2023 (11) TMI 1196 - HC - Income Tax

Reopening of assessment u/s 147 against dead person - obligation on the part of the legal representatives - HELD THAT - The notice issued in the name of the dead person is unenforceable in the eyes of law. See Savita Kapila Vs. Asstt. CIT 2020 (7) TMI 441 - DELHI HIGH COURT held that in the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department - Consequently, the legal heirs are under no statutory obligation to intimate the death of the assessee to the revenue The notice issued to a dead person for reopening of assessment of a dead person is null and void, this Court holds that the notice and all consequential proceedings arising therefrom in the name of the deceased assessee are not sustainable.

Summary

Issues involved:
The judgment involves challenging a notice under Section 148 of the Income Tax Act, 1961 and an order u/s 148A(d) for the assessment year 2018-19, issued in the name of a deceased assessee.

Summary of Judgment:

Issue 1: Validity of Notice under Section 148 of the Act
The petitioner challenged the notice issued under Section 148 of the Act in the name of a deceased assessee. The petitioner argued that such a notice is null and void as it should have been issued to the correct person who is alive. Citing precedent from the High Court of Gujarat, the court held that a notice under Section 148 against a dead person is invalid, affecting the jurisdiction of the Assessing Officer. Therefore, the reopening notice under Section 148 issued in the name of a dead assessee was deemed null and void.

Issue 2: Jurisdiction to Initiate Assessment Proceedings
The petitioner contended that if the Assessing Officer lacked jurisdiction to initiate assessment proceedings, subsequent orders would not cure the jurisdictional defect. Referring to a Supreme Court judgment, the court highlighted that when an executive authority acts without jurisdiction, the High Courts can issue orders to prevent unnecessary harassment. The court emphasized the importance of ensuring proper jurisdiction before proceeding with assessment.

Issue 3: Applicability of Section 159 of the Act
The respondent argued that Section 159 of the Act could apply to continue proceedings against legal heirs only if initiated when the assessee was alive. Citing a Madras High Court judgment, it was noted that Section 159 does not apply when proceedings are initiated after the assessee's death. The court upheld that Section 159 did not apply in the present case.

Conclusion:
The court found that the notice and all consequential proceedings in the name of the deceased assessee were not sustainable. Consequently, the impugned notice and order for the assessment year 2018-19 were quashed, and all related actions were prohibited. The petition was allowed with no order as to costs.