2022 (1) TMI 844 - HC - Income Tax

Validity of reopening of assessment u/s 147 - notices and proceedings initiated against a person who had died prior to the issuance of notice - HELD THAT - The issue of validity of a notice and proceedings held subsequent thereto against a dead person is no longer res integra.See Savita Kapila case 2020 (7) TMI 441 - DELHI HIGH COURT In the present case also as the notice under Section 148 of the Act was issued against a dead person the same is null and void and all consequent proceedings/orders including the assessment order and the subsequent notices being equally tainted are liable to be set aside. - Decided in favour of assessee.

Summary

Issues:
Validity of notice and proceedings against a deceased person under Section 148 of the Income Tax Act, 1961.

Analysis:
The petitioner challenged the notice and proceedings initiated against a deceased person, claiming they were void ab initio. The respondent argued that the notices were served at the address available in the ITD database and the fact of death was not communicated to them. The court referred to previous judgments and held that the jurisdictional requirement under Section 148 was not fulfilled as the notice was issued to a dead person. The court emphasized that the notice should be issued to the correct person and not to a deceased individual, making it a condition precedent for the notice to be valid in law.

The court further clarified that Section 159 of the Act applies when proceedings are initiated against the assessee when alive, and legal representatives step in after the death. Since this was not the case here, Section 159 did not apply. It was highlighted that there is no statutory obligation for legal heirs to inform the tax department of the assessee's death. The court reasoned that the absence of a statutory provision makes it challenging to impose such a duty on legal representatives, especially in cases of estrangement or charitable bequests.

Regarding the applicability of Section 292B of the Act, the court held it to be inapplicable in cases where notices are issued to deceased individuals. Citing previous judgments, the court stated that Section 292BB applies to an assessee and not to legal representatives. In this case, one of the legal heirs had not cooperated in the proceedings, filed returns, or submitted to the jurisdiction of the Assessing Officer, leading to the conclusion that Section 292BB did not apply to legal representatives.

In alignment with previous judgments, the court declared the notice issued against the deceased person as null and void, leading to the setting aside of all consequent proceedings, including assessment orders and subsequent notices. As a result, the impugned notice dated 30.03.2019 under Section 148 of the Act was set aside, and the petition was allowed with no costs imposed.