2020 (9) TMI 89 - AT - Income Tax

Reassessment u/s 147 - notice issued u/s 148 against the deceased person - whether notice under 148 has been issued and served in the name of legal heirs of the assessee? - HELD THAT - There is no subsequent notice u/s 148 which was issued by the Assessing Officer on the legal heirs of the deceased assessee and therefore, the provisions of section 159 cannot be invoked in the instant case. In any case, the limitation for issue of notice u/s 148 had expired on 31.03.2017 and beyond such limitation period, no notice can be issued in the name of the legal Heirs. It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Consequently, the present reassessment proceedings initiated by issuance of notice in the name of the deceased assessee and consequent reassessment proceedings is hereby quashed for want of jurisdiction. - Decided in favour of assessee.

Issues Involved:
1. Initiation of reassessment proceedings under Section 147.
2. Validity of notice under Section 148 issued to a deceased assessee.
3. Prior approval from superior authority for reassessment.
4. Passing of ex-parte order under Section 144.
5. Vagueness of reasons recorded for reassessment.
6. Addition of ?3,00,000 as unexplained income.
7. Opportunity of hearing to legal heirs.
8. Non-provision of details of cash deposits to legal heirs.

Issue-wise Detailed Analysis:

1. Initiation of Reassessment Proceedings under Section 147:
The assessee challenged the initiation of reassessment proceedings under Section 147, arguing that the Assessing Officer (AO) grossly erred in initiating the proceedings. The Tribunal noted that the reassessment proceedings were initiated based on information about cash deposits in the assessee's bank account.

2. Validity of Notice under Section 148 Issued to a Deceased Assessee:
The legal heirs of the deceased assessee contended that the notice under Section 148 was issued to the deceased, making it invalid and void ab initio. The Tribunal agreed, citing that the notice was issued on 31.03.2017, while the assessee had expired on 10.10.2015. The Tribunal referenced several legal precedents, including decisions from the Hon’ble Madras High Court and Hon’ble Delhi High Court, which held that a notice issued to a deceased person is a nullity. The Tribunal concluded that the reassessment proceedings initiated by issuing a notice to the deceased assessee were void for want of jurisdiction.

3. Prior Approval from Superior Authority for Reassessment:
The assessee argued that the AO did not take prior approval from a superior authority before initiating the reassessment proceedings, rendering the proceedings void. The Tribunal did not find specific evidence in the order regarding this claim but emphasized that the invalidity of the notice itself rendered the reassessment proceedings void.

4. Passing of Ex-parte Order under Section 144:
The assessee contended that the AO erred in passing an ex-parte order under Section 144. The Tribunal noted that the AO proceeded ex-parte due to non-appearance by the assessee or legal heirs. However, the Tribunal’s decision to quash the reassessment proceedings made this issue moot.

5. Vagueness of Reasons Recorded for Reassessment:
The assessee claimed that the reasons recorded for reassessment were vague, citing a discrepancy between the recorded reason of ?30,00,000 in cash deposits and the actual assessment of ?3,00,000. The Tribunal acknowledged the discrepancy but focused on the invalidity of the notice under Section 148 as the primary reason to quash the reassessment proceedings.

6. Addition of ?3,00,000 as Unexplained Income:
The assessee challenged the addition of ?3,00,000 as unexplained income. The Tribunal did not delve into this issue in detail, as the invalidity of the reassessment proceedings rendered the addition moot.

7. Opportunity of Hearing to Legal Heirs:
The legal heirs argued that they were not given a proper opportunity of hearing. The Tribunal noted that the AO did not issue a subsequent notice under Section 148 to the legal heirs, which was a mandatory requirement, thus supporting the claim of the legal heirs.

8. Non-provision of Details of Cash Deposits to Legal Heirs:
The legal heirs contended that they were not provided with details of the cash deposits despite a written request. The Tribunal did not address this issue extensively, as the quashing of the reassessment proceedings due to the invalid notice made this issue academic.

Conclusion:
The Tribunal quashed the reassessment proceedings for want of jurisdiction, as the notice under Section 148 was issued to a deceased person. The Tribunal cited various legal precedents to support its decision, emphasizing that a notice issued to a deceased person is a nullity and cannot confer jurisdiction for reassessment. Consequently, all other grounds raised by the assessee became academic and were dismissed as infructuous.

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