2019 (8) TMI 736 - HC - Income Tax

Validity of assessment - order in the name of a dead person - returns was filed by writ petitioner on 30.9.2016, post demise of assessee - dept contended that impugned assessment order is software generated and the respondent cannot change certain details - HELD THAT - With regard to the first of the threefold submissions pertaining to software, suffice to say that it is for the Income Tax Department to update data software to make allowance for such situations. In the considered view of this Court, such situations may not be infrequent and isolated. Situations wherein returns are filed post demise of the assessee by legal heir are common situations and therefore, it is for the Income Tax Department to ensure that adequate updation is made in the software in this regard. That puts an end to the first of the threefold submissions pertaining to software. Curable defect u/s 292-B - Learned counsel for writ petitioner pressed into service some orders to say that this Court has held that proceedings against a dead person are nullity, but learned Revenue Counsel says that these orders are distinguishable on facts as they pertain to notices whereas the instant writ petition is one assailing an assessment order made u/s 143(3) - it may not be necessary to delve into those aspects of the matter further and it would serve the purpose to direct the respondent to redo the assessment in the name of the writ petitioner on merits of the returns and in accordance with law. In the considered opinion of this Court, this will safeguard the interest of the writ petitioner (assessee's legal heir) as well as protect the interest of the Revenue. Respondent is directed to redo the assessment after putting the writ petitioner on notice. Respondent so redoing the assessment shall be on merits of the returns filed on 30.9.2016 and obviously in accordance with law

Summary

Issues:
Challenge to assessment order made in the name of a deceased person.

Analysis:
The writ petition challenged an assessment order dated 28.12.2018 made in the name of a deceased individual, despite being filed posthumously. The petitioner, son and legal heir of the deceased, argued that the assessment order was a nullity due to this error. The respondent, the Income Tax Department, contended that the order was software-generated and could be rectified under Section 292-B of the IT Act. They also suggested the petitioner had an alternate remedy through a statutory appeal to the Commissioner of Income Tax Appeals (CIT Appeals).

The Court considered the submissions and noted that the petitioner had withdrawn the statutory appeal based on the proceedings before the Court. Regarding the software issue raised by the Department, the Court emphasized the need for the Income Tax Department to update its software to accommodate situations where returns are filed posthumously by legal heirs. The Court then addressed the argument of a curable defect under Section 292-B of the IT Act, stating that the assessment order against a deceased person was not sustainable in law.

The Court concluded that the assessment order made in the name of the deceased individual was untenable. It ruled that the assessment should be redone in the name of the legal heir, the petitioner, in accordance with law and the merits of the returns filed. The Court clarified that setting aside the assessment order was solely based on the grounds of it being issued in the name of a deceased person, without expressing any opinion on the merits of the case. The respondent was directed to redo the assessment after notifying the petitioner.

In the final judgment, the Court disposed of the writ petition with the directions to set aside the impugned assessment order and redo the assessment process with the petitioner properly identified. No costs were awarded, and all related petitions were closed.