Yash Nirupam Nanavaty Vs ITO (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by Yash Nirupam Nanavaty, legal heir and son of the deceased-assessee, challenging a notice issued under Section 148 of the Income-tax Act, 1961 in the name of the deceased assessee for Assessment Year 2012-13. The Court held that a reassessment notice issued against a dead person is invalid, void ab initio and without jurisdiction, and that the defect could not be cured by subsequently treating the notice as having been issued against the legal heir.
The deceased-assessee expired on 11 November 2018. No return under Section 139(1) had been filed for AYs 2012-13 to 2014-15. On 8 March 2019, the Assessing Officer issued a notice under Section 148 in the name of the deceased-assessee proposing to reopen the assessment for AY 2012-13. On 4 April 2019, the petitioner informed the Department about the death and enclosed the death certificate, while objecting that the notice and proposed reassessment proceedings were without jurisdiction. The Assessing Officer nevertheless rejected the objection by order dated 3 October 2019 and stated that the notice under Section 148 should be treated as issued against the legal representative in view of Section 159.
The petitioner submitted that a valid notice under Section 148 is the foundation for assuming jurisdiction to reopen an assessment and that a notice issued in the name of a deceased person is non est. Reliance was placed upon, among others, Bhupendra Bhikhalal Desai, the Supreme Court’s dismissal of the Special Leave Petition arising therefrom, Vikram Bhatnagar, Nilesh Markhibhai Karangiya, Bipinbhai, Himadri Kandarp Mehta, Urmilaben Anirudhhasinhji Jadeja, Chandreshbhai Jayantibhai Patel and Principal Commissioner of Income Tax v. Maruti Suzuki India Ltd.
The Revenue did not dispute that the notice was issued in the name of the deceased-assessee. It contended that the reopening had been initiated in accordance with the applicable procedure, that the Department had no information regarding the death when the notice was issued, and that the notice could be treated as one issued against the legal heir. Reliance was also placed upon the Department’s Non-filer Monitoring System and information concerning high-value transactions, including cash deposits of Rs.10 lakhs or more, purchase of mutual fund units of Rs.2 lakhs or more and time deposits of Rs.1 lakh or more. The Revenue argued that, under Section 159, the legal heir was responsible for the tax liabilities of the deceased.
The Court noted that the notice dated 8 March 2019 was issued just before completion of six years from the end of AY 2012-13, while the assessee had already died on 11 November 2018. The Department was informed of the death by the legal heir on 4 April 2019. Thus, the notice was admittedly issued against a dead person.
Relying upon its earlier decision in Bhupendra Bhikhalal Desai, against which the Supreme Court had dismissed the Special Leave Petition, the Court reiterated that an Assessing Officer cannot assume jurisdiction by issuing a notice to a dead person. It further relied upon Himadri Kandarp Mehta and Nishant Daxeshbhai Mehta, followed in Nilesh Markhibhai Karangiya and Bipinbhai, where reassessment notices issued against deceased persons were quashed.
The Court rejected the Assessing Officer’s approach of treating the original notice as one issued against the legal heir after the death had been brought to the Department’s notice. The Court also referred to the Supreme Court decision in Maruti Suzuki India Ltd., concerning proceedings against a non-existent amalgamating company, and to the Delhi High Court decision in Vikram Bhatnagar, which had followed the principle that a jurisdictional notice must be issued to the correct person.
The Court reproduced the relevant reasoning from Chandreshbhai Jayantibhai Patel that a notice under Section 148 is a jurisdictional notice and that existence of a valid notice is a condition precedent for the Assessing Officer to exercise jurisdiction under Section 147. It also referred to Alamelu Veerapan, where the Madras High Court held that Section 159 could not be invoked where proceedings had not already been initiated while the assessee was alive and were instead commenced against the deceased person after death.
On the undisputed facts, the Gujarat High Court concluded that no notice under Section 148 could have been issued against the deceased assessee and that the subsequent order rejecting the objection was also without jurisdiction. The petition was accordingly allowed. The notice dated 8 March 2019 and the order dated 3 October 2019 were quashed and set aside, and the Rule was made absolute with no order as to costs.
Cases Discussed
- Bhupendra Bhikhalal Desai Vs Income Tax Officer — 130 taxmann.com 196 (Gujarat); SLP dismissed by the Supreme Court.
