Facts of the Case

The petitioner, being the legal heir of the deceased assessee Late Dipankar Mohan Ghosh, challenged the draft assessment order dated 12.08.2022 passed under Section 144C(1) and the final assessment order dated 28.10.2022 passed under Section 147 read with Section 144C(3) and Section 263 of the Income Tax Act, 1961.

Additionally, the petitioner also assailed the valuation report dated 11.08.2022 forming the basis of the assessment.

It was contended that the notices issued by the Assessing Officer were not responded to as the assessee had expired. Consequently, objections before the Dispute Resolution Panel (DRP) could not be filed.

Parallelly, appeals against earlier revisionary orders dated 23.03.2020 and 30.03.2021 passed under Section 263 were already pending before the Income Tax Appellate Tribunal (ITAT), and orders therein were awaited.

Issues Involved

  1. Whether assessment proceedings conducted without response due to death of the assessee vitiate the assessment orders.
  2. Whether the petitioner should be relegated to the alternative statutory remedy of appeal before CIT(A).
  3. Whether coercive action can be taken by the revenue when related foundational issues are pending before the ITAT.

Pettioner’s Arguments

  • The petitioner argued that the impugned assessment orders and valuation report were liable to be set aside as no response could be filed due to the demise of the assessee.
  • It was submitted that objections before the DRP were not filed for the same reason.
  • The petitioner contended that the only available remedy now is to approach the Commissioner of Income Tax (Appeals).
  • It was emphasized that since the Section 263 orders were already under challenge before the ITAT, the present assessment orders, which are based on those revisionary orders, should not be enforced.

Respondent’s Arguments

  • The Revenue submitted that the petitioner has an alternative statutory remedy by filing an appeal before the CIT(A).
  • It was fairly stated that if such an appeal is filed, no coercive action would be taken against the petitioner until the Tribunal decides the pending appeals concerning Section 263 orders.

Cout’s Findings / Order

  1. The petitioner shall file an appeal before the CIT(A) within four weeks from receipt of the judgment.
  2. The Revenue shall not take any coercive action against the petitioner until:
    • the ITAT decides the pending appeals relating to Section 263 orders, and
    • for a further period of three weeks thereafter.

The Court took note that the impugned assessment orders are intrinsically linked to the outcome of the pending ITAT proceedings and thus granted interim protection.

Important Clarification

  • The Court did not adjudicate on the merits of the assessment orders.
  • Relief was granted primarily due to the peculiar facts, including the death of the assessee and pendency of connected appeals before the ITAT.
  • The protection against coercive action is conditional and time-bound.

Sections Involved

  • Section 144C(1) – Draft Assessment Order
  • Section 144C(3) – Final Assessment Order
  • Section 147 – Income Escaping Assessment
  • Section 263 – Revision of Orders Prejudicial to Revenue

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS26052023CW72772023_153011.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.