Case Law Details

Case Name : Durlabhai Kanubhai Rajpara Vs ITO (Gujarat High Court)
Appeal Number : Special Civil Application No. 16125 of 2018
Date of Judgement/Order : 26/03/2019
Related Assessment Year :
Courts : All High Courts (5047) Gujarat High Court (462)

Durlabhai Kanubhai Rajpara Vs ITO (Gujarat High Court)

In the present case, the assessee ­petitioner has at first point of time objected to the issuance of notice under section 148 of the Act and has not participated or filed any return pursuant to notice. Therefore, legal representatives not having waived requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to impugned notice, provisions of section 292A of the Act also would not be attracted and hence notice under section 148 of the Act has to be treated as invalid.

The facts in the present case are identical to the case of Chandreshbhai Jayantibhai Patel (supra), as in the facts of the present case also father of the petitioner expired on 12.6.2016 and impugned notice was issued on 28.3.2018. In facts of the present case, even prior to issuance of notice, department was aware about the death of the petitioner’s father since on 13.3.2018 in response to the summons issued under section 131(1A) of the Act, the petitioner had intimated to the department about the death of his father. Therefore, it cannot be said that the respondent was not aware about the death of the father of the petitioner and he could have belatedly issued notice under section 159 of the Act upon the legal representatives of late Shri Kanubhai Nagjibhai Rajpara.

The contention advanced by the learned senior standing counsel for the respondent that since Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara was active, it can be presumed that tax payer was alive, cannot be sustained in view of the fact that only because Permanent Account Number is active, petitioner or any assessee is not liable to file the return of income and on that basis it cannot be presumed that the assessee is alive, more particularly, when the department is made to know about the death of the assessee prior to issuance of the impugned notice.

In view of the aforesaid settled legal proposition that no valid notice can be issued against a dead person, the impugned notice is required to be quashed and set aside.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

1. Rule. Ms. Kalpana Raval, learned senior standing counsel  waived service of notice  of rule on behalf of the respondent.

2. As   the   controversy   involved   in   the   petition   is   in   narrow compass,   same   is   taken   up   for   final   hearing   with   the consent of both the learned advocates for the parties.

3. By   the   present   petition   under   Article   226   of   the Constitution of India, the petitioner has challenged a notice dated 28.3.2018 issued under section 148 of the Income  Tax Act, 1961  (“the Act” for short) on the ground that the notice is without jurisdiction as the same is issued against a dead person.

4. The factual matrix of the case is that the notice is issued in the name of one Kanubhai Nagjibhai Rajpara, father of the petitioner herein, who has expired on 12.6.2015. By the impugned   notice,   respondent seeks   to   reopen   the assessment for the assessment year 2011-­2012.

4.1) On 15.1.2018, Dy. Director of Income­ tax (Inv)­1, Surat issued witness summons under section 131(1A) of the Act in the name of late Shri Kanubhai Nagjibhai Rajpara, father of the petitioner, to personally attend the office. Said notice was served upon the petitioner. The petitioner therefore, on 13.3.2018 furnished the death certificate of his late father Shri Kanubhai Nagjibhai Rajpara before the authority and submitted that he had expired on 12.6.2015, therefore, the notice is required to be withdrawn.

4.2) Thereafter, the impugned notice dated 28.3.2018 was issued in the name of late Shri Kanubhai Nagjibhai Rajpara. The petitioner also received a notice dated 16.7.2018 issued under section 142(1) of the Act, which was served upon the petitioner on 17.7.2018. The petitioner therefore filed reply dated 18.7.2018 and submitted that his father late Shri Kanubhai Nagjibhai Rajpara has expired on 12.6.2015. A copy of the death certificate was also annexed with the said reply. The petitioner also contended in the said reply that the fact of death of his father was also disclosed pursuant to the summons issued by the Dy. Director of Income ­tax (Inv)­1, Surat under section 131(1A) of the Act on 13.3.2018. The petitioner also relied on various case laws in support of his contention that the impugned notice is without any jurisdiction which is issued against a dead person and further prayed that the proceedings under section 148 of the Act should be dropped.

