2020 (2) TMI 994 - HC - Income Tax

Reopening of assessment - notice issued in the name of the dead person - HELD THAT - In Sumit Balkrishna Gupta 2019 (2) TMI 1209 - BOMBAY HIGH COURT the Division Bench of this Court upon considering several other decisions has held that issue of notice of reopening the income in the name of the of the deceased assessee and after considering the same, came to the conclusion that the notice issued in the name of the dead person for reopening of assessment is null and void. This Court has held that the issue of the Notice under Section 148 of the IT 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 the correct person. This requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent. Thus we quash the impugned Notice - Decided in favour of assessee.

Summary

Issues:
Challenge to Notice dated 26.3.2019, Show Cause Notice dated 9.12.2019, and Letter dated 9.12.2019 under Section 148 of the Income Tax Act, 1961 for reopening the Assessment for the Year 2012 - 2013 in respect of a deceased assessee.

Analysis:
The High Court considered the challenge in the petition regarding the impugned notices issued to a deceased person. The Court noted that the assessee, Mrs. Bhadravati Ranjit Canji, had passed away on 3.7.2017, making it evident that the notices were sent to a deceased individual. Citing the case of Sumit Balkrishna Gupta Vs. Assistant Commissioner of Income-Tax, the Court emphasized that issuing a notice in the name of a deceased person for reopening assessment renders the notice null and void. The Court highlighted that the issuance of notice under Section 148 of the IT Act is crucial for reopening assessment, and it must be directed to the correct person, not a deceased individual. This requirement was deemed not merely procedural but a condition precedent for jurisdiction to reopen an assessment.

Subsequently, in line with the decision in the Sumit Balkrishna Gupta case, the High Court quashed the impugned Notice dated 26.3.2019, Show Cause Notice dated 9.12.2019, and Letter dated 9.12.2019. However, the Court clarified that this order does not prevent the Revenue from issuing a fresh notice for reassessment in compliance with the law, provided the requirements of Sections 147/148 of the IT Act, including the limitation requirement, are met. The Court made the Rule absolute in the aforementioned terms, with no order as to costs.

This judgment underscores the importance of ensuring that legal notices for reopening assessments are issued to the correct party and not to deceased individuals. It establishes that such a procedural requirement is a fundamental condition for acquiring jurisdiction to reopen an assessment under the Income Tax Act, emphasizing the need for strict adherence to legal procedures in such matters.