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TMI Blog2023 (8) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court. [3] The prayer in this petition is to issue a writ of certiorari for quashing and setting aside the order under Section 143(3) of the Income Tax Act, 1961 dated 28.3.2022 and the impugned notice of dated 28.03.2021 by which the respondent proposed to reopen the assessment of the deceased assessee for the AY 2016- 17. [4] The case of the petitioner is squarely covered by the decision dated 31.7.2023 of Special Civil Application No.18788 of 2022 which reads as under: 1. Rule returnable forthwith. Mr. Nikunt Raval, learned advocate waives service of notice of Rule for and on behalf of the respondents. 2. With consent of the learned advocates for the respective parties, the matter is taken up for final hearing today as the issue is covered by several decisions of this Court. 3. The prayer in this petition is to issue a writ of certiorari for quashing and setting aside the order under Section 148A(d) of the Income Tax act dated 30.7.2020 and the impugned notice of even date by which the respondent proposed to reopen the assessment of the deceased assessee for the AY 2017-18. 4. The facts in brief would indicate that late Shri Pradeep Roshanlal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. 6.3 In the case of Rajender Kumar Sehgal (Supra), the Delhi High Court observed at Paragraphs- 2 and 3 as under; 2. The undisputed facts are that the deceased assessee had filed income tax returns and continued to do so, till her death. The return for AY 2010-2011 was processed, in a routine manner and the deceased assessee was intimated about it. On 17.01.2015, the said assessee died. The impugned reassessment notice was issued under Section 148 of the Act to the said deceased; the petitioner, a legal representative of the deceased, Rajendra Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion deemed to have been taken against his legal representatives and may be continued against the legal representatives from the stage at which it stood on the date of death of the deceased. However, in the instant case the re-assessment proceeding has been initiated after issuance of notice against the dead person, which is not permissible in the eye of law. The condition precedent for acquiring jurisdiction to reopen any assessment is that notice under Section 148 should be issued to a correct and alive person and not to the dead person. Thus, in the instant case the jurisdictional requirement under Section 148 of the Act of Service of Notice was not fulfilled. The law mandates that the moment the revenue came to know about the death of the original assesse, they are legally bound to make the legal representative for the purpose of proceeding in the matter. At the cost of repetition, during the original assessment proceeding itself, the original assessee-Bhim Sen Chopra died and the assessing officer was wellinformed, as such there was no question to issue a notice under Section 148 of the Act as against the dead person. 10. Heavy reliance has been made by learned Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial leave petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment. 11. Having regard to the discussions made hereinabove, notice issued under Section 148 for initiation of reassessment proceeding in the name of the deceased assessee (Bhim Sen Chopra) on his PAN and not in the name of his legal representative is held to be illegal and bad in law. 6.5 In PCIT Vs. Maruity Suzuki India Ltd. (Supra), the Hon ble Apex Court observed and held as under at Paragraphs20 to 33; 20 In Spice Entertainment, a Division Bench of the Delhi High Court dealt with the question as to whether an assessment in the name of a company which has been amalgamated and has been dissolved is null and void or, whether the framing of an assessment in the name of such company is merely a procedural defect which can be cured. The High Court held that upon a notice under Section 143 (2) being addressed, the amalgamated company had brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where the High Court expressly clarified that the framing of assessment against a non-existing entity/person is a jurisdictional defect. The Division Bench also relied on the holding in Spice Entertainment that participation by the amalgamated company in proceedings does not cure the defect as there can be no estoppel in law , to affirm the quashing of the assessment order. 22. In Micron Steels, a notice was issued to Micron Steels Pvt Ltd (original assessee) after it had amalgamated with Lakhanpal Infrastructure Pvt Ltd. A Division Bench of the Delhi High Court upheld the setting aside of assessment orders, noting that Spice Entertainment is an authority for the proposition that completion of assessment in respect of a non-existent company due to the amalgamation order, would render the assessment a nullity. 23 In Micra India, the original assessee Micra India Pvt. Ltd had amalgamated with Dynamic Buildmart (P) Ltd. Notice was issued to the original assessee by the Revenue after the fact of amalgamation had been communicated to it. The Court noted that though the assessee had participated in the assessment, the original assessee was no longer in existence and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial leave and are stated in the order still the order remains the one rejecting prayer for the grant of leave to appeal. The petitioner has been turned away at the threshold without having been allowed to enter in the appellate jurisdiction of this Court. Here also the doctrine of merger would not apply. But the law stated or declared by this Court in its order shall attract applicability of Article 141 of the Constitution. The reasons assigned by this Court in its order expressing its adjudication (expressly or by necessary implication) on point of fact or law shall take away the jurisdiction of any other court, tribunal or authority to express any opinion in conflict with or in departure from the view taken by this Court because permitting to do so would be subversive of judicial discipline and an affront to the order of this Court.However this would be so not by reference to the doctrine of merger. 