Rajkumar Harlalka Vs ITO (Bombay High Court)
Summary: The Bombay High Court allowed Rajkumar Harlalka’s writ petition challenging the order dated 29 June 2025 under Section 148A(3) and consequential notice under Section 148 for A.Y. 2021-22. The proceedings originated from a Show Cause Notice dated 31 March 2025 under Section 148A(1), issued in the name of the deceased assessee, Balkrishna Sohanlal Harlalka, who had died on 4 April 2023. The Petitioner had applied on 3 May 2023 to be registered as legal heir and representative, and the Department approved the application on 4 May 2023. The Court held that compliance with Section 148A(1) is a condition precedent to an order under Section 148A(3) and a valid notice under Section 148, and that a notice issued to a person who was no longer alive did not satisfy that requirement. Relying on Sumit Balkrishna Gupta and N. Binoj, the Court held that issuing notice to the correct person is a foundational jurisdictional requirement and that subsequent substitution of the legal representative could not validate proceedings that were non-est at inception. The Court also held that Section 159(2)(b) requires proceedings to be taken against the legal representative and does not validate a notice issued to a dead person. The Section 148A(1) Show Cause Notice, Section 148A(3) order, Section 148 notice and consequential proceedings were therefore quashed and set aside. The Court clarified that the Department was not precluded from initiating fresh proceedings against the legal representative for the concerned assessment year in accordance with law, including applicable limitation requirements. Rule was made absolute and the petition was disposed of without costs.
Reassessment proceedings initiated against a deceased assessee are void ab initio where the foundational notice is issued to a dead person, and the subsequent substitution or participation of the legal representative cannot cure the jurisdictional defect.
Fact. The original assessee, Late Shri Balkrishna Sohanlal Harlalka, died on 4 April 2023. Shortly thereafter, his son and legal heir applied for registration as the legal representative on the Income-tax e-Filing Portal, and the Department approved such registration on 4 May 2023. Thus, the Department had undisputed knowledge of both the death of the assessee and the identity of his legal representative.
Despite this, the Department subsequently issued a summons under section 131(1A) and thereafter a show cause notice dated 31 March 2025 under section 148A(1) in the name of the deceased assessee. The legal heir responded to the notice and specifically raised a preliminary objection that the proceedings were void ab initio since the notice had been issued to a person who was no longer alive.
Thereafter, the Assessing Officer passed an order under section 148A(3) and issued a notice under section 148 in the name of the legal heir. The Department contended that any initial defect stood cured because, after becoming aware of the death, it continued the proceedings against the legal representative under section 159.
AO / Department’s Finding
The Department contended that section 159 permits assessment and reassessment proceedings relating to a deceased person to be continued against his legal representative. It was argued that although the initial show cause notice had inadvertently been issued in the name of the deceased assessee, the legal heir subsequently participated in the proceedings and filed a reply. Therefore, according to the Revenue, the proceedings were validly continued by bringing the legal representative on record.
The Revenue further submitted that the legal heir’s participation in response to the show cause notice demonstrated that an effective opportunity of hearing had been provided and that the subsequent order under section 148A(3) and notice under section 148 issued in the name of the legal representative were legally sustainable.
High Court Finding
The Bombay High Court rejected the Revenue’s contention and held that service of a valid show cause notice upon the correct person is a foundational jurisdictional requirement for initiating reassessment proceedings. The Court observed that the statutory opportunity contemplated under section 148A(1) must necessarily be given to a living assessee or, where the assessee has died, to his legal representative.
A notice issued in the name of a person who was already dead on the date of its issuance was held to be incapable of satisfying this statutory requirement. Consequently, the Court held that the invalidity was not a mere procedural irregularity but went to the very root of the Assessing Officer’s jurisdiction.
The Court particularly noted that the Department had prior knowledge of the assessee’s death because the legal heir had already been registered and recognised on the Income-tax e-Filing Portal nearly two years before the impugned show cause notice was issued. Therefore, there was no justification for initiating proceedings against the deceased person.
The Court further held that section 159 does not validate proceedings initiated against a dead person. Section 159 permits proceedings which could have been taken against the deceased to be taken against his legal representative. However, it does not authorise the Department first to initiate proceedings against a non-existent person and subsequently attempt to cure the defect by substituting the legal representative.
The Court also rejected the argument based on the legal heir’s participation. Since the legal heir had expressly raised the jurisdictional objection at the outset, his participation could not amount to waiver. More importantly, the Court reiterated the fundamental principle that participation cannot confer jurisdiction where jurisdiction does not otherwise exist.
Accordingly, the Court held that the show cause notice issued under section 148A(1) was invalid and non-est in law, and all consequential proceedings, including the order under section 148A(3), notice under section 148 and reassessment proceedings, were liable to be quashed.
