2023 (11) TMI 541 - HC - Income Tax

Reassessment proceedings against dead person - Liability of legal representative - HELD THAT - it is admitted that the impugned order was passed in the name of a dead person since the proceedings were initiated subsequent to the death of the original assessee. In terms of the provisions of Section 159(2)(b) of the Income Tax Act, any proceedings of the deceased person, subsequent to death, can be initiated against his legal representative. Though the present case was initiated subsequent to the death of the assessee, it was initiated in the name of the dead person and the assessment order was also passed in the name of a dead person, though his legal representative had participated in the proceedings. Department is supposed to have substituted the legal representative in the place of a dead person. However, they had not done the same and no order can be sustainable if it is passed in the name of a dead person - As decided in case of M.Hemanatha 2016 (4) TMI 258 - MADRAS HIGH COURT held that no proceedings can be initiated against a dead person. Thus this Court is of the considered view that the impugned orders are not sustainable and the same are liable to be set aside.

Summary

Issues:
The issues to be decided in this case are:
(i) whether the notice issued under Section 148 of the Income Tax Act against the deceased person and subsequent proceedings are valid and sustainable in law? and
(ii) Since the petitioner participated in the proceedings initiated by the respondents against her deceased husband, can the same be continued without substituting the petitioner as the legal representative in the place of the deceased?

Judgment Details:

Issue 1:
The petitioner argued that the notice issued under Section 148 of the Income Tax Act against a deceased person is non-est in law and illegal. The petitioner participated in the proceedings as the legal representative of her deceased husband. The respondents passed the assessment order and penalty proceedings against the deceased person. The petitioner sought to quash these orders.

Issue 2:
The respondents contended that it is their duty to initiate proceedings against the assessee and that the petitioner participated in the proceedings for the assessment year 2018-2019. They argued that the proceedings cannot be ignored at this stage. They also mentioned that for the assessment year 2019-2020, proceedings were initiated against the legal representatives of the deceased person.

Legal Provisions:
Section 159 of the Income Tax Act states that the legal representative of a deceased person shall be liable to pay any sum the deceased would have been liable to pay. It allows for the continuation of proceedings against the legal representative from the stage at which it stood on the date of the deceased's death.

Analysis:
The court observed that while the proceedings were initiated after the death of the assessee, they were conducted in the name of the deceased person, despite the petitioner participating as the legal representative. The court cited a previous judgment stating that no proceedings can be initiated against a dead person.

Conclusion:
The court held that the impugned orders were not sustainable as they were passed in the name of a dead person without substituting the legal representative. The assessment order and penalty proceedings were set aside, with liberty granted to the respondent to initiate proceedings against the legal representative of the deceased assessee in accordance with the law. The writ petitions were allowed with no costs, and connected miscellaneous petitions were closed.