2023 (6) TMI 1288 - HC - Income Tax

Reopening of assessment in the name of deceased assessee - Whether a curable defect u/s 292B? - HELD THAT - The impugned notice for reopening the assessment was issued on a dead person. There are several judgments of different High Courts holding that the notice issued on a dead person or reopening of assessment of a dead person is null and void in law and the requirement of issuing a notice to a correct person is not merely a procedural requirement but a condition precedent for a notice to be valid in law. In the case of Principal Commissioner of Income Tax, New Delhi vs Maruti Suzuki India Ltd. 2019 (7) TMI 1449 - SUPREME COURT the Apex Court has held that the notice issued and the order passed in the name of an old entity is bad in law and that such error was not curable u/s 292B of the Act as the same constitutes a substantive illegality and not a mere procedural violation. This Court holds that the notice and all consequential proceedings in the name of a deceased assessee are null and void - Decided in favour of assessee.

Summary

Issues involved:
The judgment involves issues related to the legality of issuing a notice for reopening assessment on a deceased person under the Income Tax Act, 1961.

Facts:
The petitioner, as the legal heir of the deceased assessee, challenged the notice issued under section 148A(b) of the Act and subsequent proceedings. The deceased had filed her income tax return and the petitioner had been approved as the legal heir. Despite the awareness of the death of the assessee, the respondent issued notices in the name of the deceased, leading to the present petition.

Arguments:
The petitioner contended that the notices issued on the deceased were improper and that the respondent should have abstained from such actions. The respondent argued that the petitioner had not challenged the previous intimation order and had not fulfilled certain requirements to register as the legal heir, suggesting that the petitioner should seek remedy before the Assessing Officer.

Judgment:
The court noted that issuing notices on a deceased person is null and void, citing precedents from different High Courts and the Supreme Court. Referring to the law, the court emphasized that issuing a notice to the correct person is not just procedural but a condition precedent for validity. Considering the circumstances and the evolving ITBA system, the court held that the notices and proceedings on the deceased assessee were invalid. Consequently, the impugned notices and orders were quashed, and further actions were prohibited. The petition was allowed with no costs.

Conclusion:
The court's decision was based on the principle that notices on deceased individuals are legally invalid, emphasizing the importance of adhering to legal requirements for issuing notices under the Income Tax Act. The judgment aimed to uphold the rule of law and prevent unnecessary litigation by ensuring compliance with established legal principles.