27. The submission however which has been urged on behalf of the Revenue is that a contrary position emerges from the decision of the Delhi High Court in Skylight Hospitality LLP which was affirmed on 6 April 2018 by a two judge Bench of this 32 Special Leave Petition (C) (D) N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal Commissioner. It was in this background that the Delhi High Court held that the case fell within the purview of Section 292B for the following reasons: 18 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 11.04.2017. 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. Skylight 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. 28. The decision in Spice Entertainment was distinguished with the following observations: 19. Petitioner relies on Spice Infotainment Ltd. v. Commissioner of Service Tax, (2012) 247 CTR 500. Spice Corp. Ltd., the company that had filed the return, had amalgamated with another company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court was that though the notice to reopen had been issued in the name of the erstwhile entity, all the material on record including the tax evasion report suggested that there was no manner of doubt that the notice was always intended to be issued to the successor entity. Hence, while dismissing the Special Leave Petition this Court observed that it was the peculiar facts of the case which led the court to accept the finding that the wrong name given in the notice was merely a technical error which could be corrected 36 Civil Appeal No. 285 of 2014 and connected cases 37 Special Leave Petition No. 7409 of 2018 under Section 292B. Thus, there is no conflict between the decisions in Spice Enfotainment on the one hand and Skylight Hospitality LLP on the other hand. It is of relevance to refer to Section 292B of the Income Tax Act which reads as follows: 292B. No return of income, assessment, notice, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindu undivided family is succeeded to, and simultaneously with the succession or after the succession there has been a partition of the joint family property between the members or groups of members, the tax due in respect of the income of the business or profession succeeded to, up to the date of succession, shall be assesseed and recovered in the manner provided in section 171, but without prejudice to the provisions of this section. Explanation. For the purposes of this section, income includes any gain accruing from the transfer, in any manner whatsoever, of the business or profession as a result of the succession Now, in the present case, learned Counsel appearing on behalf of the respondent submitted that SPIL ceased to be an eligible assessee in terms of the provisions of Section 144C read with clause (b) of sub section 15. Moreover, it has been urged that in consequence, the final assessment order dated 31 October 2016 was beyond limitation in terms of Section 153(1) read with Section 153 (4). For the purposes of the present proceeding, we do not consider it necessary to delve into that aspect of the matter having regard to the reasons which have weighed us in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions does not efface or erase the liability to pay tax where the liability is created by a distinct substantive provision. The omission or defect may render the order irregular but not void or illegal. Jai Prakash Singh and the two decisions that it placed reliance upon were evidently based upon the specific facts. Jai Prakash Singh involved a situation where the return of income had been filed by one of the legal representatives to whom notices were issued under Section 142(1) and 143(2). No objection was raised by the legal representative who had filed the return that a notice should also to be served to other legal representatives of the deceased assessee. No 40 (1943) 11 ITR 202 (Bombay) objection was raised before the assessing officer. Similarly, the decision in Maharaja of Patiala was a case where the notice 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences. 28. Mr Sastri mentioned more than once the fact that the Company would have sufficient opportunity to raise this question viz. whether the Income Tax Officer had reason to believe that underassessment had resulted from non-disclosure of material facts, before the Income Tax Officer himself in the assessment proceedings and if unsuccessful there before the appellate officer or the Appellate Tribunal or in the High Court under Section 66(2) of the Indian Income Tax Act. The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. 29. In the present case the Company contends that the conditions precedent for the assumption of jurisdiction under Section 34 were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inent to note here that, in the case on hand, the Respondent-authorities initiated the proceedings, under Section 148 of the Act, against the dead person, i.e. late Ms. Shah, by issuing notice on 27.03.2021. Subsequently, an amendment in the Act came into force with effect from 01.04.2021. Under the circumstances, we are of the considered opinion that, if, any notice is to be issued under Section 148 of the Act in post 01.04.2021 period, the procedure required under the amended Act was required to be followed. 6.7.1 Here, it is pertinent to note that the notice was issued in the name of the present petitioner, who happens to be the legal heir of the original assessee, i.e. late Ms. Shah. Thus, it becomes clear that, before issuing the notice to the present petitioner, the Respondent-authorities failed to comply with the provisions of the amended Act. It is not being disputed by the Respondent-authorities that the impugned order is also passed in the name of the dead person, i.e. late Ms. Shah, which is a nullity. Under the circumstances, the provisions of Section 292B and 292BB of the Act shall not apply in the facts of the case on hand, as discussed herein above. 6.7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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