2019 (2) TMI 1209 - HC - Income Tax

Reopening of assessment - validity of notice - requirement of issuing a notice in the name of correct person - notice of reopening in the name of the deceased assessee - HELD THAT - Requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee. The assessee on whom the notice must be sent must be a living person i.e legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and purpose of the Act. Therefore, Section 292B of the Act cannot be invoked to correct a foundational / substantial error as it is meant so as to meet the jurisdictional requirement. Therefore, both the impugned notice dated 29.3.2018 and the impugned order dated 13.11.2018 are quashed and set aside. It is made clear that this order will not prohibit the Revenue from issuing a fresh notice for reassessment, if requirement of Sections 147/ 148 of the Act are satisfied, including the limitation period therein. - Decided in favour of assessee.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 issued in the name of deceased assessee.

Analysis:
The petitioner, a legal heir of the deceased assessee, challenged a notice dated 29.3.2018 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the year 2011-12. The petitioner contended that the notice was without jurisdiction as it was issued in the name of the deceased person. The Assessing Officer rejected the objection, citing Section 292B of the Act, lack of registration as a legal heir, and the filing of a return in the deceased's name for another assessment year. However, it was established that the petitioner had registered as the legal heir of the deceased after the return was filed, and the assessment for a subsequent year was done in the petitioner's name. The Revenue's argument was refuted based on precedents from Gujarat, Delhi, and Madras High Courts, which deemed notices issued in the name of deceased persons for reopening assessments as null and void.

The Court emphasized that issuing a notice to the correct person is essential for reopening an assessment under Section 148. It was clarified that such a requirement is not merely procedural but a condition precedent for a valid notice. Notices issued in the name of deceased persons are not protected by Sections 292B or 292BB of the Act. The foundational requirement to acquire jurisdiction for reassessment is serving a notice on the correct person, who must be a living legal heir of the deceased assessee. Therefore, the impugned notice and order were quashed, allowing the Revenue to issue a fresh notice for reassessment if statutory requirements are met, including the limitation period.

In conclusion, the petition was disposed of by setting aside the impugned notice and order, clarifying that the decision did not prevent the Revenue from issuing a fresh notice if statutory conditions for reassessment were fulfilled.