2019 (4) TMI 784 - HC - Income Tax

Reopening of assessment u/s 148 - validity of notice against dead person - father of the petitioner expired on 12.6.2016 and impugned notice was issued on 28.3.2018 - notice in the name of legal representative - Held that - In the present case, the assessee has at first point of time objected to the issuance of notice u/s 148 and has not participated or filed any return pursuant to notice. Therefore, legal representatives not having waived requirement of notice u/s 148 and not having submitted to the jurisdiction of the AO pursuant to impugned notice, provisions of section 292A also would not be attracted and hence notice u/s 148 has to be treated as invalid. The facts in the present case are identical to the case of Chandreshbhai Jayantibhai Patel 2019 (1) TMI 353 - GUJARAT HIGH COURT as in the facts of the present case also father of the petitioner expired on 12.6.2016 and impugned notice was issued on 28.3.2018. In facts of the present case, even prior to issuance of notice, department was aware about the death of the petitioner's father since on 13.3.2018 in response to the summons issued u/s 131(1A) the petitioner had intimated to the department about the death of his father. Therefore, it cannot be said that the respondent was not aware about the death of the father of the petitioner and he could have belatedly issued notice under section 159 of the Act upon the legal representatives of late Shri Kanubhai Nagjibhai Rajpara. The contention advanced that since Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara was active, it can be presumed that tax payer was alive, cannot be sustained in view of the fact that only because Permanent Account Number is active, petitioner or any assessee is not liable to file the return of income and on that basis it cannot be presumed that the assessee is alive, more particularly, when the department is made to know about the death of the assessee prior to issuance of the impugned notice. In view of the aforesaid settled legal proposition that no valid notice can be issued against a dead person, the impugned notice is required to be quashed and set aside. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 against a deceased person.
2. Applicability of Section 292B of the Income Tax Act, 1961 to validate the notice.
3. Requirement of informing the Income Tax Department about the death of the taxpayer.

Issue-wise Detailed Analysis:

1. Validity of Notice Issued Under Section 148 Against a Deceased Person:
The petitioner challenged the notice dated 28.3.2018 issued under Section 148 of the Income Tax Act, 1961, on the ground that it was issued against a dead person, Kanubhai Nagjibhai Rajpara, who expired on 12.6.2015. The petitioner had informed the authorities about the death of his father and submitted the death certificate on 13.3.2018. Despite this, the respondent issued the impugned notice and subsequent notices under Section 142(1) of the Act. The court held that a notice under Section 148 of the Act against a dead person is null and void. The petitioner relied on previous judgments, including Chandreshbhai Jayantibhai Patel v/s. The Income Tax Officer and Rasid Lala v. Income Tax Officer, to support his contention that such a notice is without jurisdiction and cannot be continued.

2. Applicability of Section 292B to Validate the Notice:
The respondent argued that the notice issued under Section 148 should be validated under Section 292B of the Act, which allows for the correction of technical defects in notices. However, the court distinguished this case from others where legal representatives had participated in proceedings. In this case, the petitioner objected to the validity of the notice from the inception and did not file a return in response to the notice. The court concluded that Section 292B could not be applied to validate a jurisdictional notice issued to a deceased person, as it affects the validity of the proceedings.

3. Requirement of Informing the Department About the Death of the Taxpayer:
The respondent contended that the petitioner did not inform the jurisdictional Assessing Officer about the death of his father and that the Permanent Account Number (PAN) of the deceased remained active. The court noted that the petitioner had informed the department about the death through a summons issued under Section 131(1A) of the Act before the issuance of the impugned notice. The court rejected the argument that an active PAN implies the taxpayer is alive and emphasized that the department was aware of the death before issuing the notice.

Conclusion:
The court concluded that the notice under Section 148 issued to a deceased person is invalid and cannot be validated under Section 292B. The proceedings based on such a notice are without authority of law. Consequently, the impugned notice dated 28.3.2018 and further proceedings thereto were quashed and set aside. The petition was allowed, and the rule was made absolute with no order as to costs.