2022 (9) TMI 1255 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued to the dead assessee - main ground urged by the petitioner was that the notice was issued to the mother who was dead person and that the notice to the dead assessee was invalid and illegal - HELD THAT - Division Bench of this Court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1) (3) 2019 (9) TMI 356 - GUJARAT HIGH COURT addressed the very issue. The Court considered various decisions of the Supreme Court and the High Court, touching the aspects of the issue, held that there cannot be any assessment against a dead person. In that case also, notice was issued to the dead assessee u/s 148 of the Act. The proceedings would be nullity against the dead assessee, the rider was provided that in cases where legal representatives participate in the assessment or reassessment proceedings, the proceedings may be maintained and continued. It was at the same time held that mere intimation by the legal representative to the assessing officer that the noticee is dead, would not amount to legal representation on participation in that proceedings. In Urmilaben Anirudhhasinji Jadeja 2019 (9) TMI 356 - GUJARAT HIGH COURT while the revenue raised various contentions seeking a proposition that the proceedings against the dead assessee would be maintained, the Court negatived them all. One of the contention was based on Section 292BB - The said provision contemplates that the notice shall be deemed to be valid in certain circumstances. It mentions that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to assessment or reassessment, it shall be deemed that a notice required to be served under the Act has been duly served upon him. Such, it is provided, shall be precluded by taking any objection about the service of the service of the notice and manner of the service. The law is well settled that unless the heirs and legal representatives of the deceased assessee could be said to have been submitted to the jurisdiction of the assessing officer and have participated in the assessment or re-assessment proceedings, notice to the dead assessee and commencement of assessment or re-assessment proceedings against dead person is rendered null and void. The attempt on the part of the income tax authorities to start proceedings for assessment or re-assessment against the dead person is viewed not merely as procedural irregularity but it is stated as jurisdictional defect. There cannot be an assessment against the dead person. As noticed above, the provisions of Section 292B are also not applicable and no assessment can be framed against a non-existing entity or a person who has died. Recapitulating the facts of this case, the mother of the petitioner Rosamma died as back as on 27.5.2014. The petitioner intimated the authorities about the death and also forwarded the death certificate. As conveyed that he was not the only heir and was not having knowledge about the transactions and the income affairs of the mother. Despite that the Income Tax Authority proceeded to issue notice and passed the assessment order. There was no circumstance could be pointed out by the respondent nor it emerged from the facts on record that the petitioner in any way submits about the jurisdiction of the Income Tax Authority or sequised in the proceedings. Intimation was given about the death of the mother- the assessee but the authorities did not pay heed. The position of law emanating from the decision of this court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3) 2019 (9) TMI 356 - GUJARAT HIGH COURT and also in Himadri Kandarp Mehta L/H Of Late Kandarp Yashashvibhai Mehta 2022 (8) TMI 1038 - GUJARAT HIGH COURT decided as per the judgment dated 1.8.2022, could not be disputed by learned advocate for the respondent. The present petition deserves to be allowed.

Summary

Issues:
Challenge to assessment order and demand notice under Income Tax Act, 1961 based on the validity of notice issued to a deceased person.

Analysis:
1. The petitioner sought to set aside an assessment order and demand notice issued by the Income Tax Authority under Sections 144 and 147 of the Income Tax Act, 1961. The petitioner, being the son of the deceased, argued that the notice issued to the deceased after her death was invalid and illegal.

2. The petitioner informed the authorities about the death of the deceased and forwarded the death certificate. Despite this, the Income Tax Authority proceeded with the assessment process. The petitioner contended that the proceedings against a dead person are null and void based on legal precedents and the law.

3. The High Court referred to the case of Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, where it was held that assessment against a dead person is a legal nullity. The court emphasized that proceedings against a deceased assessee can only be maintained if legal representatives participate in the assessment proceedings.

4. The court clarified that mere intimation of the death of the assessee does not constitute legal representation. It further discussed the applicability of Section 292BB of the Act, stating that it does not apply when notices are issued to a deceased assessee, rendering the proceedings without authority of law.

5. The judgment highlighted that assessment against a dead person is not permissible, and any attempt to do so is considered a jurisdictional defect. The court reiterated that no assessment can be framed against a deceased individual, emphasizing the importance of legal representation in assessment proceedings.

6. Ultimately, the court allowed the petition, setting aside the assessment order, demand notice, and subsequent orders issued against the deceased person. The court held that the notice issued to the deceased assessee was not sustainable, in line with established legal principles and previous judgments.

7. The judgment concluded by granting the petition in favor of the petitioner, thereby invalidating the assessment proceedings conducted against the deceased individual and emphasizing the necessity of legal representation in such cases.