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TMI Blog2021 (3) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... rvations of the Supreme Court as in the case on hand also the Revenue wants to proceed against the legal heir of the deceased by issuing a notice under Section 153C of the Income Tax Act, 1961 (for short, 'the Act 1961'). Such notice is issued to a dead person. 2. Since the issues raised in all the captioned writ-applications are the same and the assessee is also the same, those were taken up for hearing analogously and are being disposed of by this common judgment and order. 3. For the sake of convenience, the Special Civil Application No.22441 of 2019 is treated as the lead matter. 4. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs : "(A) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ, direction or order to quash and set aside the impugned notice dated 29.03.2019 under Section 153C annexed at Annexure-A and with preliminary order dated 16.10.2019 annexed hereto at Annexure-C for proceeding and completing re-assessment proceedings. (B) Pending admission, hearing and disposal of this petition, ad-interim relief be granted and the respondent be ordered to restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised within the 30 days from the date of receipt of the notice under question as per section 124(3)(c) of the I.T. Act, 1961 i.e. notice was issued and served electronically on 29.03.2019 and the same was sent by post on 29.03.2019 as well and accordingly, the due date for filing objection was 28.04.2019. b. The department had not been informed of the demise of your father. (if so, please provide the copy of the same). c. No any legal heir have been registered yet with this PAN hold by your late father. d. No application for PAN surrender have been submitted to the department. e. Your father expired on 23.04.2017. However, as per income-tax records ITRs for A.Y. 2017-18, 2018-19 and 2019-20 were filed and the declared income as well viz : A.Y. Date of filing ITR Gross Total Income Disclosed 2017-18 31.03.2018 8,48,725/- 2018-19 31.08.2018 5,18,748/- 2019-20 09.09.2019 4,14,956/- The above returns were filed with the Name : BHUPENDRA BHIKHALAL DESAI. There was no any sign of late Bhupendra Bhikhalal Desai nor any name of the legal heir was mentioned. (Copy enclosed). Further it is also observed that you have claimed for deduction under chapter VIA for A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to show cause why the said amounts should not be added to your total income as per law by passing an ex-parte order. 5. Your submission shall be corroborated with the complete set evidences and this notice shall be considered your last opportunity. Please submit the details/explanation along with the complete set of evidence on or before 11/12/2019 at 01:00 P.M. Please note that failing to furnish/submit the details or explanation case will be decided as per materials available on record and the said amount will be added to the total income." 9. In such circumstances referred to above, the writ-applicant is here before this Court with the present writ-application. 10. Mr.Darshan Patel, the learned counsel appearing for the writ-applicant would submit that Shri Bhupendrabhai Desai having passed away way back on 28th April 2017, a notice under Section 153C of the Act could not have been issued in the year 2019 for the Assessment Year 2011-12 against a dead person. Mr.Patel would submit that the notice served for the purpose of re-assessment to a dead person is an invalid notice and the proceedings pursuant thereto would be void-ab-initio. In such circumstances referred to above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided that in a case referred to in sub-clause (ii) or subclause (iv), the person verifying the return holds a valid power of attorney from the individual to do so, which shall be attached to the return." 14. According to Mr.Bhatt, Sushilaben could not have verified the returns as she does not fall within any of the categories as prescribed in clause (a)(i) to (iv) respectively of Section 140 of the Act. 15. Mr.Bhatt, thereafter, invited the attention of this Court to Section 153C of the Act. Section 153C(1) of the Act reads thus : "153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,-- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment, whichever is earlier." 19. Relying on the aforesaid provision, Mr.Bhatt would submit that the legal heir of late Bhupendrabhai Desai cannot call in question the jurisdiction of the Assessing Officer in issuing the notice under Section 153C of the Act as the action could be said to have been taken under Section 132 of the Act after the expiry of period of one month from the date of the notice under Section 153C of the Act. 20. Mr.Bhatt, in support of his aforesaid submissions, has placed reliance on a decision of the Supreme Court in the case of Principal Commissioner of Income-tax, Mumbai vs. I-Ven Interactive Ltd., reported in (2019) 110 taxmann.com 332 (SC). ANALYSIS : 21. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the proceedings initiated by the Assessing Officer pursuant to the notice issued under Section 153C of the Act to a dead person are sustainable in law. 22. A Coordinate Bench of this Court, in the case of Chandreshbhai Jayantibhai Patel vs. Income Tax Officer, (2019) 101 taxmann.com 362 (Gujarat), had the occasion to consider a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59 is attracted, the notice was required to be issued in the name of the heirs of the deceased assessee. Mr. Dave submitted that the aforesaid decision would be squarely applicable to the facts of the present case and that the impugned notice dated 28.03.2018 issued under section 148 of the Act having been issued against a dead person as well as the subsequent notices issued pursuant thereto, are invalid and are, therefore, required to be quashed and set aside. 