2022 (11) TMI 1260 - HC - Income Tax

Assessment proceedings maintainable against the dead person - Intimation from legal heir - HELD THAT - Bachuji Balaji Thakor died on 22.10.2018 in whose name, notice was issued by the income tax authorities on 31.3.2021 under Section 148 of the Act seeking to reopen assessment in respect of Assessment Year 2016-2017. The petitioner herein who happens to be the legal representative intimated to the income tax officer concerned that the noticee Bachuji Balaji Thakor 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. On the contrary, communication dated 22.3.2022 was sent to the income tax officer by the legal representative that the noticee Bachuji Balaji Thakor had died. the present petition deserves to be allowed. It is hereby allowed by holding that the impugned notice, which was against the dead assessee, could not have been sustained.

Summary

Issues Involved:
Challenge to assessment order and demand notice under Income Tax Act, 1961 against a deceased individual.

Analysis:
The petition challenged an assessment order and demand notice issued against a deceased individual, Bachuji Balaji Thakor, for the Assessment Year 2016-2017. The petitioner sought to declare the proceedings void ab intio and non-est. It was noted that Bachuji Balaji Thakor passed away on 22.10.2018, and the assessment order raised tax demands based on unaccounted sale consideration. The key issue was whether assessment proceedings against a deceased person are maintainable.

In a similar case, the court held that assessment against a dead person is not permissible unless legal representatives participate in the proceedings. The court emphasized that mere intimation of the death of the assessee does not constitute legal representation. The court clarified that proceedings against a dead person are a jurisdictional defect and cannot be continued unless legal representatives actively engage in the assessment process.

Despite the income tax authorities being informed of Bachuji Balaji Thakor's death, they proceeded with the assessment order without considering the legal heir's objection. The court found that the legal representative did not submit to the jurisdiction or participate in the proceedings, leading to the conclusion that the notice against the deceased assessee was invalid.

Consequently, the court allowed the petition, declaring the notice and assessment order against the deceased individual as illegal and set aside the assessment order dated 23.3.2022. The income tax authorities were directed not to proceed against the deceased assessee. The court emphasized the importance of legal representation and active participation of heirs in assessment proceedings involving deceased individuals to maintain the validity of the process.