Neena Jatin Shah Vs ITO (Bombay High Court)
The Bombay High Court heard a writ petition filed by the petitioner, Neena Jatin Shah, seeking to quash the show cause notice dated 11 August 2024 issued under Section 148A(b), the order dated 31 August 2024 passed under Section 148A(d), and the consequential notice dated 31 August 2024 issued under Section 148 of the Income Tax Act, 1961, for Assessment Year (A.Y.) 2018–19. The principal ground of challenge was that all the notices and orders were issued in the name of a deceased person, namely Jatin Bhagwandas Shah, the petitioner’s husband, who had passed away prior to the initiation of the proceedings.
It was not in dispute that the notices and order had indeed been issued in the name of the deceased assessee. The Court noted that Jatin Bhagwandas Shah had died on 23 February 2019, and this fact had been duly intimated to the Income Tax Department through a letter dated 1 April 2019. Despite being informed of the death, the Department proceeded to issue a notice under Section 148 for A.Y. 2018–19 in August 2024, in the name of the deceased.
The Court also took note of the fact that, for A.Y. 2013–14, the Department had earlier initiated similar reassessment proceedings against the same deceased individual, but those proceedings had been dropped once the Department acknowledged that the assessee had passed away before the issuance of the notice. In that earlier proceeding, an order dated 28 July 2022 under Section 148A(d) had clearly recorded that the assessee had expired on 25 February 2019 and that the notice under Section 148, issued on 24 April 2021, was invalid because it was addressed to a deceased person. The Department had, therefore, correctly concluded that reopening of assessment proceedings against a dead person was not legally permissible for A.Y. 2013–14.
Despite this earlier acknowledgment, similar proceedings were once again initiated for A.Y. 2018–19 in August 2024. The Court observed that it is now well settled in law that a notice under Section 148 cannot be issued to a deceased person and that any such notice is void and without jurisdiction.
The Court referred to its earlier decision in Sumit Balkrishna Gupta vs. Assistant Commissioner of Income-tax, Circle 16(2), Mumbai [2019] 103 taxmann.com 188 (Bombay), which had laid down the governing principle. Paragraphs 6 and 7 of that judgment were quoted in full. In that decision, the Bombay High Court had held that a reopening notice issued in the name of a deceased person is null and void. The Court had relied on similar rulings by other High Courts, including the Gujarat High Court in Vikram Singh v. Union of India [2018] 401 ITR 302, the Delhi High Court in Rajender Kumar Sehgal v. ITO [2019] 101 taxmann.com 233, and the Madras High Court in Alamelu Veerappan v. ITO [2018] 95 taxmann.com 155.
The Court in Sumit Balkrishna Gupta had reasoned that issuance of notice under Section 148 is the foundation for reopening an assessment, and jurisdiction to reopen can only be acquired if the notice is issued to the correct person. Issuance of a notice to a dead person is not a mere procedural defect; it is a jurisdictional error that renders the entire proceeding void. Such a defect cannot be cured by invoking Sections 292B or 292BB of the Income Tax Act, which protect minor procedural mistakes. The provision of Section 148 specifically requires that a notice be served upon an assessee who is capable of responding — meaning a living person or a legal heir. The law does not allow the issuance of a notice to a deceased individual. Therefore, notices and orders issued in the name of a dead person are invalid and must be quashed.
This principle was subsequently affirmed in another Division Bench ruling of the Bombay High Court in Devendra vs. Additional/Joint Commissioner of Income-tax [2023] 153 com 520 (Bombay), which reiterated that notices under Section 148 issued to deceased persons are invalid in law.
Applying the settled legal position to the facts of the present case, the Court held that the notices and order impugned in the petition were invalid and could not be sustained. Accordingly, the Writ Petition was allowed in terms of prayer clause (a), which sought the quashing of the show cause notice dated 11 August 2024 under Section 148A(b), the impugned order dated 31 August 2024 under Section 148A(d), and the subsequent notice dated 31 August 2024 under Section 148, along with all consequential notices.
However, the Court clarified that the quashing of these proceedings would not prevent the Income Tax Department from issuing a fresh notice to the legal heirs of the deceased assessee, provided that the conditions prescribed under Sections 147 and 148 of the Income Tax Act are satisfied and that such action is taken within the permissible limitation period.
The Court made the Rule absolute in these terms, disposed of the petition, and did not make any order as to costs. It was further directed that the order would be digitally signed by the Court’s Private Secretary or Personal Assistant, and all parties would act on the production of a digitally signed copy by fax or email.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
