2023 (3) TMI 868 - HC - Income Tax

Reopening of assessment u/s 147 - notice issued u/s 148A - no information has been relied upon with regard to the alleged income that has escaped - whether proceedings invoking Section 148A is invalid as no information has been relied upon with regard to the alleged income that has escaped? - HELD THAT - The Respondent would submit that the challenge to the notice dated 03.05.2021 does not survive any longer in view of the subsequent order rejecting the objections filed by the petitioner. This Court finds merit in the submission of Respondent, inasmuch as the challenge to the notice would no longer survive, in view of the subsequent notice/orders of the Respondent u/s 148A which is not challenged. Writ petition challenging the notice is dismissed. This would not preclude the petitioner from challenging the order made on the basis of the notice inter alia raising the plea of voidity, in view of the notice having been served on a dead person.

Summary

Issues:
Challenge to notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2016-17 on a deceased person, maintainability of the writ petition, objections raised by legal heir, validity of notice under Section 148 A, rejection of objections by the Respondent, subsequent orders under Section 148A, challenge to subsequent orders, plea of voidity.

Analysis:

The writ petition challenges a notice issued under Section 148 of the Income Tax Act, 1961 for the assessment year 2016-17 on a deceased person, Shri.D.N.Vikraman. The petitioner, wife of the deceased assessee, argues that serving a notice on a dead person is invalid. The Respondent contests the maintainability of the petition due to developments post the notice. Shri.D.N.Vikraman, a Director of a company, had filed his returns and passed away in 2019. A reassessment notice was issued in his name in 2021, triggering objections from his legal heir, Shri.Ajay.N.V., regarding the reasons for reassessment, limitation period, and income threshold for reassessment initiation.

The petitioner further objected to the lack of information relied upon for invoking Section 148A of the Act. The Respondent rejected these objections citing the judgment in the case of Ashish Agarwal. The Respondent argues that subsequent orders have addressed the issues raised in the initial notice, rendering the challenge to the original notice obsolete. The court concurs, dismissing the petition challenging the initial notice but allowing challenges to subsequent orders based on the initial notice, particularly on grounds of voidity due to service on a deceased person.

In conclusion, the writ petition is dismissed, with the court emphasizing that challenges to subsequent orders can still be pursued. The judgment highlights the importance of addressing legal proceedings accurately, especially in cases involving deceased individuals, and underscores the significance of complying with procedural requirements under the Income Tax Act.