2022 (9) TMI 1252 - HC - Income Tax

Reopening of assessment us 147 - authorities proposed to assess/reassess the income/loss of the deceased Assessee - whether the Assessment proceedings are maintainable against the dead person? - HELD THAT - As assessee died on 20.08.2019. Notice under section 148 of the Income Tax Act came to be issued on 30.3.2021, that is after about nineteen months from the death of the assessee. The petitioner herein who happens to be the legal representative of the deceased assessee, intimated to the Income Tax officer concerned on 16.2.2022 by addressing letter that the noticee Gordhandas Madhavji Somaiya had died long back and that the notice was without jurisdiction. The Income Tax authorities did not pay heed to the said intimation. The facts of the case did not offer any fact or circumstances to suggest that the legal representative of the deceased assessee in any manner submitted to the jurisdiction of the income tax authorities or in any way participated in the proceedings to persuade the court to hold otherwise. On the contrary, communication dated 16.2.2022 was sent to the Income Tax officer by the legal representative that the notice Goradhandas Madhavji Somaiya had died. Present petition deserves to be allowed. It is hereby allowed by holding that the impugned notice, which was against the dead assessee, could not be sustained. Appeal of assessee allowed.

Summary

Issues:
Assessment proceedings against deceased person under Income Tax Act, 1961.

Analysis:
The petitioner, as the legal representative of the deceased assessee, sought to quash a notice issued under section 148 of the Income Tax Act, 1961, proposing to assess/reassess the income/loss of the deceased for the Assessment Year 2017-2018. The deceased passed away on 20.08.2019, and the notice was issued on 30.3.2021, after a gap of nineteen months. The petitioner raised objections against the reopening, stating that the assessee had passed away, but the authorities failed to respond, leading to the filing of the petition.

The main issue before the court was whether assessment proceedings against a dead person are maintainable. Citing the case of Himadri Kandarp Mehta, the court emphasized that assessment against a deceased person is not permissible unless legal representatives participate in the proceedings. The court referred to Section 292B of the Act, stating that it does not apply when notices are issued to a dead assessee, and proceedings started against them. The court held that such proceedings would be a nullity and a jurisdictional defect.

In this case, the legal representative of the deceased clearly informed the Income Tax officer that the notice was invalid due to the death of the assessee. As there was no evidence to suggest that the legal representative submitted to the jurisdiction of the authorities or participated in the proceedings, the court deemed the notice against the dead assessee to be illegal. Consequently, the court allowed the petition, setting aside the notice issued by the Income Tax authorities and directing them not to proceed against the deceased assessee.

In conclusion, the court's decision was based on established legal principles that assessment proceedings against a deceased person are void unless legal representatives engage in the process. The judgment emphasized the importance of jurisdictional compliance and the invalidity of notices issued to deceased individuals under the Income Tax Act, 1961.