Case Law Details
Dhruvnesh Vijaykumar Patel Vs ACIT (Gujarat High Court)
The petitioner, being the legal heir of the deceased assessee, challenged two orders relating to Assessment Year 2011–2012. One petition questioned the reassessment order passed under Section 144 read with Section 147 of the Income Tax Act, 1961, while the other challenged the penalty order passed under Section 271(1)(c). The principal ground raised was that the notices and consequential orders had been issued and concluded against a deceased person.
The deceased assessee died on 27.05.2018. Prior to that, a notice dated 27.03.2018 had been issued under Section 147 read with Section 148. Subsequently, a notice under Section 142(1) dated 11.07.2018 was issued. According to the petitioner, neither the deceased nor the legal heir received the notices, and no participation took place in the reassessment proceedings.
The Assessing Officer thereafter passed an assessment order dated 26.11.2018 under Section 144 read with Section 147, making an addition of Rs. 22,67,500 against the deceased. The Revenue also initiated penalty proceedings by issuing a notice under Section 274 read with Section 271(1)(c) dated 27.11.2018, followed by a penalty order dated 30.05.2019. The petitioner stated that he became aware of these proceedings only upon receiving a letter dated 07.02.2020.
The petitioner contended that the reassessment and penalty proceedings had been concluded against a deceased person and were therefore legally unsustainable. Reliance was placed on the earlier decision of the Gujarat High Court in Pravinchandra A Shah L/H of late Saryuben P Shah v. Union of India, wherein it was held that proceedings initiated and concluded against a deceased person are a nullity.
The Revenue opposed the petitions but did not dispute that the proceedings had been concluded against a deceased person. It also did not dispute the ratio laid down in the earlier Gujarat High Court decision relied upon by the petitioner.
The High Court observed that the coordinate Bench, after considering the relevant provisions of the Income Tax Act, 1961 and decisions of various High Courts and the Supreme Court, had already held that proceedings initiated against a deceased person and the consequential orders are a nullity. The Court found that the facts of the present case squarely attracted the same principle and saw no reason to take a different view.
Accordingly, the High Court allowed both petitions and quashed and set aside the reassessment order dated 26.11.2018 passed under Section 144 read with Section 147 and the penalty order dated 30.05.2019 passed under Section 271(1)(c), holding that the proceedings had been concluded against a deceased person. (Gujarat HC)
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. In Special Civil Application No. 11756 of 2020, the petitioner has challenged the impugned order dated 30.05.2019 passed by the Assistant Commissioner of Income Tax, Ward-5, Anand under section 271(1)(c) of the Income Tax Act, 1961 (For short “the Act”) for Assessment Year 2011-2012 whereas in Special Civil Application No.12196 of 2020 the petitioner has challenged the impugned order dated 26.11.2018 passed by the Assistant Commissioner of Income Tax(OSD), Ward-5, Anand under section 144 read with section 147 of the Act for Assessment Year 20112012 on the ground that the notices as well as orders are issued against a dead person.
2. Brief facts giving rise to the present petitions can be stated as under:
3. The petitioner is the heir of deceased Mr. Vijaykumar Ambalal Patel who died on 27.05.2018.
4. The proceedings for reassessment under section 147 read with section 148 of the Act and notice dated 27.03.2018 was issued upon a dead person. Said notice was said to have been served through postal department. Thereafter, notice dated 11.07.2018 under section 142(1) of the Act was issued.
5. It is the case of the petitioner that since he is not in receipt of any notice nor his father could receive the notice, no participation was made in the reassessment proceedings. Accordingly, assessment order dated 26.11.2018 was passed under section 144 read with section 148 of the Act by making addition of Rs. 22,67,500/- effectively against a dead person.
6. The respondent thereafter initiated penalty proceedings against the deceased father of the petitioner by issuance of notice under section 274 read with section 271(1)(c) of the Act dated 27.11.2018.
7. The petitioner only came to know about the aforesaid proceedings when a letter dated 07.02.2020 was served upon him.
8. Being aggrieved and dissatisfied with the aforesaid, the petitioner has approached this Court by way of these petitions for appropriate relief.
9. Heard learned advocate Mr. Vijay H. Patel for the petitioner and learned advocate Mr. Rudram Trivedi for learned advocate Mr. Nikunt Raval for the respondent.
10. Learned advocate Mr. Vijay H. Patel for the petitioner while assailing the impugned order has made the following submissions:
11. Mr. Patel, learned advocate for the petitioner, at the outset submitted that his father namely, late Mr. Vijaykumar Ambalal Patel expired on 27.05.2018. Thus the proceedings were concluded against a dead person which has no legal legs to stand. To substantiate the aforesaid contention, Mr. Patel has placed reliance on the decision of co-ordinate Bench of this Court in case of Pravinchandra A Shah L/H of late Saryuben P Shah v. Union of India (Judgment dated 10.07.2023 passed in Special Civil Application No.5451 of 2022).
12. Per contra, Mr. Rudram Trivedi appearing for the revenue authority although vehemently opposed the petitioner but could not dispute the fact that the proceedings were concluded against a dead person nor could dispute the ratio laid down by the Division Bench of this Court in case of Pravinchandra A Shah (supra).
13. In view of aforesaid, it would be apt to take note of decision in case of Pravinchandra A Shah (supra). In the said decision, co-ordinate Division Bench has after referring to various provisions of the Income Tax Act, 1961 as well as the decisions of various High Courts as well as Hon’ble Supreme Court has held that the proceedings initiated by the respondent authority against a dead person as well as the impugned orders passed by it, is nullity.
14. Keeping in mind the aforesaid ratio, the facts of the present case which is not much in dispute, in the present case as well, the proceedings were concluded against a dead person. Thus the facts of the case of Pravinchandra A Shah (supra) are squarely applicable to the facts of the present case and thereby we are unable to take a different view than that is taken by the co-ordinate Division Bench of this Court.
15. Accordingly, the present petitions are allowed. Impugned order dated 30.05.2019 passed by the Assistant Commissioner of Income Tax, Ward-5, Anand for Assessment Year 2011-2012 arising out of Special Civil Application No.11756 of 2020 as well as impugned order dated 26.11.2018 passed by the Assistant Commissioner of Income Tax(OSD), Ward-5, Anand for Assessment Year 2011-2012 arising out of Special Civil Application No.12196 of 2020 are quashed and set aside.
16. Both the petitions are accordingly disposed of.
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