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TMI Blog2024 (1) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... Mrs. Kalpana Raval waives service of notice of rule for the respondent no.1 2. These petitions are filed challenging the notice issued under Section 148 of the Income Tax Act, 1961 (for short the Act ) for the assessment year 2013-2014 and assessment year 2014-2015. 3. The petitioner is son of late Smt. Hiraben Premchandbhai Patel. Smt. Hiraben Premchandbhai Patel was a partner in M/s. Vijay Trading Company and therefore, drawing her share of profit from the said firm besides in addition to receive interest income from banks etc. Late Hiraben Premchandbhai Patel filed return of income regularly for several years and she passed away on 21.11.2013. 4. For assessment year 2013-2014, late Hiraben Patel filed return of income declaring total income at the rate at Rs.3,90,263/- on 08.07.2013. For assessment year 2014-2015, the petitioner as legal representative of his mother filed return of income declaring total income of Rs.5,16,535/- on 04.07.2014. 5. Impugned notices were issued under Section 148 of the Act on 31.03.2021 in the name of Hiraben Premchandbhai Patel for reopening of the assessment for assessment year 2013-2014 and assessment year 2014- 2015. In response to the notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not participated in reassessment proceedings of his late mother and on the contrary has informed the respondent-Assessing Officer by letters dated 11.09.2021 and 03.01.2022 along with death certificate of his mother that the proceedings may be dropped. 10. In support of his submission, reliance was placed on the decision of this Court in the case of Bhupendra Bhikhalal Desai vs. ITO, reported in [2021] 130 taxmann.com 196 and a decision of Madras High Court Alamelu Veerappan vs. The Income Tax Officer, Non-corporate Ward2(2), Chennai, [2018] 95 taxmann.com 115 (Madras) and decisions of this Court in the case of Urmilaben Aniruddhsinhji Jadeja vs. ITO, [2020] 420 ITR 226 and in the case of Jaydeepkumar Dhirajlal Thakkar vs Income Tax Officer, [2018] 401 ITR 301 (Guj.). 11. On the other hand, learned advocate Mr.Karan Sanghani for the respondent-Assessing Officer submitted that there is an alternative efficacious remedy available under the law and therefore, these petitions should not be entertained because if the petitioner is aggrieved by the assessment order yet to be framed, can file an appeal before the CIT (Appeals) and thereafter, before the Appellate Tribunal. Reliance was pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but is a condition precedent to the validity of the assessment. If no notice is issued or if the notice issued is shown to be invalid, the proceedings initiated would be invalid and void. The notice issued in the name of a dead person is not a valid notice and in the absence of issuance of a valid notice, the proceedings initiated under section 147 of the Act cannot be said to be valid. 5.1 It was further submitted that in this case, the notice has been issued to a dead person and hence, such notice is null and void. To initiate proceedings under section 147 of the Act, issuance of notice under section 148 of the Act to the heirs and legal representatives of the deceased is mandatory, in the absence of which the proceedings cannot be continued by issuance of notices under section 142(1) of the Act against the heirs. Reliance was placed upon the decision of this court in Rasid Lala v. Income Tax Officer, Ward-1(3)(6), (2017) 77 Taxman.com 39 (Guj.), wherein the notice under section 148 of the Act was issued to the assessee long after he had passed away. The heir of the deceased informed the Assessing Officer that the assessee has passed away and, therefore, the notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely 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 impugned notice cannot be declared as invalid. 20. The language employed in Section 292 of the Act is categorical and clear. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd answering to the notice. It was submitted that the Madras High Court in the case of Alamelu Veerappan v. Income Tax Officer, Non-corporate Ward-2(2), Chennai (supra), on which reliance has been placed on behalf of the petitioner, does not refer to section 292B of the Act and, therefore, the said decision would be not applicable to the facts of the present case. It was submitted that in this case, the petitioner had knowledge of the proceedings and has responded to the same as legal representative of the deceased and, therefore, the procedural defect which is otherwise curable may be permitted to be cured. 6.2 Reference was made to section 2(29) of the Act, which says that legal representative has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908. 6.3 The learned counsel further invited the attention of the court to the provisions of section 292B of the Act, which inter alia provide that no notice, summons or other proceeding, issued or taken in pursuance of any of the provisions of the Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons or other proceeding if s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other legal representatives. Scrutiny assessment came to be carried out by the Income Tax Officer, during the course of which, notices under section 142(1) of the Act came to be issued to Jai Prakash to appear and produce documents, accounts and other material, who complied with the same and did not raise any objection that notices must be issued to the other legal representatives of the deceased. Assessment orders were made in the name of all the ten legal representatives who were described as legal representatives of the deceased. Appeals were filed by Jai Prakash contending that the assessments were illegal and invalid as no notice had been issued to all the legal representatives of deceased. The court placed reliance upon a decision of the Bombay High Court in Maharaja of Patiala v. Commissioner of Income Tax (Central), Bombay, (1943) 11 ITR 201, for the proposition that an assessment made without strictly complying with section 24-B (section 159 in the present Act) is not void or illegal and that any infractions in that behalf can be waived by the assessee. The court also placed reliance upon its earlier decision in Estate of Late Rangalal Jajodia v. Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in continuing the proceedings against him. It was, accordingly, urged that the petition being devoid of merits, deserve to be dismissed. 7. In the backdrop of the rival submissions, the facts as emerging from the record of the case may be adverted to. The impugned notice dated 28.03.2018 is issued to Shri Jayantilal Harilal Patel, father of the petitioner, seeking to reopen the assessment for assessment year 2011-12 under section 148 of the Income Tax Act, 1961. By a letter dated 27.04.2018 addressed to the Income Tax Officer, the petitioner informed him that his father Shri Jayantilal Harilal Patel has passed away on 24.06.2015, enclosing therewith a death certificate and further being his son and in his capacity as legal heir, requested him to drop the proceedings. Thereafter, another notice dated 10.07.2018 came to be issued under sub-section (1) of section 142 of the Act to Shri Jayantilal Harilal Patel calling upon him to furnish the details mentioned therein. In the annexure to the said notice, the assessee was 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Income Tax, 238 ITR 1008 (MP), wherein after the death of the assessee, the notice was issued in the name of a person who was dead. The court observed that the widow of such person participated in the assessment proceedings and hence, the defect in the notice stood automatically cured. It is further stated in the order disposing of the objections that even if the notice dated 28.03.2018 is issued defectively in the name of the deceased assessee, then also, as per the provisions of section 292B of the Act, the same cannot be held to be invalid. 11. Insofar as the contention raised by the petitioner based on section 159 of the Act is concerned, the Assessing Officer observed that in this case, the assessee (the petitioner) had introduced himself as a son of the deceased assessee and as legal heir and has produced death certificate in response to the notice issued under section 148 of the Act. Therefore, as the legal heir, upon being served with the notice under section 148, has participated in the proceedings, the reassessment proceedings initiated are legal and valid. Reliance has been placed upon the decision of the Madras High Court in the case of V. Ramanathan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undercharged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of, or parted with. (5) The provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased. In the present case, the proceeding under section 147 of the Act had not been initiated against the deceased before his death, and hence, clause (a) would not be applicable in the facts of this case. 15. Clause (b) of sub-section (2) of section 159 of the Act provides that any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative. The present case would, therefore, fall within the ambit of section 159(2)(b) of the Act and, hence, the proceeding can be taken against the legal representative. Now, it cannot be gainsaid that a proceeding under section 147 of the Act of reopening the assessment is initiated by issuance of notice under section 148 of the Act, and as a necessary corollary, therefore, for taking a proceeding under that section against the legal representative, necessary notice under section 148 of the Act would be required to be issued to him. In the present case, the impugned notice under section 148 of the Act has been issued against the deceased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that therefore arises for consideration is whether the notice under section 148 of the Act issued against the deceased assessee can be said to be in conformity with or according to the intent and purposes of the Act. In this regard, it may be noted that a notice under section 148 of the Act is a jurisdictional notice, and existence of a valid notice under section 148 is a condition precedent for exercise of jurisdiction by the Assessing Officer to assess or reassess under section 147 of the Act. The want of a valid notice affects the jurisdiction of the Assessing Officer to proceed with the assessment and thus, affects the validity of the proceedings for assessment or reassessment. A notice issued under section 148 of the Act against a dead person is invalid, unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection. Therefore, where the legal representative does not waive his right to a notice under section 148 of the Act, it cannot be said that the notice issued against the dead person is in conformity with or according to the intent and purpose of the Act which requires issuance of notice to the assessee, whereupon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdiction of the Assessing Officer without raising any objection. 