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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 ..... ides 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 under Section 148 of the Act, the office staff of M/s.Hemant R. Vora & Co. Chartered Accountants authorized representatives of the petitioner uploaded the return of income declaring the same return on 13.05.2021. On 16.04.2021 for assessment year 2013- 2014 and on 13.05.2021 for assessment year 2014-2015, however, the return of income was not verified by the petitioner as per the procedure laid down by the Central Board of Direct Taxes (CBDT). Hence, the returns of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lu 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 placed on the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax & Ors vs Chhabil Dass Agarwal, [2013] 357 ITR 357. It was further submitted that the sole ground to challenge the impugned notice issued under Section 148 of the Act dated 31.03.2021 is in the name of the deceased person and therefore, the same is bad in law and is not tenable as the late Hiraben Premchandbhai Patel had passed away on 21.11.2013 and the factum of the deat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 148 of the Act is invalid, despite which the heir was told to file the return of income in compliance of the said notice. The court held that the notice issued in the name of a dead person was not valid and that despite being informed about the death of the original assessee, the assessee, instead of taking corrective measures as provided under section 292B of the Act and issuing fresh notice to the heirs of the deceased, continued with the reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act." 5.3 It was, accordingly, urged that the petition deserves to be allowed by granting the reliefs as prayed for. 6. Vehemently opposing the petition, Mrs. Mauna Bhatt, learned Senior Standin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge 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 such notice, summons or other proceeding is, in substance and effect, in conformity with or according to the intent and purpose of the Act. It was submitted that in the light of the provisions of section 292B of the Act, the defect in the notice by issuing the same to a dead person would not render the notice invalid, inasmuch as it is a purely procedural lapse. 6.4 Reliance was placed upon the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, Madras, (1971) 79 ITR 505, for the proposition 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 such liability is created by distinct substantive provisions (charging sections). Any such omission or defect may render the order made irregular - depending upon the nature of the provision not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 response to the notice under section 148 and stating that this may be treated as a notice under section 142(1) read with section 129 of the Income Tax Act, 1961. 8. The petitioner addressed a letter dated 02.08.2018 to the Income Tax Officer objecting to the notices issued under section 148 as well as under section 142(1) of the Act and drew his attention to the earlier letter dated 27.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 v. Commissioner of Income Tax, (1963) 49 ITR 881 (Madras). It is further stated therein that it is not in dispute that Shri Chandreshbhai J. Patel is the legal heir of the deceased assessee; therefore, the proceedings initiated against the legal representative/legal heir are valid and legal. 12. In the backdrop of the aforesaid facts, it is an admitted position that the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sub-section (2) of section 161, section 162 and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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 assessee. In the opinion of this court, since this is not a case falling under clause (a) of subsection (2) of section 159 of the Act, the proceeding pursuant to the notice under section 148 of the Act issued to the dead person, cannot be continued against the legal representative. 16. On behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Assessing Officer assumes jurisdiction under section 147 of the Act and consequently, the provisions of section 292B of the Act would not be attracted. In the opinion of this court, the decision of this court in the case of Rasid Lala v. Income Tax Officer, Ward1(3)(6) (supra) would be squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drabhai 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 Limited, (2019) 107 taxmann.com 375 (SC). The ratio of this decision of the Supreme Court is that during the pendency of the assessment proceedings if the assessee company gets amalgamated with another company, it would lose its existence and the assessment order passed subsequently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice 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 limitation period for issuance of notice for reopening expired on 31.3.2017. The impugned notice was issued on 30.3.2017 in the name of the dead person. On being intimated about the death, the Department sent the notice to the petitioner - his spouse t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 proceedings were initiated against the dead person, that too, after a long delay. The Court pointed out that even if the provisions of Section 159 of the Act are attracted, in that case also, the notice was required to be issued against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bhai 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 a "person" under the General Clauses Act, 1897. Section 3(42) of the said Act defines "person as under:- "(42) "Person" shall include any company or association or body of individuals whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "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 squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot impl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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