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2020 (7) TMI 396 - AT - Income TaxValidity of reopening of assessment - notice u/s 148 on a dead person - HELD THAT - Hon ble High Court of Madras in Alamelu Verappan vs ITO 2018 (6) TMI 760 - MADRAS HIGH COURT after considering the decision of CIT Vs. Amarchand N.Shroff 1962 (10) TMI 51 - SUPREME COURT held that notice issued on dead person is illegal and the department cannot plead ignorance. Therefore, we hold that notice issued u/s 148 is invalid, hence, we quash the notice and hold that the subsequent assessment proceedings are void-ab-initio. - Decided in favour of assessee.
Issues Involved:
1. Validity of the notice issued under Section 148 of the Income Tax Act, 1961 on a deceased person. 2. Consequent assessment proceedings based on the invalid notice. Issue-wise Detailed Analysis: 1. Validity of the Notice Issued under Section 148 on a Deceased Person: The primary issue in this appeal concerns the validity of the notice issued under Section 148 of the Income Tax Act, 1961 on a deceased individual. The assessee, a retired government employee, passed away on 13.08.2010. The Assessing Officer (AO) issued a notice under Section 148 on 26.03.2014, unaware of the assessee's demise. The legal representative (L/R) of the deceased informed the AO about the death, but the AO proceeded to issue a notice under Section 142(1) to the legal heir without issuing a fresh notice under Section 148 to all legal heirs. The Tribunal examined the facts and legal precedents, including the decision in CIT Vs. Amarchand N.Shroff (1963 AIR 1448), which held that assessments cannot be made on a deceased person. The Tribunal found that the AO's action of issuing a notice under Section 148 on a deceased person was invalid. The Tribunal referred to the case of Late Tanguturi Venkata Subbayya (I.T.A. No.226/Viz/2018) and Aemala Venkateswara Rao (I.T.A. No.227/Viz/2017), where it was held that notices issued on deceased persons are invalid. The Tribunal also cited the decision of the Hon'ble Madras High Court in Alamelu Veerappan Vs. ITO, which reinforced that notices issued on deceased individuals are unenforceable. The Tribunal emphasized that as per Section 159 of the Act, proceedings must be initiated against legal heirs to treat them as deemed assessees. Any notice issued in the name of a deceased person is invalid and cannot be enforced in law. 2. Consequent Assessment Proceedings Based on the Invalid Notice: Since the notice under Section 148 was deemed invalid, the subsequent assessment proceedings were also considered void-ab-initio. The Tribunal annulled the assessment made under Section 144 r.w.s. 147, which included taxing long-term capital gains related to the sale of property. The Tribunal concluded that the notice issued under Section 148 on a deceased person was invalid, and therefore, the subsequent assessment proceedings were void. The appeal of the assessee was allowed, and the notice and assessment proceedings were quashed. Conclusion: The Tribunal's judgment highlights the importance of issuing valid notices under Section 148 to the correct legal representatives of a deceased person. The failure to do so renders the notice and subsequent assessment proceedings invalid. The appeal was allowed, and the notice and assessment were quashed, emphasizing the jurisdictional requirement of issuing notices to living persons or their legal representatives.
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