2025 (2) TMI 868 - HC - Income Tax

Reopening of assessment u/s 147 in the name of deceased - HELD THAT - A decision in the case of Meet Lalwani 2023 (11) TMI 1196 - MADHYA PRADESH HIGH COURT wherein it is held that issuance of notice u/s 148 of the Act in the name of deceased cannot be sustained. The issue of notice under Section 148 of the Act is a foundation for reopening of assessment. The sine qua non for acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of correct person meaning thereby the same should not have been issued in the name of dead person. Admittedly the provisions of Section 159A of the Act of 1961 has not been taken into consideration in the case of Meet Lalwani Supra This Court has no hesitation in quashing the impugned orders passed by respondent no.2. Effect of Section 159 has not been considered in the case of Meet Lalwani (supra) the respondents/Department would be at liberty to proceed against the petitioner in accordance with law.

Summary

The petition under Article 226 of the Constitution of India was filed by the petitioner challenging the legality, validity, and propriety of assessment orders passed by the respondents against a deceased person under the Income Tax Act, 1961. The petitioner contended that despite informing the department about the death of his father during the assessment proceedings, no fresh notice was issued in the name of the petitioner as the legal heir. The petitioner argued that proceedings under section 142(1) cannot continue against a deceased person and that the effect of section 159 of the Act was not considered in the orders. The petitioner relied on a previous decision of a Division Bench of the High Court in Meet Lalwani v. Income Tax Officer, which held that a notice issued in the name of a dead person is unenforceable in the eyes of the law.The Revenue's counsel opposed the petition, arguing that the judgment in Meet Lalwani's case was distinguishable and not applicable to the present case.The Court considered the previous decision in Meet Lalwani's case, where it was held that issuing a notice under Section 148 of the Act in the name of a deceased person is not sustainable. The Court emphasized that the issuance of a notice under Section 148 is essential for reopening an assessment, and such notice should be issued in the name of the correct person, not a deceased individual. The Court noted that Section 159 A of the Income Tax Act was not considered in Meet Lalwani's case.Based on the precedent set in Meet Lalwani's case, the Court quashed the impugned assessment orders passed by the respondents against the deceased person. However, the Court highlighted that the effect of Section 159 of the Act was not addressed in Meet Lalwani's case. Therefore, the respondents were permitted to proceed against the petitioner in accordance with the law.Ultimately, the Court allowed the petition to the extent indicated above and did not award any costs.In summary, the Court relied on the precedent established in a previous case to quash the assessment orders issued against a deceased person due to the incorrect issuance of notices. The Court emphasized the importance of issuing notices in the name of the correct person and allowed the respondents to proceed against the petitioner in compliance with the law.