Case Law Details

Case Name : Urmila Saxena Vs Central Board of Direct Taxes (Madhya Pradesh High Court)
Appeal Number : Writ Petition No. 24807 of 2023
Date of Judgement/Order : 22/01/2024
Related Assessment Year :

Urmila Saxena Vs Central Board of Direct Taxes (Madhya Pradesh High Court)

In a recent judgment, the Madhya Pradesh High Court has quashed the notice under Section 148A(b) of the Income Tax Act, 1961, and the subsequent proceedings against a deceased assessee in the case of Urmila Saxena Vs. Central Board of Direct Taxes.

Background and Facts:

Urmila Saxena, the petitioner, is an old widow and legal heir of the late Shri Kamal Kumar Saxena, the deceased assessee. The petitioner filed a petition under Article 226 of the Constitution of India challenging the notice under Section 148A(b) for the assessment year 2015-16, dated 08.04.2022, and the order under Section 148A(d) dated 07.04.2022. The entire re-assessment proceedings were initiated against the deceased, leading the petitioner to contend that they are void ab initio and without jurisdiction.

The petitioner, an old and ailing homemaker, argued that the notice and proceedings were illegal, as the deceased had passed away on 09/11/2020, and the legal principle dictates that a notice issued in the name of a dead person is unenforceable in law.

Legal Submissions:

The petitioner’s counsel asserted that the essential condition for issuing a notice under Section 148 is that it must be issued to a living person, and in this case, the deceased had already passed away. The petitioner had duly provided the death certificate to the concerned officer shortly after the demise, making the subsequent reopening notice illegal.

Citing relevant case law, the counsel referred to the Gujarat High Court’s decision in Smt. Madhuben Kantilal Patel Vs. Union of India, where a similar reopening notice issued upon a deceased assessee was declared illegal.

Court’s Observations:

After hearing both parties, the court focused on the crucial question of whether the notice issued under Section 148 was enforceable when the assessee was no longer alive. The court noted that the fact of the deceased’s demise on 09.11.2020 was undisputed, rendering the notice issued in his name unenforceable in the eyes of the law.

The court referred to decisions by various high courts, including Delhi, Madras, and Mumbai, emphasizing that there is no statutory obligation on legal representatives to immediately intimate the death of the assessee to the income tax department.

Court’s Decision:

In light of the legal principles and precedents, the court declared that the reopening notice under Section 148 issued in the name of a deceased assessee was null and void, being without jurisdiction. The court quashed the notice dated 08.04.2022 and the order under Section 148A(d) dated 07.04.2022 for the assessment year 2015-2016. All consequential proceedings were prohibited.

However, the court granted liberty to the respondent to reinitiate proceedings against the petitioner, the legal heir, if deemed necessary. The petition was allowed with no order as to costs.

FULL TEXT OF THE JUDGMENT/ORDER OF MADHYA PRADESH HIGH COURT

Heard finally with the consent of parties.

The present petition under Article 226 of the Constitution of India challenges the notice under Section 148A(b) of the Income Tax Act, 1961 (referred to as ‘the Act of 1961’ hereinafter) for the assessment year 2015-16 dated 08.04.2022 issued in case No. ITBA/AST/F/148_1/2022-23/23/1042654010 (1) [Annexure P-4], as well as order u/S 148A(d) of the Act of 1961 dated 07.04.2022 [Annexure P-3] passed in case No. ITBA/AST/F/148_ 1/2022-23/23/1042633569 (1) for the assessment year 2015-16.

2. Brief facts of the case are that, the petitioner is an old widow and legal heir of Lt. Shri Kamal Kumar Saxena (Deceased Assessee) who has filed this writ petition praying for the issuance of a writ of Certiorari and Mandamus to quash the impugned Re-Assessment Proceedings for A.Y. 2015-16 initiated by way of issuance of Notice u/S 148A(b) of the Act Annexure (P/2), Order u/S 148A(d) of the Act (Annexure P/3) and subsequent impugned Notice u/S 148 of the Act (Annexure P/4) all being issued in the name of petitioner’s deceased husband Lt. Shri Kamal Kumar Saxena. The impugned re-assessment proceedings are being challenged on the ground that entire re-assessment proceedings started from issuance of notice u/S 148A(b) of the Act on the dead person and culminating into notice u/S 148 of the Act are being initiated against a dead person, therefore the impugned proceedings are bad in law, wholly without jurisdiction and void ab initio. That the petitioner is the wife and legal heir of the deceased Lt. Shri Kamal Kumar Saxena, who had died on 09/11/2020 and this fact is not disputed by the respondent authorities. The petitioner is an old and ailing home-maker and is living with the support of her own saving. Hence the present petition is filed.

3 . Learned counsel for the petitioner submitted that an essential condition to issue notice u/S 148 of the Act of 1961 is that the notice be issued to the person who is alive and the same cannot be issued to a dead person. He further submitted that the deceased husband of the petitioner had passed away on 09.11.2020, as is evident from his death certificate. The settled legal principle in such cases is that a notice issued in the name of the dead person is unenforceable in law. Keeping this legal position in mind, coupled with the fact that the petitioner had already intimated about the death of her husband Lt. Shri Kamal Kumar Saxena, the Revenue is and would not be justified at all in contending that they having the knowledge about the death of the petitioner’s husband, are entitled to plead that the impugned notice under Section 148 is not defective.

