2019 (7) TMI 754 - HC - Income Tax

Reopening of assessment u/s 147 - notice against dead person - curable defect u/s 292B - HELD THAT - The issue raised in this writ application is very limited and no longer res integra and are covered by the decision of this Court in the case of Chandreshbhai Jayantibhai Patel vs. ITO 2019 (1) TMI 353 - GUJARAT HIGH COURT . It was held that notice u/s 148 is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice u/s 148 and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction u/s 147 and, hence, continuation of the proceeding u/s 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained For the foregoing reasons, the writ application succeeds and is accordingly allowed. - Decided in favour of assessee.

Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person.
2. Applicability of Section 292B of the Income Tax Act to cure defects in the notice.
3. Legal representative's liability and participation in assessment proceedings.

Detailed Analysis:

1. Validity of Notice Issued to a Deceased Person:
The primary issue in this case was whether a notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person could be deemed valid. The court examined the situation where the notice was issued to a deceased individual, Late Bachubhai Rambhai Kataria, and the legal heir (the petitioner) had informed the tax authorities of the death. Despite this, the authorities proceeded with the notice. The court referenced the case of Chandreshbhai Jayantibhai Patel vs. Income-tax Officer, where it was established that a notice issued to a deceased person is invalid unless the legal representative submits to the jurisdiction without objection. The court concluded that the notice issued under Section 148 to a dead person is invalid and cannot confer jurisdiction on the Assessing Officer.

2. Applicability of Section 292B of the Income Tax Act:
The respondent argued that the defect in the notice could be cured under Section 292B of the Income Tax Act, which states that no notice shall be invalid merely due to a mistake, defect, or omission if it is in substance and effect in conformity with the intent and purpose of the Act. The court, however, distinguished this case from others by noting that the petitioner had consistently objected to the validity of the notice and had not participated in the proceedings. The court held that Section 292B could not be applied to validate a notice issued to a deceased person when the legal representative had not waived the requirement of a valid notice and had not submitted to the jurisdiction of the Assessing Officer.

3. Legal Representative's Liability and Participation:
The court also examined the provisions of Section 159 of the Income Tax Act, which deals with the liability of legal representatives. It was noted that for the purpose of making an assessment, any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative. However, in this case, the proceedings under Section 147 were not initiated before the death of the deceased, and thus, the notice under Section 148 needed to be issued to the legal representative. The court emphasized that the legal representative had not participated in the proceedings by filing a return of income but had objected to the continuation of the proceedings. Therefore, the court concluded that the proceedings initiated based on an invalid notice could not be continued against the legal representative.

Conclusion:
The court allowed the writ application, quashing and setting aside the impugned notice dated 26.03.2019 issued under Section 148 of the Income Tax Act, 1961, as well as all proceedings pursuant thereto. The court made it clear that the notice issued to a deceased person is invalid, and the provisions of Section 292B cannot cure such a fundamental defect when the legal representative has not waived the requirement of a valid notice.

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