Outcome
The Writ Petition was allowed.
- The Bombay High Court:
- quashed the show cause notice issued under section 148A(1);
- set aside the consequential order under section 148A(3);
- quashed the notice issued under section 148; and
- annulled all consequential reassessment proceedings.
However, the Court clarified that the Department would not be prevented from initiating fresh proceedings against the legal representative, provided such proceedings were otherwise permissible under law and within the applicable limitation period.
Ratio. A notice initiating reassessment proceedings must be issued to a legally existing person. Where the assessee has died, proceedings must be initiated directly against the legal representative in accordance with section 159. A foundational notice issued to a deceased person is void ab initio and non-est; subsequent substitution of the legal representative, participation in proceedings, or issuance of later notices in the legal representative’s name cannot cure the original jurisdictional defect.
Cases Discussed / Relied Upon
- Sumit Balkrishna Gupta v. ACIT, Circle 16(2), Mumbai & Ors. — 2019 (2) TMI 1209 – Bombay High Court — Relied upon for the principle that a notice issued to a deceased person constitutes a foundational and jurisdictional defect which cannot be cured under sections 292B or 292BB.
- N. Binoj & Others v. Income Tax Officer, Tirur & Others — 2024 (12) TMI 1432 – Kerala High Court — Relied upon for the principle that a notice initiating reassessment proceedings against a deceased person is invalid and cannot form the foundation for subsequent proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule. Respondents waive service. With the consent of parties, Rule made returnable forthwith and the Writ Petition is taken up for final disposal.
2. The above Writ Petition has been filed seeking the quashing and setting aside of the order dated 29th June 2025 (‘Impugned Order’) passed by Respondent No.1 under Section 148A(3) of the Income Tax Act, 1961 (‘the Act’), and the consequential reopening notice of even date issued under Section 148 of the Act (‘Impugned Notice’) for Assessment Year (‘A.Y.’) 2021-22. The short point on which the Impugned Order and the Impugned Notice are challenged is that they arise from reopening proceedings initiated by a Show Cause Notice dated 31st March 2025 issued by Respondent No.1 under Section 148A(1) of the Act (‘SCN’) in the name of a deceased person.
3. The Petitioner is the son and legal heir of the late Mr.Balkrishna Sohanlal Harlalka (‘Deceased Assessee’). The deceased Assessee passed away on 4th April 2023. On 3rd May 2023, i.e. about a month after the demise of the deceased Assessee, the Petitioner applied on the Income-tax e-Filing Portal to be appointed and registered as the legal heir and representative of the deceased Assessee. Such application made by the Petitioner was approved by the Department on 4th May 2023. These facts are not disputed even in the Affidavit-in-Reply of the Respondents dated 2nd July 2026.
4. Despite the above, a summons dated 1st January 2025 under Section 131(1A) of the Act was issued in the name of the deceased Assessee. Thereafter, on 31st March 2025, Respondent No.1 issued the SCN under Section 148A(1) of the Act, once again in the name of the deceased Assessee, calling upon him to show cause why a notice under Section 148 ought not to be issued for A.Y.2021-22.
5. In response to the said SCN, the Petitioner, acting as the legal heir, filed a reply dated 11th April 2025. At the threshold, the Petitioner objected that the SCN was void ab initio because it had been issued to the deceased Assessee, even though the Department had already accepted the Petitioner as his legal heir on its Portal. The Impugned Order was then passed on 29th June 2025 under Section 148A(3) of the Act by Respondent No.1, followed by the Impugned Notice under Section 148, both issued in the name of the Petitioner as the legal heir and not in the name of the deceased Assessee despite the earlier SCN being issued in the name of the deceased Assessee.
6. The learned counsel appearing on behalf of the Petitioner submitted that the SCN under Section 148A(1) of the Act was issued to a non-existent person, and was therefore, null and void. He submitted that all subsequent proceedings, including the Impugned Order and the Impugned Notice, founded upon a void SCN are equally without jurisdiction. In support of this contention, reliance was placed on the decision of this Court in Sumit Balkrishna Gupta V/S Assistant Commissioner of Income-tax [(2019) 103 taxmann.com 188 (Bombay)]. Reliance was also placed on the decision of the Kerala High Court in N. Binoj V/S Income-tax Officer [(2025) 170 taxmann.com 469 (Kerala)]. He, accordingly, prayed that the Impugned Order, the Impugned Notice and the consequent reassessment proceedings initiated for A.Y.2021-22 in the name of the deceased Assessee be quashed and set aside.
