2020 (9) TMI 142 - AT - Income Tax

Reopening of assessment u/s 147 - notice on the deceased assessee - HELD THAT - We find that there is no subsequent notice u/s 148 which was issued by the AO on the legal heirs of the deceased assessee and therefore, the provisions of section 159 cannot be invoked in the instant case. In any case, the limitation for issue of notice u/s 148 had expired on 31.03.2016 and beyond such limitation period, no notice can be issued in the name of the legal Heirs. It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Consequently, the present reassessment proceedings initiated by issuance of notice in the name of the deceased assessee and consequent reassessment proceedings is hereby quashed for want of jurisdiction - See LATE SHRI BHURA RAM VERSUS THE ITO WARD 7 (2) , JAIPUR 2019 (12) TMI 1101 - ITAT JAIPUR When the notice issued under section 148 against the deceased person as well as the assessment framed by the AO in the name of the deceased assessee then the impugned assessment order passed by the AO is invalid for want of valid notice as well as the assessment framed against the dead person. - Decided in favour of assessee.

Issues Involved:
1. Validity of reassessment notice issued under Section 148 to a deceased person.
2. Consequential reassessment order's validity.
3. Sustaining the addition of ?26,26,772/- on account of long-term capital gains.

Detailed Analysis:

1. Validity of Reassessment Notice Issued Under Section 148 to a Deceased Person:
The primary issue was the validity of the reassessment notice issued under Section 148 to the deceased assessee. The legal heir argued that the notice issued to a deceased person was invalid and void ab initio. The notice under Section 148 was issued on 30.03.2016, while the assessee had expired on 24.04.2012. The legal heir contended that no notice was issued to them, and subsequent notices and query letters were also addressed to the deceased. The Tribunal noted that the issuance of a valid notice is a condition precedent for the validity of reassessment proceedings. It was established that the notice issued to a deceased person is a nullity in the eyes of law, as supported by various judicial precedents, including the cases of Balbir Singh vs. ITO and Sumit Balkrishna Gupta vs. Assistant CIT. The Tribunal concluded that the reassessment proceedings initiated by issuing notice to the deceased assessee were void for want of jurisdiction.

2. Consequential Reassessment Order's Validity:
The Tribunal examined whether the reassessment order passed under Section 147 read with Section 144 was valid, given that the initial notice was issued to a deceased person. The Tribunal found that no subsequent notice under Section 148 was issued to the legal heirs of the deceased assessee. Moreover, the limitation period for issuing such notice had expired on 31.03.2016. The Tribunal referred to the provisions of Section 159 and concluded that these provisions could not be invoked since no valid notice under Section 148 was issued to the legal heirs within the limitation period. Consequently, the reassessment order was quashed for being void ab initio.

3. Sustaining the Addition of ?26,26,772/- on Account of Long-Term Capital Gains:
Given the Tribunal's findings on the invalidity of the reassessment notice and the subsequent reassessment order, the issue of sustaining the addition of ?26,26,772/- on account of long-term capital gains became academic. The Tribunal did not delve into the merits of this addition, as the reassessment proceedings themselves were found to be void and without jurisdiction.

Conclusion:
The Tribunal quashed the reassessment proceedings initiated by issuing notice to the deceased assessee and the consequent reassessment order for want of jurisdiction. The Tribunal's decision was based on the settled legal principle that a notice issued under Section 148 to a deceased person is a nullity in the eyes of law. As a result, all other grounds raised by the assessee became academic and were dismissed as infructuous. The appeal of the assessee was allowed.

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