2019 (2) TMI 1156 - HC - Income Tax

Notice issued in the name of the dead person - validity of assessment - curable defect 292B - Held that - Issuing of notice under Section 143(2) of the Act which alone gives jurisdiction to the Assessing Officer to proceed with scrutiny assessment under Section 143(3) of the Act. The contention of the Revenue that in any view of the matter, Section 292B of the Act would apply to the facts of this case is not acceptable. A notice issued u/s 143(2) which gives jurisdiction to complete the assessment having been issued in the name of the dead person is non-est in law as it is not the saved by Section 292B of the Act. The issue of a notice under Section 143(2) of the Act so as to take up the assessment for scrutiny is not a procedural but a substantive provision. Therefore, where a notice is issued in the name of a wrong person, there would be no issuing of notice as required under the Act. In such cases, as in the case of Section 148 of the Act, the issuing of a notice in the name of the wrong person is not a procedural and / or clerical error. Therefore, being a substantive defect, the notice cannot be saved by Section 292B of the Act. - Decided in favour of assessee.

Summary

Issues:
Challenge to notice under Section 143(2) of the Income Tax Act, 1961 issued in the name of deceased assessee for assessment year 2016-17 and rejection of preliminary objection by Assessing Officer.

Analysis:
Issue 1: Jurisdiction based on notice issued in the name of deceased assessee
The petitioner, as the legal heir of the deceased assessee, challenged the notice dated 31.7.2017 issued under Section 143(2) of the Act in the name of the deceased, asserting it was null and void. The petitioner argued that the notice did not confer jurisdiction on the Assessing Officer for scrutiny assessment under Section 143(3) of the Act. The petitioner contended that being registered as the legal heir prior to the notice issuance, the Department was aware of the petitioner's status. The High Court agreed, emphasizing that a notice in the name of a wrong person does not grant jurisdiction for scrutiny assessment. Citing relevant case laws, the court held that Section 292B of the Act would not cure the defect of issuing a notice in the deceased's name, as it is a substantive defect, not a procedural one.

Issue 2: Relevance of previous assessment orders
The court noted that for earlier assessment years, the Revenue had passed orders in the name of the petitioner as the legal representative of the deceased assessee. This fact, along with the petitioner's registration as the legal heir, indicated that the Department was aware of the petitioner's status. Consequently, the court found no justification for issuing the impugned notice in the deceased's name, emphasizing that a notice in the wrong person's name does not enable the Assessing Officer to proceed with scrutiny assessment under Section 143(3) of the Act.

Conclusion:
In conclusion, the High Court quashed the impugned notice dated 31.7.2017 and the order dated 19.11.2018, ruling in favor of the petitioner. The court held that the notice issued in the name of the deceased assessee was nonest in law and did not confer jurisdiction on the Assessing Officer for scrutiny assessment. The court's decision was supported by legal precedents emphasizing the importance of issuing notices correctly to establish jurisdiction for assessment proceedings.