- Income Tax Officer Vs Bhupendra Bhikhalal Desai — 131 taxmann.com 40 (SC), SLP dismissed.
- Vikram Bhatnagar as Legal Representative Acting for and on behalf of Legal Heirs of Late SH Virendra Kumar Bhatnagar (Deceased) Vs Assistant Commissioner of Income Tax — W.P. (C) 12215/2021, Delhi High Court, 9 November 2022.
- Nilesh Markhibhai Karangiya Vs Income Tax Officer — [2025] 174 taxmann.com 167 (Guj).
- Bipinbhai Vs Income Tax Officer — [2025] 179 taxmann.com 423 (Guj).
- Himadri Kandarp Mehta Vs Income Tax Officer — [2023] 457 ITR 92 (Guj).
- Urmilaben Anirudhhasinhji Jadeja Vs Income Tax Officer — [2020] 420 ITR 226 (Guj).
- Chandreshbhai Jayantibhai Patel Vs Income Tax Officer — 413 ITR 276 (Guj).
- Principal Commissioner of Income Tax Vs Maruti Suzuki India Ltd. — 2019 416 ITR 613 (SC).
- Savita Kapila Vs Assistant Commissioner of Income Tax — W.P. (C) No. 3258 of 2020, Delhi High Court.
- Sumit Balkrishna Gupta Vs Assistant Commissioner of Income Tax — [2019] 414 ITR 292 (Bom).
- Alamelu Veerapan Vs Income Tax Officer — [2018] 12 ITR-OL 95 (Mad).
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr.S.N.Divatia for the petitioner and learned Senior Standing Counsel Mr. Aaditya D. Bhatt for the respondent.
2. Rule, returnable forthwith. Learned advocate Mr. Aaditya Bhatt waives service of rule on behalf of the respondent.
3. As the controversy raised in this petition is in narrow compass, with the consent of the parties, the same is taken for hearing. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs :
“(a) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ. orders or directions quashing and setting aside the impugned notice dated 08-03-2019 [ANNEXURE-A] issued by the Respondent proposing to reopen the completed assessment of the Petitioner for AY. 2012-13 and the order of objection dt.03-10-2019 (Annexure-B);
(b) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ orders or directions to furnish the copy of reasons recorded for reopening;
(c) To allow the Petitioner to amend the Petition in view of the reasons recorded and order that may be passed, if any, by the Respondent disposing off the objections;
(d) To call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order.”
4. The brief facts of the case are as under:
4.1. The petitioner is a legal heir and son of the deceased-assessee who expired on 11th November 2018. The deceased-assessee filed Return of Income upto Assessment Year 2011-12 and thereafter from Assessment Years 2015-16 to 2018-19, but, no return was filed under Section 139(1) of the Income Tax Act, 1961 (for short ‘the Act’) for Assessment Years 2012-13 to 2014-15.
4.2. The respondent issued a notice dated 8th March 2019 under Section 148 of the Act for Assessment Year 2012-13 in name of the deceased-assessee proposing to re-open the assessment for the said year.
4.3. By letter dated 4th April 2019, the respondent was informed that the impugned notice under Section 148 of the Act as well as the proceedings proposed to be initiated under Section 147 of the Act are without jurisdiction because the notice under Section 148 of the Act was issued in name of the deceased-assessee and a copy of the Death Certificate was also enclosed with the said letter.
4.4. The respondent, by letter dated 3rd October 2019 rejected the objection raised by the petitioner on the ground that the legal representative of the deceased-assessee is fully responsible to comply with the impugned notice in view of the provisions of Section 159 of the Act. The respondent also stated in the said letter that the notice issued under Section 148 of the Act be treated as issued against the legal representative of the deceased-assessee.
4.5. Being aggrieved by the issuance of the notice under Section 148 of the Act as well as the rejection of the objection, by letter dated 3rd October 2019, the petitioner has preferred this petition with a prayer to quash and set aside the impugned notice being without jurisdiction as the same is issued in name of the deceased -assessee.
4.6. This Court by order dated 16th October 2019 issued the notice and restrained the respondent from proceeding further pursuant to the impugned notice dated 8th March 2019 issued under Section 148 of the Act for Assessment Year 2012-13.
