Calcutta HC Quashes Section 154 Tax Notice Issued to Deceased

Goutam Sadhan Bose Vs ACIT (Calcutta High Court)

Introduction: The case “Goutam Sadhan Bose Vs ACIT (Calcutta High Court)” pertains to an extraordinary situation where the Calcutta High Court was called upon to decide on the validity of an Income Tax assessment notice issued under Section 154 of the Income Tax Act, 1961 against a deceased person. The assessment notice was dated 17th March 2023 and related to the assessment year 2015-16.

Analysis: The key issue at the heart of this case was the issuance of an assessment notice to a deceased individual, despite the department having prior information about the death. This raised questions about procedural propriety and the extent of diligence exercised by the assessing officer.

The Calcutta High Court, after hearing both parties, deemed the notice to be improper and quashed it. The judgment emphasized the following critical points:

1. Prior Knowledge of Death: The department’s acknowledgment that it had prior information about the death of the noticee highlighted a clear lack of due diligence in proceeding with the notice.

2. Quashing of the Notice: The court’s decision to quash the notice under Section 154 of the Income Tax Act, 1961, reflects a commitment to uphold procedural fairness and the rule of law.

3. Possibility of Reissuance: While the notice was quashed, the court explicitly stated that this would not be a barrier to the respondent Income Tax Authority concerned issuing a fresh notice in the future, in accordance with the law. This ensures that the matter can be properly addressed following proper legal procedures.

Conclusion: The decision by the Calcutta High Court in the case of “Goutam Sadhan Bose Vs ACIT” underscores the importance of adherence to procedural norms and the rule of law. The court’s ruling reaffirms that even administrative mistakes, such as issuing a notice to a deceased person, are subject to judicial scrutiny. Moreover, by leaving room for the proper reissuance of the notice, the judgment balances the need for administrative efficiency with legal propriety. It serves as a reminder to administrative authorities to act with care, diligence, and in strict adherence to legal protocols.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: Heard both the parties.

By this writ petition, petitioner has challenged the impugned notice under Section 154 of the Income Tax Act, 1961, dated 17th March, 2023 relating to assessment year 2015-16 on the ground that the noticee is a dead person and such notice has been issued by the assessing officer in spite of having prior information about the death of the notice.

Mr. Bhattacharjee, learned advocate appearing for the respondents on instruction based on record submits that the department had on record the information about the death of the notice prior to issuance of the aforesaid impugned notice.

Considering the facts and circumstances of the case as appears from record and submissions of the parties, this writ petition being WPO 1349 of 2023 is disposed of by quashing the aforesaid impugned notice under Section 154 of the Act.

However, quashing of the notice will not be a bar on the part of the respondent Income Tax Authority concerned to issue any fresh notice in future in accordance with law.