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2019 (8) TMI 517 - HC - Income TaxValidity of reopening of assessment u/s 147 - notice issued by the department u/s 148 to a dead person - HELD THAT - As decided in CHANDRESHBHAI JAYANTIBHAI PATEL VERSUS THE INCOME TAX OFFICER 2019 (1) TMI 353 - GUJARAT HIGH COURT in view of the provisions of section 159(2)(b) of the Act, it is permissible for the Assessing Officer to issue a fresh notice u/s 148 against the legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee. As noticed notice under section 148 which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the AO pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained - Decided in favour of assessee.
Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person. 2. Applicability of Section 292B of the Income Tax Act to cure defects in the notice. 3. Legal representative's role and obligation under Section 159 of the Income Tax Act. Issue-Wise Detailed Analysis: 1. Validity of Notice Issued to a Deceased Person: The primary issue was whether a notice under Section 148 of the Income Tax Act, 1961, issued to a deceased person, could be deemed valid. The petitioner, the legal heir of the deceased assessee, contended that the notice was invalid as it was issued after the death of the assessee. The court referred to the precedent set in Chandreshbhai Jayantibhai Patel vs. Income-tax Officer, where it was held that a notice issued to a dead person is invalid unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection. In this case, the petitioner had consistently objected to the notice and had not participated in the proceedings by filing a return of income. 2. Applicability of Section 292B to Cure Defects: The revenue argued that under Section 292B of the Income Tax Act, the notice would not become invalid merely because it was issued to a dead person, as it could be considered a procedural defect. The court examined the provisions of Section 292B, which state that no notice shall be invalid by reason of any mistake, defect, or omission if it is in substance and effect in conformity with or according to the intent and purpose of the Act. However, the court concluded that a notice under Section 148 is a jurisdictional notice, and a valid notice is a condition precedent for the Assessing Officer to assume jurisdiction. Since the petitioner did not waive the requirement of a valid notice and did not participate in the proceedings, the notice issued to the deceased could not be cured under Section 292B. 3. Legal Representative's Role and Obligation: The court analyzed Section 159 of the Income Tax Act, which deals with the liability of legal representatives. Section 159(2)(b) allows proceedings to be initiated against legal representatives if the deceased had survived. However, in this case, the notice was issued to the deceased, not the legal representative. The court emphasized that for the proceedings to be valid, the notice should have been issued to the legal representative. Since the petitioner objected to the notice and did not submit to the jurisdiction, the court held that the proceedings based on the invalid notice could not continue. Conclusion: The court allowed the writ petition, quashing the impugned notice dated 31.03.2019 issued under Section 148 of the Income Tax Act, 1961, and the subsequent order dated 02.07.2019 disposing of the objections. The court ruled that the notice issued to a deceased person is invalid, and without a valid notice, the Assessing Officer cannot assume jurisdiction under Section 147 of the Act. Consequently, all proceedings pursuant to the invalid notice were set aside. The rule was made absolute with no order as to costs.
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