2019 (10) TMI 261 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued only in the name of the dead person - HELD THAT - This Court finds that such notice is not sustainable. As perusal of the impugned notice in this case would show that it was not simply issued in the name of the dead person alone and on the other hand, it proceeds to indicate that the same was issued in the name of V.Maruthachalam, represented by legal heirs and by showing three persons, including the petitioner, as the legal heirs. Therefore, the notice issued u/s 148 in this case cannot be construed as if it was issued only in the name of the dead person. As rightly pointed out by respondent, the petitioner can file return and seek for reasons for reopening and in that event it is the duty of the respondent to give reasons so as to enable the petitioner to file his objection to the reopening proceedings. Needless to say that once such objections are filed, a speaking order is to be passed by the respondent as observed in GKN Drive Shaft's 2002 (11) TMI 7 - SUPREME COURT . When such course of action is yet to take place, do not think that the petitioner is entitled to maintain the writ petition by challenging the notice issued u/s 148 at the very initial stage. Writ petition is disposed of, by granting liberty to the petitioner to follow the procedures laid down after issuance of Section 148 notice as explained/clarified in GKN Drive Shaft's case. Accordingly, the petitioner shall file the return, as required in the impugned notice within a period of 15 days from the date of receipt of a copy of this order and ask for the reasons for reopening.

Summary

Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act in the name of a deceased person.
2. Maintainability of the writ petition challenging the notice without following the prescribed procedure.
3. Interpretation of legal heirship in the context of the notice issued under Section 148.

Analysis:
1. The petitioner contended that the notice issued under Section 148 in the name of the deceased father, represented by legal heirs, specifically naming a Hindu Undivided Family (HUF) as a legal heir, was void. However, the court differentiated this case from a previous judgment where the notice was solely in the name of the deceased person. The court held that in this instance, the notice was issued in the name of the deceased, represented by legal heirs, including the petitioner, making it valid.

2. The respondent argued that the writ petition challenging the notice was not maintainable as per the procedure outlined in the GKN Drive Shafts case. The court concurred, emphasizing that the petitioner should have first filed a return, requested reasons for reopening, and raised objections before approaching the court. Since these steps were not followed, the court deemed the writ petition premature and directed the petitioner to adhere to the prescribed procedure post-notice issuance.

3. The court highlighted the importance of following the procedure set out in the GKN Drive Shafts case, which requires the petitioner to file a return, seek reasons for reopening, and allow for objections before assessment. Emphasizing the need for a speaking order by the respondent after objections are filed, the court ruled that challenging the notice under Section 148 at the initial stage, without completing the prescribed steps, was not permissible. Consequently, the court disposed of the writ petition, granting the petitioner liberty to comply with the procedural requirements within a specified timeframe.