2024 (3) TMI 575 - HC - Income Tax

Validity of Reassessment proceedings - notice u/s. 148A(b) issued in the name of a dead assessee - Petitioner contended that respondents could not have issued notice u/s. 148A(b) since Late assessee who had died in the year 2017 itself and said factum of death was very well known to the respondents, therefore, the notice u/s. 148 of the Act of 1961 has been issued in the name of legal heirs - HELD THAT - It is not in dispute that the stage of show cause notice u/s. 148 is already over. Thereafter, much water has flowed as assessment proceedings have taken place and final assessment order has been passed. Admittedly, the petitioner did not inform regarding death of the original assessee alongwith death certificate to the department. When a statutory forum is created for redressal of grievance, normally writ petition cannot be entertained ignoring such statutory dispensation. In exceptional circumstances, there are deviation to the aforesaid rule, but in this case, the proceedings u/s. 148 had attained finality. Now, at this stage, petitioner has an efficacious statutory alternative remedy to challenge the same u/s. 246 of the Act of 1961. Therefore, it is inappropriate for this Court to take indulgence in the matter by-passing the statutory remedy available. Accordingly, the present petition is disposed off with liberty to the petitioner to take recourse to statutory remedy of appeal available for challenging the assessment order.

Summary

Issues involved: Challenge to notice under Section 148 of the Income Tax Act, 1961 for re-opening assessment for the assessment year 2016-17 on grounds of being illegal, without jurisdiction, arbitrary, and in violation of principles of natural justice.

Issue 1: Validity of notice under Section 148 of the Income Tax Act, 1961

The petitioner contended that the notice under Section 148 of the Act was issued in the name of legal heirs of the deceased assessee, which was improper as the notice must be issued to a living person. Citing a previous court order, the petitioner argued that a notice cannot be issued in the name of a deceased assessee. In response, the respondents stated that the petitioner failed to inform the department about the death of the original assessee in a timely manner and did not provide the death certificate. The respondents emphasized that the petitioner continued to file returns in the name of the deceased even after her death. The respondents argued that challenging the show cause notice at this stage, after the final assessment order has been passed, was inappropriate.

Issue 2: Availability of statutory remedy

The respondents pointed out that the final assessment order was appealable under Section 246 of the Act, and the petitioner should have utilized this remedy instead of filing the present petition. Referring to a previous judgment, the respondents highlighted that once the assessment is completed, it is not suitable for the court to entertain a writ petition. Considering the facts of the case and the precedent cited, the court concluded that the petition should be dismissed as statutory alternative remedy under Section 246 of the Act was available to challenge the assessment order.

Judgment Summary:

The court noted that the show cause notice stage under Section 148 had passed, and the assessment proceedings had been completed with a final assessment order. The petitioner's failure to inform the department about the death of the original assessee was highlighted. The court emphasized that when a statutory remedy is available, a writ petition should not be entertained, except in exceptional circumstances. Given that the petitioner had an alternative statutory remedy under Section 246 of the Act to challenge the assessment order, the court dismissed the petition with liberty for the petitioner to pursue the statutory appeal. The court clarified that the time spent on the petition would not affect the calculation of any delay in filing the appeal. The petition was disposed of with no order as to costs.