24. We are of the view that the same principle as referred to above would apply even to a notice issued to a dead assessee under Section 153C of the Act. It is not in dispute that the legal heir of late Bhupendrabhai Desai had not participated in the proceedings. All that the legal heir of late Bhupendrabhai Desai did was to inform the Assessing Officer about the death of his father and requested to drop the proceedings. It is true that although the father passed away in the year 2017, yet the legal heir did not inform the department upto October 2019. However, at the same time, we should not overlook the fact that even after coming to know about the demise of late Bhupendrabhai, the department could have issued a valid notice to the legal heir as the period of limitation of 21 months had not expired. We fail to understand what prevented the department from issuing a valid notice to the legal heir within the prescribed time period. 25. In the aforesaid context, we may refer to a recent pronouncement of the Supreme Court in the case of Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equiring him to make a return of income. The notices were served upon the successor Maharaja and the assessment order was passed describing the assessee as His Highness...late Maharaja of Patiala . The successor appealed against the assessment contending that since the notices were sent in the name of the Maharaja of Patiala and not to him as the legal representative of the Maharaja of Patiala, the assessments were illegal. The Bombay High Court held that the successor Maharaja was a legal representative of the deceased and while it would have been better to so describe him in the notice, the notice was not bad merely because it omitted to state that it was served in that capacity. Following these two decisions, this Court in Jai Prakash Singh held that an omission to serve or any defect in the service of notices provided by procedural 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner, being the wife of the said Mr.S.Veerappan, can be compelled to participate in the proceedings and respond to the impugned notice. The fact that the said Mr.S.Veerappan died on 26.1.2010 is not in dispute. If this fact is not disputed, then the notice issued in the name of the dead person is unenforceable in the eye of law. 15. The Department seeks to justify their stand by contending that they were not intimated about the death of the assessee, that the legal heirs did not take any steps to cancel the PAN registration in the name of the assessee and that therefore, the Department was justified in directing the petitioner to cooperate in the proceedings pursuant to the impugned notice. 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 reasons : Admittedly, the limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued on a dead person. However, the fact regarding the death of the assessee could not be disputed by the Department. The Department continued the proceedings under Section 147/148 of the Act and at that stage, the son of the deceased approached the High Court of Delhi. The High Court of Delhi pointed out that what was sought to be done by the Income Tax Officer was to initiate proceedings under Section 147 of the Act against the deceased assessee for the assessment year 2008-09, for which, the limitation for issuance of notice under Section 147/148 of the Act was 31.3.2015 and on 02.7.2015 when the notice was issued, the assessee was already dead and if the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31.3.2015 by issuing the notice to the legal heirs of the deceased and beyond that date, it could not have proceeded in the matter even by issuing notice to the legal representatives of the assessee. The decision in Vipin Walia fully supports the case of the petitioner herein. 22. The decision in the case of Vipin Walia was followed in the decision of the High Court of Gujarat in the case of Rasid Lala, in which, the re-assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not defective. 30. We shall now deal with the argument canvassed by Mr.Bhatt as regards Section 2(31) of the Act, which defines the term person . The argument of Mr.Bhatt is that the legal heir of late Bhupendrabhai Desai would fall within the ambit of person as defined under Section 2(31) of the Act and person includes a body of individuals. We may only observe that this definition of the term person referred to above does not include the legal representatives of persons who are since deceased. 31. In the aforesaid context, we may refer to and rely upon a decision of the Supreme Court in the case of Shabina Abraham (supra). In Shabina Abraham (supra), the question before the Supreme Court was, whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representatives/estate of a sole proprietor/manufacturer after he is dead. 32. A similar argument was canvassed by the learned counsel appearing for the Revenue by placing reliance on the definition of the term person under the General Clauses Act, 1897. We quote the relevant observations of the Supreme Court thus: Learned counsel for the Revenue also relied upon the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is clear that the person referred to can only be a living person as was held in Ellis C.Reid, AIR 1931 Bom 333. Further, the only extension of the definition of assessee under the Central Excises and Salt Act is that it would also include an assessee's agent, which has nothing to do with the facts of the present case. It is well settled that a means and includes definition is exhaustive in nature and that there is no scope to read anything further into the said definition. 34. The Supreme Court, in a plethora of judgments, has taken the view that if the person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the State, seeking to recover the tax, cannot bring the citizen within the letter of the law, the citizen is free, however, apparently within the spirit of law the case might otherwise appear to be. The Supreme Court, in CST vs. Modi Sugar Mills Ltd., AIR 1961 SC 1047, observed thus : In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look ..... X X X X Extracts X X X X X X X X Extracts X X X X
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