4.3) Respondent by letter/order dated 25.7.2018 however, rejected the objections raised by the petitioner on the ground that the petitioner has never given any intimation regarding the death of Shri Kanubhai Nagjibhai Rajpara to the jurisdictional Assessing Officer and further, it was also stated that notice under section 148 of the Act was served personally on 31.3.2018 at the address of the petitioner as well as by speed post. The petitioner was required to reply to the said notice by filing return. Respondent also stated that Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara is active and no intimation is given with regard to his death and therefore, notice issued under section 148 of the Act is proper and in accordance with law.

4.4) By another letter/order dated 8.8.2018, respondent by placing reliance upon section 292B of the Act, informed the petitioner that the notice issued under section 148 of the Act is a valid notice by reiterating what was stated in earlier letter/order dated 25/7/2018. More particularly, in paragraph no.6 of the letter/order dated 8.8.2018 it was informed to the petitioner that the Assessing Officer could not have come to know about the demise of the taxpayer or the names and addresses of the legal representatives without having intimated to the department in certain terms. The Permanent Account Number of the taxpayer remained active and the system does not allow entry of any other person’s name under section 159 of the Act. He therefore, concluded that the notice dated 28.3.2018 issued under section 148 of the Act is validated as per the provisions of section 292B of the Act and name of the petitioner be read in place of deceased assessee Shri Kanubhai Nagjibhai Rajpara in the address and subject of the relevant notice.

4.5) Being aggrieved by aforesaid order of rejecting the objections, petitioner has preferred the present petition challenging the jurisdiction to issue notice under section 148 of the Act.

5. Learned advocate Shri Bandish Soparkar for the petitioner submitted that the issue is no more res­integra inasmuch as this Hon’ble Court has on more than one occasion considered this issue and held that the notice under section 148 of the Act against a dead person is nullity and without jurisdiction and no proceedings can be continued pursuant to such notice. He relied upon the decision of this court in case of Chandreshbhai Jayantibhai Patel v/s. The Income Tax Officer (judgement dated in Special Civil Application No. 15172/2018) and decision in case of Rasid Lala v. Income­tax officer, Ward­1(3)(6) reported in (2017) 77 taxmann.com 39(Gujarat). He also relied upon the decision of Madras High Court in case of Alamelu Veerapan v. the Income Tax Officer, Non Corporate Ward 2(2), Chennai (order dated 7.6.2018 in Writ Petition No. 30060/2017). Relying upon the judgment in case of Chandreshbhai Jayantibhai Patel (supra), he contended that this Court have dealt in detail with regard to the issue of notice under section 148 of the Act against a dead person after analysing the provisions of section 2(7), 2(29) read with sections 159 and 292B of the Act. He placed reliance on the following findings of the court in the said judgment :

“16. On behalf of the revenue, it has been contended that issuance of the notice to the dead assessee is merely a technical defect which could be corrected under section 292B of the Act. Reliance has been placed on the above referred decisions of the Supreme Court as well as the High Courts for contending that the proceedings would not be null and void merely because the notice has been issued against a dead person as the legal representative had received the notice and has objected to the validity of the notice and further continuation of the proceedings. In the opinion of this court, here lies the distinction between those cases and the present case. In the relied upon cases, the legal representative, in response to the impugned notice, filed return of income and participated in the proceeding and then raised an objection to the validity of the proceeding and, therefore, the court held that this was a case of waiver and that a technical defect can be waived; whereas in this case, right from the inception the petitioner has objected to the validity of the notice and thereafter to the continuation of the proceeding and has at no point of time participated in the proceeding by filing the income tax return in response to the notice issued under section 148 of the Act. Had the petitioner responded to the notice by filing return of income, he could have been said to have participated in the proceedings, however, merely because the petitioner has informed the Assessing Officer about the death of the assessee and asked him to drop the proceedings, it cannot, by any stretch of imagination, be construed as the petitioner having participated in the proceedings.

