2022 (5) TMI 1413 - HC - Income Tax

Assessment against the dead person viz., husband of the appellant - HELD THAT - We are of the opinion that the assessment order passed by the first respondent against the dead person, that too without following mandatory procedure as contemplated under the Act and the consequential proceedings emanated therefrom, cannot be allowed to be sustained. However, the learned Judge erred in dismissing the writ petition on the premise that the appellant has exercised the option of appeal remedy. Keeping in view the aforesaid, we set aside the order of the learned Judge and the assessment order as well as the proceedings initiated pursuant thereto for the assessment year in question and remand the matter to the assessing officer, who shall consider all the materials furnished by the appellant and thereafter, pass a reasoned order on merits and in accordance with law, after granting an opportunity of hearing to the legal heir(s) of the deceased assessee / appellant. Such an exercise shall be completed within a period of three weeks from the date of receipt of a copy of this judgment.

Summary

Issues involved:
1. Faceless assessment order passed against a deceased person.
2. Validity of assessment order passed against a deceased person.
3. Jurisdiction and procedural compliance in assessment proceedings.

Issue 1: Faceless assessment order passed against a deceased person

The judgment begins by quoting the Hon'ble Supreme Court's observation regarding tax laws being made by the living to tax the living, not the dead. The case involved the appellant's deceased husband, who had a proprietorship business and filed an income tax return before passing away. The first respondent proceeded with the assessment and passed a faceless assessment order against the deceased. The appellant challenged this order through a writ petition.

Issue 2: Validity of assessment order passed against a deceased person

The appellant's counsel argued that the assessment order against the deceased husband was invalid as it did not follow mandatory procedures, including providing a draft assessment order and an opportunity for a personal hearing. The counsel contended that the order was a nullity in law. The standing counsel for the respondents defended the order, citing provisions that allow proceedings against a deceased person to continue against legal representatives. The court noted the mistake in passing the order against the deceased and emphasized the need for proper legal heir details.

Issue 3: Jurisdiction and procedural compliance in assessment proceedings

The court highlighted that an alternative statutory remedy does not bar a writ petition in certain circumstances, such as violations of fundamental rights, principles of natural justice, or lack of jurisdiction. It referenced legal principles stating that a challenge to jurisdiction remains valid even if subsequent orders have been passed. The court found that the assessment order against the deceased without following mandatory procedures was unsustainable. The judgment set aside the order and directed a reassessment with proper consideration of materials and a hearing for legal heirs within three weeks.

In conclusion, the court emphasized the importance of following due process in assessment proceedings, especially when dealing with cases involving deceased individuals. The judgment underscored the need for procedural compliance and granted relief to the appellant by setting aside the assessment order and ordering a reassessment with proper legal procedures.