2024 (6) TMI 1372 - HC - Income Tax

Validity of Reassessment proceedings against dead person - HELD THAT - It would be apt to take note of decision in case of Pravinchandra A Shah 2023 (8) TMI 385 - GUJARAT HIGH COURT wherein as after referring to various provisions of the Income Tax Act, 1961 as well as the decisions of various High Courts as well as Hon ble Supreme Court has held that the proceedings initiated by the respondent authority against a dead person as well as the impugned orders passed by it, is nullity. Thus the proceedings were concluded against a dead person which has no legal legs to stand. Accordingly, the present petitions are allowed.

Summary

Issues:
Challenge to impugned orders under sections 271(1)(c) and 144 read with section 147 of the Income Tax Act, 1961 for Assessment Year 2011-2012 on the ground of proceedings against a deceased person.

Analysis:
In Special Civil Application No. 11756 of 2020, the petitioner contested the order dated 30.05.2019 by the Assistant Commissioner of Income Tax, challenging the assessment under section 271(1)(c) for Assessment Year 2011-2012. Simultaneously, in Special Civil Application No. 12196 of 2020, the petitioner challenged the order dated 26.11.2018 by the Assistant Commissioner of Income Tax (OSD) under section 144 read with section 147 for the same assessment year, citing that the notices and orders were issued against a deceased individual.

The petitioner, as the heir of the deceased, argued that the reassessment proceedings and subsequent orders were conducted against a dead person, Mr. Vijaykumar Ambalal Patel, who passed away on 27.05.2018. Despite notices being allegedly served through the postal department, the petitioner claimed non-receipt of any notices, leading to no participation in the reassessment process. Consequently, an assessment order was issued on 26.11.2018, adding Rs. 22,67,500 against the deceased individual.

Penalty proceedings were initiated against the deceased by the respondent through a notice dated 27.11.2018, which the petitioner became aware of only upon receiving a letter on 07.02.2020. The petitioner contended that the proceedings against a deceased person were legally untenable, as emphasized by the petitioner's counsel, citing a previous judgment by a co-ordinate Bench of the Court in a similar case.

The respondent's representative did not contest that the proceedings were conducted against a deceased person, nor did they challenge the legal position established in the aforementioned judgment. Referring to the precedent, the Court held that proceedings against a deceased individual and the subsequent orders were null and void. Consequently, the Court quashed and set aside the impugned orders dated 30.05.2019 and 26.11.2018, pertaining to the Assessment Year 2011-2012, in favor of the petitioner. The Court disposed of both petitions accordingly.