2023 (2) TMI 580 - HC - Income Tax

Reopening of assessment u/s 147 - proposal to assess the total income of the deceased assessee - notice under section 143 issued against a dead person - HELD THAT - Similar issue had come up before this Court in Income-tax officer vs. Bhupendra Bhikhalal Desai 2021 (9) TMI 431 - SC ORDER where the notice under section 143 issued against a dead person is held to be unenforceable in law. The Revenue in such case cannot contend that it had no knowledge about the death of the assessee and therefore they are entitlement to plead that the notice is not defective.- Decided in favour of assesseee.

Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person.
2. Applicability of Section 159 and Section 292B of the Income Tax Act in such cases.
3. Jurisdiction and procedural defects in issuing notices to deceased persons.
4. Legal obligations of legal heirs in tax assessment proceedings.

Issue-wise Detailed Analysis:

1. Validity of Notice Issued Under Section 148:
The primary issue in this case was the validity of the notice dated 13.04.2021 issued under Section 148 of the Income Tax Act, 1961, to a deceased person, late Shri Vinod Kanjibhai Hirani. The petitioner, being the legal heir, contended that no notice can lie against a dead person, and thus, the notice was invalid. The court referenced the case of *Income-tax officer vs. Bhupendra Bhikhalal Desai*, where it was held that a notice issued against a dead person is unenforceable in law. The court reiterated that the Revenue cannot claim ignorance of the death of the assessee as a valid defense.

2. Applicability of Section 159 and Section 292B of the Income Tax Act:
The respondent argued that under Section 159, the legal representative of the deceased is deemed to be an assessee and that the proceedings could continue against the legal heir. However, the court clarified that Section 159(2)(b) allows proceedings to be taken against the legal representative only if a valid notice under Section 148 is issued to them. The court also discussed Section 292B, which provides that no notice shall be invalid due to any mistake, defect, or omission if it is in substance and effect in conformity with the intent and purpose of the Act. However, the court held that the issuance of a notice to a dead person is not a mere procedural defect but a jurisdictional error, which cannot be cured under Section 292B.

3. Jurisdiction and Procedural Defects:
The court emphasized that a notice under Section 148 is a jurisdictional notice, and the existence of a valid notice is a condition precedent for the Assessing Officer to assume jurisdiction. A notice issued to a deceased person is invalid, and without a valid notice, the Assessing Officer cannot proceed with the assessment. The court cited the case of *Chandreshbhai Jayantibhai Patel vs. Income Tax Officer*, where it was held that the want of a valid notice affects the jurisdiction of the Assessing Officer and renders the proceedings null and void.

4. Legal Obligations of Legal Heirs:
The court noted that the legal heir had informed the respondent about the death of the assessee and had not participated in the proceedings. The court distinguished this case from others where legal heirs had participated in the proceedings, thereby waiving their right to object. The court concluded that since the legal heir did not waive the requirement of a valid notice and did not submit to the jurisdiction of the Assessing Officer, the provisions of Section 292B were not applicable.

Conclusion:
The court quashed and set aside the impugned notice dated 13.04.2021, declaring it invalid. The proceedings initiated under Section 148 of the Income Tax Act against the deceased assessee were deemed unsustainable in law. The petition was disposed of accordingly, emphasizing that the Revenue should have issued a valid notice to the legal heir within the prescribed time period.

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