never transferred by the assessment officer on the petitioners’ PAN who are the legal heirs of the deceased assessee.

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