2024 (9) TMI 1529 - HC - Income Tax

Assessment against deceased person - as argued despite having been informed that the assessee had expired, respondent have proceeded to initiate action under Section 148 of the Act in the name of the deceased assessee - HELD THAT - The requirement of issuing notice in the name of a right person and not to a dead person is not merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Even though, the initial notice under Section 148 was issued during the lifetime of the assessee, the eventual reassessment action was commenced on the basis of notice under Section 148A (b) which resulted in issuance of impugned notice under Section 148 - Admittedly, both the impugned notices are in the name of the deceased person. Since the petitioner had already informed the Department about the death of the deceased, his participation in the reassessment proceedings cannot be regarded as waiver or submitting to the jurisdiction of the Assessing Officer without objection. The notice under Section 148A (b) dated 26.05.2022 therefore suffers from a fundamental jurisdictional error, having been issued in the name of a dead person. Not only this, the proceedings initiated consequent to such notice have also been proposed in the name of a dead person. No steps were taken to bring the legal heirs of the deceased on record even at the time of issuance of final notice under Section 148 of the Act dated 30.07.2022. Reassessment proceeding set aside - Decided in favour of assessee.

Summary

Issues:
Validity of notice issued against a deceased person for reassessment under Section 148 of the Income Tax Act, 1961.

Detailed Analysis:

1. The petitioner, as the legal heir of the deceased assessee, challenged the notice under Section 148A (b), impugned order under Section 148A (d), and notice under Section 148 for the Assessment Year 2015-16. The respondent initiated proceedings even after being informed of the death of the assessee.

2. The respondent argued that the proceedings were initiated while the assessee was alive and continued with the legal heirs participating in the proceedings. The respondent claimed that the notices were valid as they were issued initially when the assessee was alive.

3. The High Court referred to previous judgments, including Savita Kapila v. Assistant Commissioner of Income Tax, which emphasized that issuing a notice to the correct person is a condition precedent for validity. Notices against deceased persons are considered invalid unless the legal representative submits without objection.

4. The Court also cited cases like Sangeeta Goyal v. Commissioner of Customs and Meenu Gupta v. Assistant Commissioner of Income Tax, where similar issues were addressed, leading to the setting aside of reassessment proceedings against deceased persons.

5. Despite the initial notice being issued during the assessee's lifetime, subsequent actions were based on notices issued after the death of the assessee. The Court found that the notices issued in the name of the deceased person were fundamentally flawed and lacked jurisdictional validity.

6. The Court concluded that the impugned notices under Section 148A (b) and 148 for the AY 2015-16 could not be sustained. The actions taken by the respondent were deemed invalid, and the petition was allowed accordingly.

This detailed analysis highlights the key arguments, legal principles, and judgments considered by the Court in deciding the validity of the notices issued against a deceased person for reassessment under the Income Tax Act, 1961.