Case Law Details
Vikrant Anthony Joseph Vs ITO (Gujarat High Court)
Law is well settled that unless the heirs and legal representatives of the deceased assessee could be said to have been submitted to the jurisdiction of the assessing officer and have participated in the assessment or re-assessment proceedings, notice to the dead assessee and commencement of assessment or re-assessment proceedings against dead person is rendered null and void.
The attempt on the part of the income tax authorities to start proceedings for assessment or re-assessment against the dead person is viewed not merely as procedural irregularity but it is stated as jurisdictional defect.
There cannot be an assessment against the dead person. As noticed above, the provisions of Section 292B of the Act are also not applicable and no assessment can be framed against a non-existing entity or a person who has died.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
Rule returnable forthwith. Learned advocate Mr.Varun Patel for the respondent authorities appear and waives service of Rule on behalf of the respondent.
1.1 Heard learned advocate Ms.Nupur Shah for the petitioner and learned advocate for the respondent.
1.2 Notice was issued in this petition on 13.12.2021 for final disposal.
2. The petitioner has prayed to set aside assessment order dated 26.12.2018 passed by the Income Tax Authority, Ward-1 (2)(4) Vadodara, passed under Section 144 read with Section 147 of the Income Tax Act, 1961. It is also prayed to quash the demand notice of even date, as well as order dated 24.3.2021 issued under Section 264 of the Income Tax Act (hereinafter referred to as ‘the Act’).
3. The petitioner happens to be the son of deceased Smt. Rosamma Anthony Joseph. She died on 27.5.2014. The copy of the death certificate produced on record shows the factum of death. It appears that on 27.3.2018 respondent No.1 Income Tax Officer issued notice under Section 148 of the Act which was addressed in the name of deceased Smt. Rosamma Anthony. Notice was thus issued after four years to the dead person. On 20.7.2018, the petitioner issued notice under Section 142(1) of the Act. It was stated that the petitioner communicated respondent No.1 orally and also responded to the notice on 28.7.2018. In that communication dated 28.7.2018 the Income Tax Authority was conveyed that the mother Rosamma has been suffering from cancer and had passed away on 27.5.2014. The copy of the death certificate was also forwarded to the authority. It was mentioned in the said communication that she was staying at Pratapganj, Vadodara and that the petitioner did not have any knowledge about the transactions and about the nominations of the bank account etc. The petitioner was also not having knowledge about the details of the account and that no documents was in the petitioner’s possession.
3.1 On 5.9.2018 the respondent addressed letter to the petitioner stating that in capacity of legal heir he was required to complete the procedure of assessment. Another notice was issued to the petitioner on 2.11.2018 stating that the requirements were not complied with and that the factual details sought for in the notice dated 20.7.2018 was not supplied. In furtherance of the notice, Income Tax Authority passed ex-parte order dated 26.12.2018 under Section 144 read with Section 147 of the Act mentioning about the non-compliance. The petitioner had to file Revision Application under Section 264 of the Act.
3.2 It appears that the correspondence was made by the petitioner as the progress was not achieved. Finally without allowing the petitioner to represent his case, the respondent No.2 issued an order dated 24.3.2021, by which order dated 26.12.2018, which was passed by respondent No.1, came to be upheld.
3.3 The main ground urged by the petitioner was that the notice was issued to the mother who was dead person and that the notice to the dead assessee was invalid and illegal. It was submitted that despite intimation given to the authorities about the death, they proceeded against the dead person to frame assessment.
4. The question whether the income tax authorities can subject a dead person to assessment proceeding, is no longer res integra.
5. The Division Bench of this Court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1) (3) [(420) ITR 226], addressed the very issue. The Court considered various decisions of the Supreme Court and the High Court, touching the aspects of the issue, held that there cannot be any assessment against a dead person. In that case also, notice was issued to the dead assessee under Section 148 of the Act.
5.1 While holding that the proceedings would be nullity against the dead assessee, the rider was provided that in cases where legal representatives participate in the assessment or reassessment proceedings, the proceedings may be maintained and continued. It was at the same time held that mere intimation by the legal representative to the assessing officer that the noticee is dead, would not amount to legal representation on participation in that proceedings.
5.2 In Urmilaben Anirudhhasinji Jadeja (supra), while the revenue raised various contentions seeking a proposition that the proceedings against the dead assessee would be maintained, the Court negatived them all.
5.3 One of the contention was based on Section 292BB of the Act. The said provision contemplates that the notice shall be deemed to be valid in certain circumstances. It mentions that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to assessment or reassessment, it shall be deemed that a notice required to be served under the Act has been duly served upon him. Such, it is provided, shall be precluded by taking any objection about the service of the service of the notice and manner of the service.
5.4 The Division Bench held that the said provision would not apply in cases where notices are gone to the dead assessee and the proceedings are started against a dead assessee. It was observed and held in paragraph 23 thus,
“The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. To put it in other words, the notice should be in conformity with and in accordance with the intent and purpose of the Act. In our opinion, a case in which notice is issued to a dead person could be termed as nullity. It is something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor.”
5.4.1 The continuation of proceedings pursuant to notice under Section 148 of the Act was held to be without authority of law by the Court stating thus –
“…the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained.”
5.5 Thus, the law is well settled that unless the heirs and legal representatives of the deceased assessee could be said to have been submitted to the jurisdiction of the assessing officer and have participated in the assessment or re-assessment proceedings, notice to the dead assessee and commencement of assessment or re-assessment proceedings against dead person is rendered null and void.
5.6 The attempt on the part of the income tax authorities to start proceedings for assessment or re-assessment against the dead person is viewed not merely as procedural irregularity but it is stated as jurisdictional defect.
5.7 There cannot be an assessment against the dead person. As noticed above, the provisions of Section 292B of the Act are also not applicable and no assessment can be framed against a non-existing entity or a person who has died.
6. Recapitulating the facts of this case, the mother of the petitioner Rosamma died as back as on 27.5.2014. The petitioner intimated the authorities about the death and also forwarded the death certificate. He also conveyed that he was not the only heir and was not having knowledge about the transactions and the income affairs of the mother. Despite that the Income Tax Authority proceeded to issue notice and passed the assessment order.
6.1 There was no circumstance could be pointed out by the respondent nor it emerged from the facts on record that the petitioner in any way submits about the jurisdiction of the Income Tax Authority or sequised in the proceedings. Intimation was given about the death of the mother- the assessee but the authorities did not pay heed. The position of law emanating from the decision of this court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3) [(420) ITR 226] (supra) and also in Himadri Kandarp Mehta L/H Of Late Kandarp Yashashvibhai Mehta Vs. The Income Tax Officer being Special Civil Application No.16323 of 2019 decided as per the judgment dated 1.8.2022, could not be disputed by learned advocate for the respondent.
6.2 In view of the above, the present petition deserves to be allowed. It is hereby allowed by holding that the impugned notice, which was against the dead assessee could not be sustained.
7. As a result of above, the petition is allowed in terms of prayer 11.1. The impugned order dated 26.12.2018 passed by respondent No.1 under Section 144 read with Section 147 of the Income Tax Act is set aside. The demand notice of even date is also set aside. Further quashed is order dated 24.3.2021 under Section 264 of the Act. The assessment proceedings and the resultant assessment order are set aside having been passed against the dead person.
Rule is made absolute to the aforesaid extent.
