2021 (5) TMI 672 - HC - Income Tax

Validity of reopening of assessment u/s 147 - notice in name of dead person - HELD THAT - The procedure followed by the revenue in this matter is contrary to the requirement that, proceedings for assessment, in order to be valid, should be preceded by notices that are issued to the assessee in question. No doubt, notice issued under Section 148 on 31.03.2017 is valid. However, for reasons best known to the Assessing Officer, this notice has not culminated in an order of assessment and has been allowed to lapse. The second notice dated 20.06.2019 has been again issued to K.Mangalam, despite the Assessing officer having been intimated that she has passed away on 16.04.2017. The counter affidavit filed by the respondent does not anywhere dispute the position that the Income Tax Department was unaware of the demise of K.Mangalam on 16.04.2017 though this is the sheet anchor of the petitioner's case. Thus, the non production of an acknowledgment from the Assessing officer in this case may not be material, since there is no averment in the counter denying this position. Even before me, learned counsel for the revenue does not dispute the fact. The intimation filed by the petitioner on 13.06.2017, enclosing the death certificate of K.Mangalam is well within the knowledge of the Assessing Officer. All proceedings issued thereafter in the name of K.Mangalam are invalid including notice under Section 148 - Decided in favour of assessee.

Summary

Issues:
Challenge to assessment order under Income Tax Act, 1961 for AY 2012-13 based on the demise of the taxpayer and subsequent communication issues.

Analysis:
1. The petitioner challenged an assessment order dated 21.12.2019 under Section 144 read with Section 147 of the Income Tax Act, 1961 for AY 2012-13, filed as a legal representative of the deceased taxpayer, K.Mangalam.

2. The sequence of events involved notices issued post the demise of K.Mangalam, including a notice under Section 148 dated 31.03.2017, communication on 27.07.2017, a second notice under Section 148 dated 25.03.2019, and subsequent reminders.

3. The petitioner, as the legal representative, informed the Assessing Officer of K.Mangalam's demise multiple times, including a letter dated 19.12.2019. However, the assessment order was passed on 17.12.2019 in the name of the petitioner as the legal heir, disregarding the petitioner's objections.

4. The court found the revenue's procedure flawed as notices were issued in the deceased taxpayer's name despite being informed of her demise, rendering subsequent proceedings invalid. The second notice dated 20.06.2019 was issued to K.Mangalam post her demise, indicating a lapse in the assessment process.

5. The respondent's counter affidavit did not dispute the lack of awareness regarding K.Mangalam's demise, further strengthening the petitioner's case. The absence of an acknowledgment from the Assessing Officer was deemed immaterial given the lack of denial in the counter affidavit.

6. The court held that all proceedings initiated in K.Mangalam's name post her demise, including the assessment order, were invalid. The intimation of her death submitted by the petitioner was considered to be within the Assessing Officer's knowledge, making subsequent actions in her name unjustified.

7. Consequently, the writ petition was allowed, and connected miscellaneous petitions were closed without costs, emphasizing the invalidity of the assessment order and related proceedings due to the flawed process followed by the revenue authorities.