2022 (9) TMI 1517 - HC - Income Tax

Reopening of Re-assessment - notice issued to a dead person - HELD THAT - AO as proceeded to pass the order of assessment against the deceased assessee. The said order is unsustainable as the entire reassessment proceedings were initiated and the order impugned passed against a dead person, which makes the order invalid and non est in the eyes of law. This court in the case of Dipak Tanna 2022 (6) TMI 1435 - BOMBAY HIGH COURT has held that the notice issued to a dead person is not valid. Reliance in this regard can also be placed in the case of ITO v. Durlabhbhai Kanubhai Rajpara 2019 (10) TMI 933 - SC ORDER as held that a notice issued under section 148 of the Act against a dead person would be invalid, unless the legal representatives submit to the jurisdiction of the Assessing Officer without raising any objection. Consequently, where the legal representatives do not waive their right to a notice under section 148 of the Act, it cannot be said that the notice issued against the dead person is in conformity with and with intent and purpose of the Act

Summary

Issues:
1. Validity of notice under section 148 of the Income-tax Act against a deceased person.

Analysis:
The judgment by the High Court of Bombay dealt with the validity of a notice issued under section 148 of the Income-tax Act against a deceased individual for the assessment year 2014-15. The petitioner, who was the legal heir of the deceased assessee, had informed the Assessing Officer about the demise of the assessee and submitted a copy of the death certificate. The Assessing Officer proceeded with the reassessment proceedings against the deceased assessee, justifying the continuation of the proceedings through the legal heir. However, the court held that initiating and passing an order against a dead person rendered the assessment order invalid and non est in the eyes of the law.

The court referred to a prior judgment in the case of Dipak Tanna v. ITO, where it was established that a notice issued to a deceased person is not valid. Additionally, reliance was placed on the case of ITO v. Durlabhbhai Kanubhai Rajpara, which emphasized that a notice under section 148 against a deceased person would be invalid unless the legal representatives submit to the jurisdiction of the Assessing Officer without objection. It was clarified that if the legal representatives do not waive their right to a notice under section 148, the notice against the deceased person does not comply with the intent and purpose of the Act.

Consequently, the High Court of Bombay quashed the order of assessment dated March 31, 2022, and the notice of demand dated March 30, 2021. The court allowed the writ petition, affirming that the proceedings against a deceased person were not legally sustainable, and hence, the order and notice were declared invalid and set aside.