Reassessment Proceedings Void as Section 148A Notices Were Issued to a Deceased Person: Rajasthan HC

Meena V Kumar Vs PCIT (Rajasthan High Court)

The Rajasthan High Court considered the issue of whether proceedings initiated under Section 148A of the Income Tax Act, 1961, by issuance of notices under Section 148A(b) and culminating in an order under Section 148A(d), would be valid when the notices were initially issued to a deceased person.

The parties brought to the Court’s notice two earlier Division Bench decisions of the Rajasthan High Court: the order dated 27.05.2022 in Shri Radha Mohan Khandelwal Vs. Assistant Commissioner of Income Tax and the order dated 27.02.2024 in Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income Tax Officers & Ors.

After examining those decisions, the Court observed that the legal position was no longer res integra. It held that notices issued against a dead person and proceedings based on such notices are a nullity.

The Court further noted that in Legal Heirs of Smt. Sneh Lata Bhandari, the Division Bench had granted liberty to the Income Tax Department to reinitiate proceedings under Sections 148A(b) and 159 of the Income Tax Act. In that case, it was also directed that the period between the filing of the writ petition and its disposal would be excluded while computing the limitation period for initiating fresh proceedings.

Following the same principle, the Court held that where the original notices, which were subsequently challenged successfully, had been issued within the prescribed limitation period, there was no reason to deny the Department the liberty to initiate fresh proceedings against the legal representatives in accordance with Section 159 of the Income Tax Act.

Accordingly, while holding that the notices and proceedings initiated against the deceased person were invalid, the Court granted liberty to the Department to proceed afresh in accordance with law by reinitiating proceedings against the legal representatives. The writ petition was therefore allowed.

FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT

1. Heard.

2. The short issue arising for consideration in this case is whether the proceedings initiated under Section 148A of the Income Tax Act by issuing notices under Clause (b) therein, culminating in passing of an order under Clause (d) thereof, would be a nullity as the notices were initially issued against a dead person.

3. On this issue, learned counsel for the parties bring to the notice of this Court an order dated 27.05.2022 passed by Division Bench of this Court at Jaipur in Shri Radha Mohan Khandelwal Vs. Assistant Commissioner of Income Tax [D.B Civil Writ Petition No. 7896/2022] as also another order dated 27.02.2024 passed by Division Bench of this Court in Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income tax Officers & Ors. [D.B. Civil Writ Petition No. 9985/2023].

4. After going through the said orders, the legal position is no longer res integra and it can be declared that notices and proceedings against dead person would be a nullity.

5. In the case of Legal Heirs of Smt. Sneh Lata Bhandari(supra), the Division Bench of this Court has also granted liberty to the Department to re-initiate the proceedings under Section 148A(b) and Section 159 of the IT Act with specific order that the limitation period between the filing of the writ petition and till its disposal shall be excluded for the purpose of computation of limitation period for initiating such proceedings.

6. We are of the view that if the date on which initially notices were issued, which have been successfully assailed here, were within the period of limitation, there is no reason as to why the Department should not be given that liberty to take the proceedings under the provisions of law against the legal representatives in view of the provisions contained in Section 159 of the IT Act.

7. Therefore, granting liberty to the Department to proceed in accordance with law by re-initiating proceedings under the law, this petition is allowed.