Case Law Details
Late Shri Jayantilal Kalidas Shah L/h. Shri Japan N. Shah Vs ITO (ITAT Ahmedabad)
in the absence of a statutory provision the duty cannot be cast upon legal representative to intimate factum of death of assessee to department and thus, where AO issued a notice to the assessee under Section 148 of the Act after his death and in such a case it could not have been validly served upon the assessee the said notice being invalid is required to be quashed.
ITAT find that the factum of death of the assessee on 20.06.2011 was already in the knowledge of the Ld. AO which is evident from Page 4 Paragraph 6.1 of the AO. Under these circumstances is the revenue who is to take proper step while issuing notice under Section 147 of the Act instead it is finalized in the name of the deceased. In this regard, we have considered the judgment passed in the matter of Shri Rajesh G. Shah (supra) and the judgment passed by the Delhi High Court in the case of Savita Kapila (supra) where it has been held that in the absence of a statutory provision the duty cannot be cast upon legal representative to intimate factum of death of assessee to department and thus, where AO issued a notice to the assessee under Section 148 of the Act after his death and in such a case it could not have been validly served upon the assessee the said notice being invalid is required to be quashed. Thus, taking into consideration the entire aspect of the matter and relying upon the ratio laid down in the above matter we do not hesitate to hold that the notice under Section 148 of the Act issued on 31.03.2017 in the name of Jayantilal K. Shah who has died on 20.06.2011 is invalid. The proceeding is, therefore, void ab initio and hereby quashed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The instant appeal filed by the assessee is directed against the order dated 29.03.2019 passed by the Commissioner of Income Tax (Appeals)-5, Ahmedabad arising out of the order dated 02.11.2017 passed by the ITO, Ward-5(3)(4), Ahmedabad under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred as to “the Act”) for A.Y. 2010-11.
2. The short question involved in this particular case is this as to whether the notice for re-opening of Assessment Year under Section 148 of the Act issued in the name of deceased person the valid or not.
3. We have heard the respective parties and also perused the relevant materials available on record.
4. The brief facts leading to the case is this that the applicant before us namely Japan N. Shah is the legal heir of the assessee Jayantilal Kalidas Shah left for his heavenly on 20.06.2011. The copy of the death certificate is on record before us. A notice under Section 148 for re-opening of assessment was issued in the name of Jayantilal K. Shah since deceased on 31.03.2017. Therefore, the notice appearing at Page 13 annexed to the Paper Book before us is admittedly issued in the name of dead person. The said proceeding under Section 143(3) r.w.s. 147 was finalized on 02.11.2017 in the name of the deceased. It is also evident from the records that the notice under Section 142 of the Act was served upon legal heir the Japan N. Shah being the grandson of the assessee. It is also on record as available from the observation made by the Ld. AO that death of assessee namely Jayantilal K. Shah on 20.06.2011 was duly brought to the notice of the Ld. AO. Even thereafter, the said proceeding under Section 147/148 was finalized in the name of the deceased person which was further confirmed by the Ld. CIT(A).
5. The Ld. Counsel appearing for the assessee under the present facts and circumstances of the case vehemently argued for quashing of the proceeding initiated and continued and finalized against the dead person. In this regard, he has further relied upon the judgment passed by the Coordinate Bench in the case of Shri Rajesh G. Shah vs. ITO in ITA No. 2232/Ahd/2018 for A.Y. 2007-08 and in the case of Savita Kapila vs. ACIT, reported in (2020) 118 com 46 (Delhi) and in the case of Alamely Verrapan vs. ITO, reported in (2018) 257 taxmann.com 72 (Madras).
4. On the other hand the Ld. DR submitted that it is the duty cast upon the legal representative to intimate the factum of death of the assessee to the department and, thus, he supports the order passed by the authorities below.
5. It is a settled position of law neither re-opening notice can be issued in the name of the deceased person nor the same can be continued against the deceased. The Ld. A.R. further relied upon the judgment passed by the Coordinate Bench on the identical facts in the matter of Shri Rajesh G. Shah vs. ITO in ITA No. 2232/Ahd/2018 for A.Y. 2007-08 and the judgment passed by the Hon’ble Delhi High Court in the case of Savita Kapila vs. ACIT, reported in (2020) 118 taxmann.com 46 (Delhi). While dealing with the issue the Coordinate Bench has been placed to observe as follows:
“6. Admittedly after the demise of the assessee on 05.01.2011 the notice under Section 148 dated 07.03.2014 was sought to be served upon her and finally the assessment proceeding was also finalized under Section 143(3) r.w.s. 147 on 26.03.2015. The above fact was duly placed before the First Appellate Authority by the representative of the deceased assessee which is also appearing at Page 2 Para 3.1 of the order passed by the First Appellate Authority; the same reads as follows:-
“3.1 During the course of appellate proceedings, the appellant filed written submission dtd. 16.08.2016 and the relevant portion of the same is reproduced as under:-
“The undersigned appellant was assessed to tax at Mumbai in earlier years. There is no facts concealed by the undersigned appellant. The learned AO has issued a notice of reopening on deceased person and a frame the assessment on that the deceased person. This action of the learned AO is not within the provision of the law. In spite of these facts, the completed assessment has been reopened by the learned AO which is not within the provisions of the law and therefore the impugned reassessment order passed is bad in law and deserves to be cancelled””
7. It is a settled principle of law that reopening notice issued in the name of a deceased person is not tenable in the eye of law. Neither the reopening notice under Section 148 issued to a dead person could be continued against legal representatives. Reliance is placed on the judgment passed by the Hon’ble Jurisdictional High Court in the case of Urmilaben Anirudhsinhji Jadeja vs. ITO, reported in 420 ITR 226 (Gujarat), PCIT vs. Maruti Suzuki India Ltd., reported in (2019) 416 ITR 613 (SC) and Chandreshbhai Jayantibhai Patel vs. ITO, reported in (2019) 413 ITR 276 (Gujarat). The ratio laid down in the order passed by the Hon’ble Madras High Court in the case of Alamela Veerappan vs. ITO, reported in [2018] 95 taxmann.com 155/257 Taxman 72 (Mad.) has also been considered by us where the ratio as above has been laid down.”
8. Further that we find that the factum of death of the assessee on 20.06.2011 was already in the knowledge of the Ld. AO which is evident from Page 4 Paragraph 6.1 of the AO. Under these circumstances is the revenue who is to take proper step while issuing notice under Section 147 of the Act instead it is finalized in the name of the deceased. In this regard, we have considered the judgment passed in the matter of Shri Rajesh G. Shah (supra) and the judgment passed by the Delhi High Court in the case of Savita Kapila (supra) where it has been held that in the absence of a statutory provision the duty cannot be cast upon legal representative to intimate factum of death of assessee to department and thus, where AO issued a notice to the assessee under Section 148 of the Act after his death and in such a case it could not have been validly served upon the assessee the said notice being invalid is required to be quashed. Thus, taking into consideration the entire aspect of the matter and relying upon the ratio laid down in the above matter we do not hesitate to hold that the notice under Section 148 of the Act issued on 31.03.2017 in the name of Jayantilal K. Shah who has died on 20.06.2011 is invalid. The proceeding is, therefore, void ab initio and hereby quashed.
9. In the result, the appeal preferred by the assessee is allowed.
This Order pronounced in Open Court on 10/03/2022
