2024 (12) TMI 1432 - HC - Income Tax

Validity of reassessment Notice issued in the name of a dead person - whether notices issued u/s 148A (b) and 148 to a deceasead person are sufficient to continue the proceedings thereafter with the legal representatives of the deceased assessee if the prescribed period of limitation for issuing such notice has expired vis-a-vis such LR? - HELD THAT - Notices issued u/s 148A (b) and 148 of the Act in the name of a dead person are invalid and non-est in the eye of law. It is a nullity and not a mere irregularity which could be cured. It is true that, on the receipt of the above said notices, the legal heirs of the deceased Naringaparambail Bhaskaran/appellants herein appeared before the assessing authority. However, that by itself would not change the situation. We are of the opinion that the consent of the parties cannot confer jurisdiction to the assessing authority for initiation of an action which is otherwise illegal and non-est .Decided in favour of assessee.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the issuance of notices under Sections 148A(b) and 148 of the Income Tax Act to a deceased person is valid and sufficient to continue assessment proceedings with the legal representatives of the deceased.
Whether such notices, if issued after the prescribed period of limitation, are a nullity or a mere irregularity that can be cured.
Whether the participation of legal heirs in proceedings initiated against a deceased person estops them from challenging the jurisdiction of the assessing authority.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of Notices Issued to a Deceased Person

Relevant Legal Framework and Precedents: The court considered the legal framework under Sections 148A(b) and 148 of the Income Tax Act, which pertain to the issuance of notices for reassessment. Precedents from cases such as Chandreshbhai Jayantibhai Patel v. Income Tax Officer and Vipin Walia vs. Income Tax Officer were analyzed, establishing that notices issued to a deceased person are invalid.
Court's Interpretation and Reasoning: The court reasoned that a notice issued to a non-existent person is null and void, and any consequent proceedings are equally tainted. The court emphasized that jurisdiction cannot be conferred by consent of the parties in such cases.
Key Evidence and Findings: The court found that notices were issued to the deceased assessee after his death and that the legal heirs had informed the assessing authority of the death.
Application of Law to Facts: Applying the legal principles from precedents, the court concluded that the notices issued were invalid and could not confer jurisdiction to the assessing authority.
Treatment of Competing Arguments: The court rejected the Revenue's argument that the legal heirs' participation cured the defect, holding that such participation does not validate an otherwise null proceeding.
Conclusions: The court concluded that the notices and subsequent proceedings were nullities and not mere irregularities.

Issue 2: Effect of Limitation Period on Notices

Relevant Legal Framework and Precedents: The court considered the limitation period for issuing notices under the Act and the implications of exceeding this period, referencing the decision in Vipin Walia vs. Income Tax Officer.
Court's Interpretation and Reasoning: The court interpreted that issuing a notice after the limitation period is a plain illegality, not a mere procedural irregularity.
Key Evidence and Findings: The court noted that the limitation period for issuing a fresh notice to the legal representatives had expired by the time the issue was raised.
Application of Law to Facts: The court applied the precedent to determine that the expired limitation period rendered the notices and proceedings void.
Treatment of Competing Arguments: The Revenue's argument that the limitation issue was a curable irregularity was dismissed as inconsistent with established legal principles.
Conclusions: The court concluded that the expired limitation period rendered the notices and proceedings null and void.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: The court stated, "The precedents referred above would make it amply clear that the notices issued under Sections 148A (b) and 148 of the Act in the name of a dead person are invalid and 'non-est' in the eye of law."
Core Principles Established: Notices issued to a deceased person are nullities, not mere irregularities. Jurisdiction cannot be conferred by participation of legal heirs. The limitation period for issuing notices is strict and cannot be circumvented by procedural participation.
Final Determinations on Each Issue: The court set aside the judgment of the learned Single Judge, quashed the notices and orders issued under Sections 148A(b) and 148, and allowed the writ petition, concluding that the assessment proceedings were unsustainable.

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