Case Law Details
Radha Mohan Khandelwal Vs ACIT (Rajasthan High Court)
The Rajasthan High Court considered a challenge to notices and proceedings initiated under Section 148 of the Income Tax Act, 1961. The petitioner contended that the reassessment proceedings were invalid because they had been initiated and carried out against a deceased person. It was submitted that the concerned assessee, Anguri Devi Khandelwal, had died on 10.03.2021, whereas the notice under Section 148 was issued subsequently on 28.06.2021. The petitioner also relied upon the decision of the Supreme Court in Union of India & Others v. Ashish Agarwal, contending that notices issued under the unamended Section 148 after 01.04.2021 were required to be treated as notices under Section 148A and fresh proceedings could be undertaken only in accordance with the procedure laid down by the Supreme Court.
During the hearing, the respondents admitted the factual position that Anguri Devi Khandelwal had passed away before the issuance of the notice dated 28.06.2021. In view of this admitted fact, the High Court held that the notices issued and the proceedings conducted against the deceased person were a nullity and could not be sustained.
On the legal issue concerning the applicability of the Supreme Court’s judgment in Union of India & Others v. Ashish Agarwal, the respondents did not dispute the position advanced by the petitioner. The High Court noted the directions issued by the Supreme Court, whereby notices issued under the unamended Section 148 after 01.04.2021 were to be treated as show-cause notices under Section 148A(b), with further proceedings to be undertaken in accordance with Section 148A and other applicable provisions of the Act. The Supreme Court had also clarified that all available defences under Section 149 and all rights and contentions of both the assessee and the Revenue would remain open.
The respondents sought liberty to proceed against the legal representatives of the deceased assessee in accordance with the directions contained in the Supreme Court’s decision in Ashish Agarwal. Counsel for the petitioner did not oppose this request.
Considering the admitted facts and the undisputed applicability of the Supreme Court’s ruling, the Rajasthan High Court disposed of the writ petition in terms of the Supreme Court’s order dated 04.05.2022 in Union of India & Others v. Ashish Agarwal. While holding that the notices and proceedings against the deceased assessee were invalid, the Court granted liberty to the Revenue to proceed against the legal representatives of the deceased in accordance with law and the directions laid down by the Supreme Court.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
Heard.
Mr. Amit Malani, Advocate, on instructions from Mr. Nikhil Simlote, Advocate on advanced copy, appears on behalf of the respondents.
The orders and proceedings under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) have been challenged on the ground that it was initiated and passed against the dead person and in any case in view of the judicial pronouncement of the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (Civil Appeal No. 3005/2022 and batch of appeals), the notices which were issued under Section 148 of the Act have been treated as Section 148-A of the Act and proceedings may be drawn afresh.
As the factual aspect of the case that even before issuing of notice dated 28.06.2021, Anguri Devi Khandelwal died on 10.03.2021, is admitted by counsel for respondent, the notices and the proceedings drawn would be nullity.
As far as the legal position with regard to applicability of judgment of Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (supra) is concerned, the same is not disputed by the learned counsel for the respondent. Considering the above, we are inclined to dispose off the petition in terms of the order passed by the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (supra).
Following directions have been issued by the Hon’ble Supreme Court in the aforesaid case:
“10. In view of the above and for the reasons stated above, the present Appeals are ALLOWED IN PART. The impugned common judgments and orders passed by the High Court of Judicature at Allahabad in W.T. No. 524/2021 and other allied tax appeals/petitions, is/are hereby modified and substituted as under:-
(i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assessees can reply to the show-cause notices within two weeks thereafter;
(ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a one-time measure vis-à-vis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts.
Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officer to hold any enquiry, if required;
(iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees; Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted);
(iv) All defences which may be available to the assessees including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.
12. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden this Court with approximately 9000 appeals. We also observe that present order shall also govern the pending writ petitions, pending before various High Courts in which similar notices under Section 148 of the Act issued after 01.04.2021 are under challenge.
13. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only. All these appeals are accordingly partly allowed to the aforesaid extent.
In the facts of the case, there shall be no order as to costs.”
Learned counsel for the respondent would submit that he may be granted liberty to proceed against the legal representative of the deceased in accordance with the directions given by the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (supra), which learned counsel for the petitioner does not dispute.
In view of the above, this writ petition is finally disposed off in terms of order dated 04.05.2022 passed by the Hon’ble Supreme Court in the case of Union of India & Others Vs. Ashish Agarwal (supra), granting liberty to proceed against legal representative of deceased Anguri Devi Khandelwal.
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