4 . It is further submitted that where petitioner-legal heir of assessee-deceased had supplied death certificate of assessee to concerned officer within a short period after his/her demise, impugned reopening notice issued subsequently under Section 148 of the Act of 1961 in the name of the deceased was illegal and thus liable to be set aside as held in the case of  Smt. Madhuben  Kantilal Patel Vs. Union of India reported in [2023]148 taxmann.com  202(Gujarat).

5 . He further placed reliance on the case of J. Kishorekumar V.  Income Tax Officer reported in [2022] 139 taxmann.com 47 (Madras)  wherein it has been held as under:

“Where petitioner, legal representative challenged impugned notice issued under Section 148 on the ground that notice had been issued in name of his deceased father, revenue was to be directed to issue appropriate notice to petitioner under Section 148 of the Act of 1961 as a legal representative.”

6. He also placed reliance on the case of Krishnaawtar Kabra Vs. Income Tax Officer reported in [2022] 140 com 432 (Gujarat)  [29.03.2022] where it has been held that reopening notice u/S 148 issued upon deceased assessee was void ab intio and therefore consequential proceedings and orders passed thereon were without any jurisdiction and where to be quashed and set aside.

7. Learned counsel for the respondent/Income Tax Department by placing reliance on the various judgments of the Apex Court as well as the High Court submitted that petition against order u/S 148A(d)/Notice u/S 148 of the Act of 1961 for initiation of reassessment proceedings is not tenable as all such objection have to be raised before the Assessing Officer as it is not a final adjudication of the matter where no further statutory remedy against the adjudication order is available.[Salil Gulati Vs. ACIT (2023 (455 ITR 29 (SC), Ajay Gupta V ITO 454 ITR 794 (SC) (2023), Seema Gupta Vs ITO  455 ITR 504 2023(SC) , Anshul Jain Vs. PCIT Specal Leave to  Appeal (C) No. 14823/2022, Harinder Singh Bedi Vs. UOI (MP) W.P. NO.  22734/2022, and Amrit Homes Pvt. Ltd. V/S DCIT W.P.  NO. 15244/2023 (M.P.)]

8. She further submits that the question of going into the veracity and genuineness of material/evidence forming the opinion of the Assessing Officer suggesting that income of petitioner has escaped assessment ought not be gone into while exercising writ jurisdiction under Article 226 or Supervisory jurisdiction under Article 227 of the Constitution of India. On all these grounds the present petition deserves to be dismissed at the admission stage itself. However, petitioner would be at liberty to avail the statutory remedy under the Income Tax Act in accordance with law.

9. We have heard learned counsel for the parties and perused the record.

10. The issue which falls for consideration of this Court is as to whether the impugned notice under Section 148 of the Act of 1961 is issued in the name of dead person i.e. Shri Kamal Kumar Saxena is enforceable in law. The fact that Shri Kamal Kumar Saxena died on 09.11.2020 is not disputed. The notice issued in the name of the dead person is unenforceable in the eyes of law.

11. It has been observed by the Delhi High Court in the case of Savita  Kapila Vs. Asstt. CIT reported in [2020]11 com 46/273 Taxman  148/426 IRT 502/108 CCH 0049 DelHC] as under:

“In the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department.”

“Consequently, the legal heirs are under no statutory obligation to intimate the death of the assessee to the revenue.”

12. The Madras High Court in the case of Alamelu Verappan(supra)  has observed as under:

“Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee to take steps to cancel the PAN registration.”

13. Similar view has been taken by the High Court of Mumbai in Sumit Balkrishna Gupta Vs. Asstt. CIT[2019] 103 taxmann.com 188/262  Taxman 61/414 ITR 292/104 CCH 0379 MumHC] wherein it has been observed as under:

“7. The issue of a notice under Section 148 of the Act is a foundation for reopening of assessment. The sine qua non for acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of the correct person. This requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee. The assessee on whom the notice must be sent must be a living person i.e. legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and purpose of the Act. Therefore, Section 292B of the Act cannot be invoked to correct a foundational/substantial error as it is meant so as to meet the jurisdictional requirement.”

14. In view of the above, reopening notice under Section 148 of the Act, 1961 issued in the name of a dead assessee is null and void being without jurisdiction. Recently, this Court in the order dated 23.11.2023 passed in W.P. No. 9697/2022 has also held that notice and all consequential proceedings arising therefrom in the name of deceased assessee are not sustainable.

15. In view of the above and that various High Courts as well this Court has recently observed that the notice issued to a dead person for reopening of assessment of a dead person is null and void, this Court holds that the notice and all consequential proceedings arising therefrom in the name of the deceased assessee are not sustainable.

16. Consequently, the impugned notice dated 08.04.2022 passed in case No. ITBA/AST/F/148_1/2022-23/23/1042654010 (1) as well as order u/S 148A(d) of the Act of 1961 dated 07.04.2022 for the assessment year 2015-2016 are quashed and all actions in furtherance thereto are prohibited. However, liberty is given to the respondent to reinitiate proceedings against the petitioner/legal heir of deceased Shri Kamal Kumar Saxena, if so advised.

17. Petition is therefore allowed. No order as to cost.

Download Judgment/Order

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