2020 (12) TMI 159 - AT - Income Tax

Validity of Reopening of assessment - notice issued to assessee as deceased - HELD THAT - As notice issued by the AO under section 148 is invalid notice because the same was issued in the name of the deceased assessee inspite of this fact that the factum of death of the assessee was duly intimated to the Department much prior to the issue of notice under section 148 of the Act in the name of the deceased assessee and the consequent Assessment Order is also invalid and the same is hereby quashed. - Decided in favour of assessee.

Issues:
1. Validity of assessment order under section 250 of the Act for Assessment Year 2008-09.
2. Notice issued under section 148 and section 143(2) of the Act in the name of a deceased person.
3. Applicability of judicial pronouncements on the validity of notices issued to deceased assessee.
4. Consequences of issuing notice to a deceased assessee.
5. Implications of invalid notice on the Assessment Order.
6. Decision on other grounds raised by the assessee.

Issue 1: Validity of assessment order under section 250 of the Act for Assessment Year 2008-09.

The appeal was filed against the order of the learned CIT(A)-3, Bengaluru, dated 18.11.2019, for Assessment Year 2008-09. The grounds raised by the assessee challenged the legality of the assessment order, claiming it to be against law, equity, and the facts of the case. Specific contentions included objections to the re-opening of assessment under section 143(3) r.w.s. 144, lack of independent satisfaction by the assessing officer, and errors in the assessment process. Additionally, issues related to capital gains, tax liability on agricultural land, and interest under sections 234 A and 234 C of the Income Tax Act were raised.

Issue 2: Notice issued under section 148 and section 143(2) of the Act in the name of a deceased person.

The primary contention revolved around the notices issued under section 148 and section 143(2) of the Act in the name of a deceased assessee, despite the Department being informed of the death. The assessee argued that such notices were invalid in law, citing judicial pronouncements to support their claim. The legal heir provided evidence of the deceased's death, including letters and a death certificate, to the Department. The Tribunal noted the Department's knowledge of the death and ruled that the notices issued in the deceased's name were invalid. The Tribunal relied on previous judgments to support the quashing of the Assessment Order due to the invalid notices.

Issue 3: Applicability of judicial pronouncements on the validity of notices issued to deceased assessee.

The Tribunal analyzed various judicial pronouncements cited by the assessee, emphasizing the invalidity of notices issued to deceased assessees. References were made to cases where notices issued to deceased individuals were deemed void-ab-initio, leading to the quashing of assessment orders. The Tribunal upheld the applicability of these judgments in the present case, highlighting the importance of following precedents favoring the assessee when assessing the validity of notices issued post the assessee's demise.

Issue 4: Consequences of issuing notice to a deceased assessee.

The Tribunal acknowledged the Department's awareness of the assessee's death before issuing the notices under section 148 and section 143(2) of the Act. Despite this knowledge, the AO proceeded with the notices in the deceased's name, leading to a challenge by the assessee on the grounds of invalidity. The Tribunal emphasized the significance of ensuring proper procedures and adherence to legal requirements, especially in cases involving deceased taxpayers, to prevent the invalidation of assessment orders due to procedural irregularities.

Issue 5: Implications of invalid notice on the Assessment Order.

The Tribunal, based on the invalid notices issued to the deceased assessee, concluded that the Assessment Order resulting from such notices was also invalid and consequently quashed the order. The Tribunal's decision to invalidate the Assessment Order was based on the principle that procedural errors, such as issuing notices to deceased individuals, render subsequent assessments void-ab-initio. This ruling highlights the critical importance of procedural compliance in tax assessments to maintain the integrity and legality of the process.

Issue 6: Decision on other grounds raised by the assessee.

Given the invalidation of the Assessment Order due to the notices issued in the deceased's name, the Tribunal deemed it unnecessary to adjudicate on the other grounds raised by the assessee. The quashing of the Assessment Order rendered further deliberation on additional issues moot, as the primary basis for the appeal's success rested on the procedural irregularities related to the notices issued to the deceased assessee.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, and the Tribunal's decision, focusing on the validity of the assessment order and the implications of issuing notices to a deceased assessee.

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