7. On the other hand, the learned counsel appearing for the Department relied upon Section 159 of the Act and the Affidavit-in-Reply dated 2nd July 2026. He submitted that while the SCN was indeed issued to the deceased Assessee on 31st March 2025, once the fact of his death came to the notice of Respondent No.1 from the reply preferred in response to the SCN, the Petitioner was brought on record and the proceedings were thereafter validly continued against him in his representative capacity. He, therefore, submitted that the Petition be dismissed and the validity of the reassessment proceedings be upheld.
8. We have heard the learned Counsel for the parties and perused the record. Since the Petition can be disposed of on the above jurisdictional issue, it is unnecessary for us to examine the merits of the proposed reassessment for A.Y.2021-22.
9. Section 148A(1) of the Act mandates that before issuing any notice under Section 148, the Assessing Officer shall provide an opportunity of being heard to the Assessee by serving upon him a notice to show cause. The order contemplated under Section 148A(3) is to be passed after taking into account the reply furnished to such notice. Compliance with Section 148A(1) is, therefore, a condition precedent to passing an order under Section 148A(3) and issuance of a valid notice under Section 148 of the Act. A Show Cause Notice addressed to a person who was no longer alive on the date of its issuance does not satisfy this statutory requirement.
10. It is now well settled that the issuance of a Notice to the correct person is not merely a procedural requirement, but a foundational requirement for acquiring jurisdiction. In Sumit Balkrishna Gupta (supra), this Court held that a Notice of reopening under Section 148 of the Act issued to a dead person is a foundational and substantial error which cannot be cured under Sections 292B or 292BB of the Act. The same principle must apply to the mandatory Show Cause Notice under Section 148A(1) of the Act, upon which the order under Section 148A(3) and the Notice under Section 148 are founded. A similar view was taken by the Kerala High Court in N. Binoj (supra) in context of a notice to show cause under Section 148A(b) [the pre-decessor to Section 148(1)] being invalid for having been issued to a dead person.
11. In the present case, it is evident that the Department was expressly notified of the death of the deceased Assessee and the Petitioner’s request for registration as the legal heir came to be accepted on the Income-tax e-Filing Portal on 4th May 2023. There was, therefore, no justification whatsoever for issuing the SCN dated 31st March 2025 under Section 148A(1) in the name of the deceased Assessee, almost two years after the Department had been notified of the death. The subsequent issuance of the Impugned Order and the Impugned Notice in the name of the Petitioner, after the filing of objections to the SCN, cannot validate a proceeding which was non-est at its inception.
12. The provisions of Section 159 of the Act also do not come to the aid of the Respondents, as Section 159(2)(b) itself stipulates that for the purpose of making a reassessment of the income of the deceased, “any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative”. Thus, it is clear that Section 159 calls for proceedings to be taken against the legal representative and does not validate notices issued under the Act to a dead person instead of the legal representative. Neither does it authorize the Department to initiate reopening against a person after his death, and thereafter cure that defect by substituting the legal representative at a later stage, especially when the death of the Assessee was already within the knowledge of the Department as on the date of initiation of proceedings.
13. The fact that the Petitioner raised his objections to the SCN by filing a reply does not alter the position. The reply expressly raised the jurisdictional objection at the outset, regarding the SCN being invalid on account of the same being issued to the deceased Assessee. In any event, participation cannot confer jurisdiction where none exists, and it cannot cure the jurisdictional defect in context of a Notice issued to a dead person.
14. In these circumstances, we are of the view that the SCN dated 31st March 2025 issued under Section 148A(1) of the Act is invalid and non-est in law. Consequently, the Impugned Order dated 29th June 2025 passed under Section 148A(3), the Impugned Notice dated 29th June 2025 issued under Section 148 of the Act, and all proceedings consequential thereto cannot be allowed to stand and are hereby quashed and set aside.
15. Accordingly, the Writ Petition is allowed in terms of prayer clause (a), which reads as under :-
“(a) Issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction under Articles 226 and 227 of the Constitution of India, 1950 quashing the Impugned Order dated 29 June 2025 (Exhibit F) passed by Respondent No. 1 u/s 148A(3) of the Act and the consequent Impugned Notice dated 29 June 2025 (Exhibit G) issued by Respondent No. 1, as being illegal, arbitrary and without jurisdiction;”
16. However, we clarify that nothing in this order will preclude the Department from initiating fresh proceedings against the legal representative of the deceased Assessee for the concerned Assessment Year, in accordance with law, if the requirements under the Act are satisfied, including the limitation period therein.
17. With this clarification, rule is made absolute in the aforesaid terms, and the Writ Petition is also disposed of in terms thereof. However, there shall be no order as to costs.
18. This order will be digitally signed by the Private Secretary/Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