5.1. Learned advocate Mr.S.N.Divatia for the petitioner submitted that as per the settled legal position, the impugned notice dated 8th March 2019 and the order dated 3rd October 2019 are without jurisdiction as the same are issued in name of the deceased-assessee. It was submitted that valid notice is a foundation for assuming the jurisdiction to re-open the assessment under Section 148 of the Act.
5.2. It was submitted that the invalid notice will invalidate the jurisdiction of the Assessing Officer to proceed with the re-assessment and the validity of such proceedings would be void ab intio.
5.3. In support of his submissions, learned advocate Mr.S.N.Divatia has placed reliance on the following decisions :
(i) Bhupendra Bhikhalal Desai Versus Income Tax Officer reported in 130 taxmann.com 196 (Guj);
(ii) Income Tax Officer versus Bhupendra Bhikhalal Desai reported in 131 taxmann.com 40(SC), SLP dismissed;
(iii) Vikram Bhatnagar as Legal Representative Acting for and on behalf of Legal Heirs of Late SH Virendra Kumar Bhatnagar (Deceased) Versus Assistant Commissioner of Income Tax in W.P. (C) 12215/2021 dated 9th November, 2022 (Del);
(iv) Nilesh Markhibhai Karangiya Versus Income Tax Officer reported in [2025] 174 taxmann.com 167 (Guj);
(v) Bipinbhai Versus Income Tax Officer reported in [2025] 179 taxmann.com 423 (Guj);
(vi) Urmilaben Anirudhhasinhji Jadeja Versus Income Tax Officer reported in 2020 420 ITR 226 (Guj);
(vii) Chandreshbhai Jayantibhai Patel Versus Income Tax Officer reported in 413 ITR 276 (Guj);
(viii) Principal Commissioner of Income Tax Versus Maruti Suzuki India Ltd. reported in 2019 416 ITR 613(SC).
5.4. It was submitted that in view of the above decisions, whereby, it is settled legal position that notice issued against the dead person, that is an individual or a company not in existent, is invalid as issuing notice to a dead person would be non est. It was therefore submitted that requirement of issuing a notice to the correct person on a death of assessee is not a mere procedural requirement but is a condition precedent to the notice being valid in law.
5.5. It was therefore submitted that respondent could not have assumed the jurisdiction to re-open the proceeding for Assessment Year 2012-13 in name of the dead person.
6.1. On the other hand, learned Senior Standing Counsel Mr. Aaditya Bhatt for the respondent could not controvert the fact that the notice was issued in name of the deceased-assessee. He referred to and relied upon the averments made in the affidavit-in-reply to submit that the re-opening proceeding is as mandated by law has been initiated in accordance with the extant procedure established after following the due process, inasmuch as, in the order dated 3rd October 2019, it was clearly stated that the notice under Section 148 of the Act be treated as issued against the legal heir.
6.2. It was further submitted that admittedly no return was filed for the Assessment Years 2012-13 to 2014-15 and hence the deceased-assessee was identified as a non- filer by the on-line Non-intrusive Computer System devised by the Income Tax Department. It was submitted that Non-filer Monitoring System (NMS) is a mechanism wherein, Income Tax Department is in possession of the electronic data pertaining to certain High Value Transactions carried out by the assessee and as the deceased-assessee did not file the Return of Income for relevant year, the case was categorised as non-filer for the Department and notice was issued under Section 148 of the Act as there was no information available with the department regarding death of the asssessee.
6.3. Learned Senior Standing Counsel Mr. Aaditya Bhatt has placed reliance on the information received by the Assessing Officer, annexed at Annexure ‘A’ to the affidavit-in-reply, to point out that action was initiated on 31st August, 2013 and was open for compliance upto 11th November, 2018 till the demise of the assessee in view of the information available with the Department for the year under consideration pertains to Cash Deposit of Rs.10 Lakhs or more, purchase of Units of Mutual Fund of Rs.2 Lakhs or more and Time Deposit of Rs.1 Lakh or more. It was therefore submitted that the legal heirs of the deceased-assessee should file the return in response to the notice issued under Section 148 of the Act, as the same is a valid notice to be treated as issued against the legal heirs as per the order dated 3rd October, 2019.
6.4. It was submitted that no information is available with the Department that the assessee had expired and hence, the action was required to be taken against the legal heirs. It was submitted that as per Section 159 of the Act, it was the duty of the petitioner who is a legal heir, is responsible for paying any tax owed by the deceased.
