2022 (4) TMI 1185 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - notice u/s 142(1) upon the deceased assessee - HELD THAT - As the legal position as settled by this Court in the case of Chandreshbhai Jayantibhai Patel 2019 (1) TMI 353 - GUJARAT HIGH COURT is that this Court has drawn distinction between as to clause (a) of sub-section 2 of Section 159 and clause (b) of sub-section 2 of Section 159 of the Act. Clause (b) of sub-section 2 of Section 159 permits initiation of any proceedings, which could have been taken against the deceased through legal representative. However, in the case on hand, the impugned notice dated 31.03.2021 under Section 148 of the Act has been issued upon the deceased assessee, who had expired prior to the issuance of such notice. The case on hand does not fall under Clause (a) of sub-section 2 of Section 159 of the Act and in such circumstances, even the proceedings pursuant to such notices as sought to be initiated by the Assessing Officer cannot be continued upon the deceased assessee, more particularly, in light of legal dictum laid down in the case of Chandrashbhai Jayantibhai Patel (Supra) is followed in the case of Bipinbhai Bachuji 2019 (7) TMI 754 - GUJARAT HIGH COURT More particularly upon perusal of the contents of the objections cum reply filed by the writ applicant it transpires that the writ applicant has not surrendered to the jurisdiction of the Assessing Officer by submitting return in response to the impugned notices neither the jurisdictional Assessing Officer has issued notice upon writ applicant as legal representative representing estate of deceased assessee. Thus, we are of the view that the proceedings initiated by the Assessing Officer against the deceased assessee are not tenable in the eye of law and are required to be quashed and set aside. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act to a deceased person.
2. Applicability of Section 159 and Section 292B of the Income Tax Act in the context of notices issued to deceased persons.
3. Jurisdiction of the Assessing Officer in continuing proceedings based on invalid notices.

Issue-wise Detailed Analysis:

1. Validity of Notice Issued Under Section 148 to a Deceased Person:
The primary issue was whether a notice issued under Section 148 of the Income Tax Act to a deceased person is valid. The court noted that the original assessee had expired on 22.11.2020, and the impugned notice under Section 148 was issued on 31.03.2021, addressed to the deceased assessee. The court cited the case of Chandreshbhai Jayantibhai Patel Vs. Income Tax Officer, which established that a notice issued to a deceased person is invalid unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection. Since the legal representative in this case did not waive the requirement of notice under Section 148 and did not submit to the jurisdiction, the notice was deemed invalid.

2. Applicability of Section 159 and Section 292B of the Income Tax Act:
The court examined the provisions of Section 159, which deals with the liability of legal representatives, and Section 292B, which addresses procedural defects in notices. It was highlighted that Section 159(2)(b) allows proceedings to be initiated against the legal representative if the deceased had survived. However, since the notice under Section 148 was issued to the deceased and not to the legal representative, it was deemed invalid. The court also noted that Section 292B could not cure this defect as the notice was not in conformity with or according to the intent and purpose of the Act. The court distinguished this case from others where legal representatives had participated in the proceedings, emphasizing that in this case, the legal representative had consistently objected to the validity of the notice.

3. Jurisdiction of the Assessing Officer:
The court concluded that the Assessing Officer did not have the jurisdiction to continue proceedings based on an invalid notice. The legal representative had not submitted to the jurisdiction by filing a return in response to the notice. Therefore, the proceedings initiated by the Assessing Officer against the deceased assessee were not tenable in the eye of law and were required to be quashed and set aside.

Conclusion:
The court allowed the writ application, quashing the impugned notices and terminating the consequential proceedings. The judgment emphasized that notices issued to deceased persons without proper issuance to legal representatives are invalid and do not confer jurisdiction upon the Assessing Officer.