5.2 The learned advocate for the petitioner also placed reliance upon the decision of the Madras High Court in the case of Alamelu Veerappan v. Income Tax Officer, Noncorporate Ward-2(2), Chennai, (2018) 257 Taxman 72 (Madras), wherein the court held thus: "16. The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the Revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. In my considered view, the answer to the question should be definitely against the Revenue. 17. This Court supports such a conclusion with the following reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the notice under section 148 of the Act in his name, which was duly received by the petitioner who is the heir and legal representative of the deceased and hence, there is due service of such notice. Reference was made to sub-section (7) of section 2 of the Act, which defines "assessee", to submit that the same includes every person who is deemed to be an assessee under any provision of the Act. Referring to section 159 of the Act, it was pointed out that by virtue of sub-section (3) thereof, the legal representative of the deceased shall, for the purposes of the Act, be deemed to be an assessee. It was submitted that in view of sub-section (2) of section 159, for the purpose of making an assessment including reassessment under section 147 of the Act of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1) thereof, any proceeding taken against the deceased shall be deemed to have been taken against the legal representative, and therefore, the proceedings undertaken against the petitioner are legal and valid. It was submitted that therefore, under section 159(2) (b) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present writ petition, the aforesaid ratio is a complete answer to the contention raised on validity of the notice under section 147/148 of the Act as it was addressed to the erstwhile company and not to the limited liability partnership. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated April 11, 2017. They had objected to the notice being issued in the name of the company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused." 6.5 It was pointed out that the above decision of the Delhi High Court came to be challenged before the Supreme Court in Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, [2018] 92 taxman.com 93 (SC), wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer without notice to all the legal representatives are not null and void in law, but are merely irregular/defective proceedings which can be set right by remitting the matters to the Income Tax Officer for making fresh assessments with notice to all legal representatives. 6.7 Reliance was placed upon the decision of this court in the case of Commissioner of Income Tax v. Sumantbhai C. Munshaw, (1981) 128 ITR 142, wherein though the notice was issued to the deceased person, the proceeding was continued against the legal representative who participated in the proceeding and also filed return of income without raising any objection as to the validity of the assessment proceedings. The legal representative had, therefore, submitted to the jurisdiction of the Assessing Officer. The court held that if the legal representative is present before the taxing authority in some capacity or voluntarily appears in the proceeding without service of notice or upon service of notice not addressed to him but to the deceased assessee and does not object to the continuance of the proceeding against the dead person and is heard by the Income Tax Officer in regard to the tax liability of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, to submit that the proceedings are required to be initiated against a legal representative and not against the deceased and, therefore, the notices issued to the dead person are invalid. Reliance was placed upon the decision of this court in Jaydeep Kumar Dhirajlal Thakkar v. Income Tax Officer, (2018) 401 ITR 302 (Guj.) and Vipin Walia v. Income Tax Officer, (2016) 381 ITR 19 (Delhi). 9. Thereafter, by a notice dated 03.08.2018 issued under section 142(1) of the Act, the respondent called upon the petitioner as legal heir of deceased Shri Jayantilal Harilal Patel to furnish the documents mentioned therein. In the annexure thereto, the petitioner is called upon to show cause as to why penalty proceedings under section 217F of the Act should not be initiated in his case as he had not furnished return of income in response to the notice under section 148 of the Act and stating that this may be treated as notice under section 142(1) read with section 129 of the Income Tax Act, 1961. 10. By an order dated 14.08.2018, the respondent disposed of the objections raised by the petitioner stating that the notice under section 148 of the Act was issued in the name of the deceased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alidity of the impugned notice and did not submit to the jurisdiction of the Assessing Officer by filing a return of income, but kept on objecting to the continuation of the assessment proceedings pursuant to the impugned notice. The Assessing Officer, however, instead of taking corrective steps under section 292B of the Act and issuing notice to the heirs and legal representatives, insisted on continuing with the proceedings pursuant to the impugned notice which was issued in the name of a dead person. Since strong reliance has been placed by the learned counsel for the respondent on the provisions of section 2(7) and 2(29) read with sections 159 and 292B of the Act, reference may be made to the said provisions, which read as under: "Section 2(7) "assessee" means a person by whom any tax or any other sum of money is payable under this Act, and includes - (a) every person in respect of whom any proceeding under the Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person; (b) every person w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." 