7. Having heard the learned advocates for the parties and on perusal of the documents placed on record, it is not in dispute that the impugned notice under Section 148 of the Act was issued on 8th March 2019 to re-open the assessment for Assessment Year 2012-13 just before completion of six years on the end of the Assessment Year. It is also not in dispute that the deceased-assessee, in whose name the notice under Section 148 of the Act is issued, expired on 11th November, 2018 and the same was informed to the respondent by the legal heir of the assessee by letter dated 4th April, 2019. Thus, impugned notice is admittedly issued against the dead person.
8. It is settled legal position that the respondent-Assessing Officer could not have assumed the jurisdiction by issuing a notice upon a dead person. This Court in case of Bhupendra Bhikhalal Desai (Supra) has held that the notice issued for commencement of assessment or reassessment proceedings against the dead person is null and void and such notice cannot be sustained. Against the said decision of this Court, the Hon’ble Supreme Court has dismissed the Special Leave Petition.
9. The facts of the present case are also similar to the decision in case of Himadri Kandarp Mehta versus Income Tax Officer reported in [2023] 457 ITR 92 (Guj) wherein, in similar facts, a notice for re-opening was set aside having been issued against the dead person and this decision is followed in the case of Nishant Daxeshbhai Mehta versus Income Tax Officer reported in [2023] 152 taxmann.com 95 (Guj), by quashing such notice issued against the dead person. These decisions are followed in cases of Nilesh Markhibhai Karangiya (Supra) and Bipinbhai (Supra).
10. In the facts of the present case also, it was informed to the Assessing Officer about the death of the assessee by letter dated 4th April 2019, however, the Assessing Officer, by order dated 3rd October 2019, rejected the objection raised on behalf of the deceased-assessee and instead of dropping the proceedings, has ordered that the proceedings would continue and the notice for re-opening be treated as having been issued against the legal heir.
11. The Hon’ble Apex Court in case of Maruti Suzuki India Ltd (Supra), in relation to the amalgamation of the Company, has also held that the notice for re-opening against the Company which is not in existence, would be without any jurisdiction and accordingly, such notice was also set aside.
12. The Hon’ble Delhi High Court in case of Vikram Bhatnagar (Supra), in similar facts, quashed and set aside the notice by relying upon the another decision of the Delhi High Court in case of Savita Kapila Versus Assistant Commissioner of Income Tax in W.P. (C) No.3258 of 2020 wherein, the decision of Bombay High Court in case of Sumit Balkrishna Gupta Versus Assistant Commissioner of Income Tax reported in [2019] 414 ITR 292 and the decision of this Court in case of Chandreshbhai Jayantibhai Patel (Supra) were followed. In case of Chandreshbhai Jayantibhai Patel (Supra), this Court has held as under:
“The question that therefore arises for consideration is whether the notice under Section 148 of the Act issued against the deceased-assessee can be said to be in conformity with or according to the intent and purpose of the Act. In this regard, it may be noted that a notice under section 148 of the Act is a jurisdictional notice, and existence of a valid notice under section 148 is a condition precedent for exercise of jurisdiction by the Assessing Officer to assess or reassess under section 147 of the Act. The want of valid notice affects the jurisdiction of the Assessing Officer to proceed with the assessment and thus, affects the validity of the proceedings for assessment or reassessment. A notice issued under section 148 of the Act against a dead person is invalid, unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection.”
13. In the case of Alamelu Veerapan Versus Income Tax Officer reported in [2018] 12 ITR-OL 95 (Mad), the Madras High Court while considering as to whether provision of section 159 of the Act would apply in case of notice issued in name of a dead person, it has held as under:
“In such circumstances, the question would be as to whether section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being, otherwise, the provisions of section 159 of the Act have no application”.
14. In view of the above undisputed facts and in view of the settled legal position that the notice for re-assessment issued against a dead person is invalid, void ab initio and without jurisdiction, we are of the opinion that no such notice, under Section 148 of the Act, could have been issued and no such order, rejecting such objections, could have been passed by the Assessing Officer as the same are without jurisdiction.
15. The petition succeeds and is accordingly allowed, impugned notice dated 8th March 2019, issued under Section 148 of the Act and the order dated 3rd October 2019, are hereby quashed and set aside. Rule is made absolute, no order as to cost.