17. Insofar as reliance placed upon section 292B of the Act is concerned, the said section, inter alia, provides that no notice issued in pursuance of any of the provisions of the Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice if such notice, summons is in substance and effect in conformity with or according to the intent and purpose of the Act.

18. 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 purposes 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 a 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. Therefore, where the legal representative does not waive his right to a notice under section 148 of the Act, it cannot be said that the notice issued against the dead person is in conformity with or according to the intent and purpose of the Act which requires issuance of notice to the assessee, whereupon the Assessing Officer assumes jurisdiction under section 147 of the Act and consequently, the provisions of section 292B of the Act would not be attracted. In the opinion of this court, the decision of this court in the case of Rasid Lala v. Income Tax Officer, Ward­1(3)(6) (supra) would be squarely applicable to the facts of the present case. Therefore, in view of the provisions of section 159(2)(b) of the Act, it is permissible for the Assessing Officer to issue a fresh notice under section 148 of the Act against the legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee.

19. In the facts of the present case, as noticed herein above, 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.”

6. On the other hand, learned advocate Shri Nikunt Raval with learned advocate Ms. Kalpana Raval reiterated what is stated in the orders dated 25.7.2018 and 8.8.2018 whereby the respondent has rejected the objections raised by the petitioner and held that notice under section 148 of the Act is validated as per the provisions of section 292B of the Act. He also referred to the relevant portion of the affidavit­ in­ reply to contend that the petitioner has never informed the respondent with regard to the demise of his father late Shri Kanubhai Nagjibhai Rajpara and names and addresses of legal representatives have never been furnished. He also submitted that the Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara remained active which indicated for the purpose of department that the taxpayer was alive. Moreover, he relied on provisions of section 159 of the Act to contend that unless information of deceased taxpayer has been provided and uploaded by the legal representatives, no action can be taken against the legal representatives and no notice can be issued against the legal representatives and, therefore, impugned notice under section 148 of the Act is validated pursuant to provisions of section 292B of the Act. It was submitted that mentioning the name of the deceased person in the notice is nothing but can only be said to be a mistake or omission and, therefore, such notice is a valid notice under section 148 of the Act and the proceedings pursuant to such notice are valid proceedings.

7. In the present case, the assessee ­petitioner has at first point of time objected to the issuance of notice under section 148 of the Act and has not participated or filed any return pursuant to notice. Therefore, legal representatives not having waived requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to impugned notice, provisions of section 292A of the Act also would not be attracted and hence notice under section 148 of the Act has to be treated as invalid.

8. The facts in the present case are identical to the case of Chandreshbhai Jayantibhai Patel (supra), as in the facts of the present case also father of the petitioner expired on 12.6.2016 and impugned notice was issued on 28.3.2018. In facts of the present case, even prior to issuance of notice, department was aware about the death of the petitioner’s father since on 13.3.2018 in response to the summons issued under section 131(1A) of the Act, the petitioner had intimated to the department about the death of his father. Therefore, it cannot be said that the respondent was not aware about the death of the father of the petitioner and he could have belatedly issued notice under section 159 of the Act upon the legal representatives of late Shri Kanubhai Nagjibhai Rajpara.

9. The contention advanced by the learned senior standing counsel for the respondent that since Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara was active, it can be presumed that tax payer was alive, cannot be sustained in view of the fact that only because Permanent Account Number is active, petitioner or any assessee is not liable to file the return of income and on that basis it cannot be presumed that the assessee is alive, more particularly, when the department is made to know about the death of the assessee prior to issuance of the impugned notice.

10. In view of the aforesaid settled legal proposition that no valid notice can be issued against a dead person, the impugned notice is required to be quashed and set aside.

11. For the foregoing reasons, petition succeeds and is accordingly allowed. Resultantly, impugned notice dated 28.3.2018 issued by the respondent under section 148 of the Act as well as further proceedings thereto are quashed and set aside.

12. Rule is made absolute accordingly . No order as to costs.

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