13. Thus, the expression "assessee" includes every person who is deemed to be an assessee under any provision of the Act. Sub-section (3) of section 159 of the Act, postulates that the legal representative of the deceased shall, for the purposes of the Act, be deemed to be an assessee. Subsection (2) of section 159 of the Act says that for the purpose of making an assessment (including an assessment, reassessment or re-computation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1), - (a) any proceeding taken against the decea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Supreme Court as well as the High Courts for contending that the proceedings would not be null and void merely because the notice has been issued against a dead person as the legal representative had received the notice and has objected to the validity of the notice and further continuation of the proceedings. In the opinion of this court, here lies the distinction between those cases and the present case. In the relied upon cases, the legal representative, in response to the impugned notice, filed return of income and participated in the proceeding and then raised an objection to the validity of the proceeding and, therefore, the court held that this was a case of waiver and that a technical defect can be waived; whereas in this case, right from the inception the petitioner has objected to the validity of the notice and thereafter to the continuation of the proceeding and has at no point of time participated in the proceeding by filing the income tax return in response to the notice issued under section 148 of the Act. Had the petitioner responded to the notice by filing return of income, he could have been said to have participated in the proceedings, however, merely b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee. 19. In the facts of the present case, as noticed herein above, the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer was informed of the amalgamated company having ceased to exist as a result of the approved scheme of amalgamation, yet the jurisdictional notice was issued only in its name. The Supreme Court took the view that the basis on which the jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. We quote the relevant observations thus : "32. On behalf of the Revenue, reliance has been placed on the decision of this Court in Commissioner of Income Tax, Shillong v Jai Prakash Singh ("Jai Prakash Singh"). That was a case where the assessee did not file a return for three assessment years and died in the meantime. His son who was one of the legal representatives filed returns upon which the assessing officer issued notices under Section 142 (1) and Section 143 (2). These were complied with and no objections were raised to the assessment proceedings. The assessment order mentioned the names of all the legal representatives and the assessment was made in the status of an individual. In appeal, it was contended that the assessment proceedings were void as all the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had been served on the legal representative, the successor Maharaja and the Bombay High Court held that it was not void merely because it omitted to state that it was served in that capacity. 33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a Co-ordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment." 27. A lot has been argued by Mr.M.R.Bhatt, the learned senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed beyond the period of limitation i.e. 31.3.2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration. 18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application. 19. The Revenue seeks to bring their case under Section 292 of the Act to state that the defect is a curable defect and on that ground, the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of Spice Entertainment Ltd., one of the questions, which fell for consideration, is as to whether such framing of assessment against a non existing entity or a dead person could be brought within the ambit of Section 292B of the Act and after referring to the decisions on the point including the decision of the Allahabad High Court in the case of Sri Nath Suresh Chand Ram Naresh Vs. CIT [reported in (2006) 280 ITR 396], it has been held that the provisions of Section 292B of the Act are not applicable and that framing of assessment against a non existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect, as there cannot be any assessment against a dead person. 24. The learned Senior Standing Counsel for the Revenue has sought to distinguish the decision in the case of Spice Entertainment Ltd., by referring to Sky Light Hospitality LLP. 25. On a perusal of the factual position therein, the Court came to the conclusion that the defect was curable because it was held that the notice was not addressed to the correct name and that the PAN mentioned was also incorrect. The factual background was take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excises Act, which prescribes a procedure for registration of certain persons who are engaged in the process of production or manufacture of any specified goods mentioned in the schedule to the said Act does not throw any light on the question at hand as it says nothing about how a dead person's assessment is to continue after his death in respect of excise duty that may have escaped assessment. Also, the judgments cited on behalf of revenue, namely, Yeshwantrao v. The Commissioner of Wealth Tax, Bangalore, AIR 1967 SC 135 at pages 140, 141 para 18: (1966) Suppl. SCR 419 at 429 A-B, C.A. Abraham v. The Income-Tax Officer, Kottayam & Another, AIR 1961 SC 609 at 612 para 6: (1961) 2 SCR 765 at page 771, The State of Tamil Nadu v. M.K. Kandaswami & Others, AIR 1975 SC 1871 (para 26): (1975) 4 SCC 745 (para 26), Commissioner of Sales Tax, Delhi & Others v. Shri Krishna Engineering Co. & Others, (2005) 2 SCC 695, page 702, 703 paras 19 to 23, all enunciate principles dealing with tax evasion in the context of construing provisions which are designed to prevent tax evasion. The question at hand is very different - it only deals with whether the Central Excises and Salt Act contains the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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