Case Law Details

Case Name : Urmilaben Anirudhhasinhji Jadeja Vs ITO (Gujarat High Court)
Appeal Number : R/Special Civil Application No. 15310 of 2018
Date of Judgement/Order : 27/08/2019
Related Assessment Year : 2011-12
Courts : All High Courts (5746) Gujarat High Court (566)

Urmilaben Anirudhhasinhji Jadeja Vs ITO (Gujarat High Court)

Conclusion: Notice under section 148 issued to a dead person could not be continued against the legal representatives and moreover, section 292B also could not be resorted to.

Held: Assessee had filed return of income for the assessment Year 2011-12 and the same was processed under section 143(1). Suddenly after a period of four years from the end of the relevant assessment year, AO issued the notice under section 148 on the email ID of the concerned Chartered Accountant (i.e. M/s. H.V.Vasa & Co.) for reopening the assessment for the year under consideration. In response thereto, the concerned CA vide email intimated AO that assessee (i.e. Anirudhhasinhji Mohobattsinhji Jadeja) had expired on 27.9.16 and hence, he pointed out his inability to represent a deceased person. Further he stated that such notice issued in the name of a deceased person was not accepted. AO asked to file the return of income in response to the impugned notice through the legal heir. CA of assessee had stated in the said notice that the return of income could be filed by the legal heir only after they had knowledge about the reasons for reopening since the legal heirs were unaware of the income of the deceased. AO issued another notice dated 25.6.18 under section 142(1) r.w.s. 129 of the Act in the name of the deceased assessee calling upon him to furnish certain further details and information, as specified therein. AO issued further notice dated 14.8.18 in the name of the ‘Urmilaben Aniruddhasinji Jadeja’ (i.e. legal heir of the deceased assessee) calling upon assessee to file return of income in response to notice issued under section 148. AO had supplied copy of reasons for reopening which recorded that the case of assessee had been reopened broadly on the count that certain payments made towards booking a plot had not been reflected in the return of income. AO had reason to believe that income of assessee had escaped assessment for the year under consideration. Assessee’s wife stated that the impugned notice under section 148 was bad, illegal, barred by limitation and without jurisdiction and therefore deserved to be quashed and set-aside in the larger interest of justice. It was held that the assessee’s wife could not be said to have participated in the proceedings in any manner. All that she did was, she informed AO that the notice was issued in the name of her husband who was already dead and gone. Such intimation to AO could not be termed as participating in the proceedings. The present case was not falling under clause (a) of sub-section (2) of section 159 and in such circumstances, the proceedings pursuant to the notice under section 148 issued to a dead person could not be continued against the legal representatives. Section 292B is specifically with regard to return of income, etc. which cannot be declared to be invalid on certain grounds. The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. A case in which notice was issued to a dead person could be termed as nullity. It was something like a safeguard passing a decree against a dead person which could not be executed through the legal representatives of the judgment-debtor.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. RULE returnable forthwith. Ms.Mauna Bhatt, the learned senior standing counsel appearing for the respondent waives service of notice of rule.

2. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs :

“…this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to :

(a) quash and set aside the impugned notice at Annexure-A to this petition;

(b) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the notice at Annexure-A to this petition and stay the further proceedings for the Assessment Year 2011-12;

(c) any other and further relief deemed just and proper be granted in the interest of justice;

(d) to provide for the cost of this petition.”

3. The case of the writ-applicant in her own words as pleaded in the writ-application is as follows :

2.2 The petitioner filed return of income for the Assessment Year 2011-12 on 30.07.11 declaring total income at Rs.4,56,090/- and the same was processed under section 143(1) of the Act on 21.09.11.

2.3 The petitioner, unfortunately, passed away on 27.9.16. Copy of Death Certificate of the petitioner is annexed herewith and marked as Annexure-C.

2.4 Thereafter, suddenly after a period of four years from the end of the relevant assessment year, the respondent issued the impugned notice dated 28.3.18 under section 148 of the Act on the email ID of the concerned Chartered Accountant (i.e. M/s. H.V.Vasa & Co.) for reopening the assessment for the year under consideration.

2.5 In response thereto, the concerned Chartered Accountant of the petitioner, vide email dated 31.3.18, intimated the respondent that the petitioner (i.e. Anirudhhasinhji Mohobattsinhji Jadeja) has expired on 27.9.16 and hence, he pointed out his inability to represent a deceased person. It was further stated in such email that such notice issued in the name of a deceased person was not accepted.

2.6 The respondent, while replying to the above submissions vide his email dated 9.4.18, asked the petitioner to file the return of income in response to the impugned notice through the legal heir.

2.7 The petitioner, vide letter dated 28.4.18 (filed on 1.5.18) again informed the respondent that since the petitioner has expired on 27.9.16, the impugned notice issued in the name of a deceased person is an invalid notice. It was further stated in the said notice that the return of income can be filed by the legal heir of the petitioner only after they have knowledge about the reasons for reopening since the legal heirs are unaware of the income of the deceased. It was, thus, submitted that if such details are known to the legal heir, the particulars of income could be found out and return of income could be filed.

2.8 The respondent, instead of providing reasons for reopening, issued another notice dated 25.6.18 under section 142(1) r.w.s. 129 of the Act in the name of the deceased assessee calling upon him to furnish certain further details and information, as specified therein.

2.9 The petitioner, vide letter dated 9.7.18, again reiterated the above submissions. Broadly, the reopening was objected on the ground that the impugned notice issued in the name of a deceased person is an invalid notice.

2.10 The respondent, vide order dated 6.8.18, disposed off the objections raised against reopening by the petitioner and, inter alia, held that reopening is valid. At this stage, it is clarified that the order disposing off objections has been passed in the name of ‘Urmilaben Anirudhhasinji Jadeja’ (i.e. legal heir of the deceased assessee) and that too without supplying copy of reasons recorded for reopening to the petitioner.

2.11 The respondent, thereafter, issued further notice dated 14.8.18 in the name of the ‘Urmilaben Aniruddhasinji Jadeja’ (i.e. legal heir of the deceased assessee) calling upon the assessee to file return of income in response to notice issued under section 148 of the Act.

2.12 The respondent, vide letter dated 6.9.18, supplied copy of reasons for reopening. A bare perusal of reasons recorded for reopening reveals that the case of the petitioner has been reopened broadly on the count that certain payments made towards booking a plot have not been reflected in the return of income. Briefly, it is the case of the respondent that certain information was received from the DCIT, Central Circle – 2(4), Ahmedabad vide letter dated 22.3.18 to the effect that the petitioner had paid money to the tune of Rs.28,00,000/- (Rs.20,00,000/- in cash and Rs.8,00,000/- through cheque) towards booking of Plot No.66 in a project namely Dipal Palm developed by J.P.Iscon Pvt. Ltd. and its group concerns. Such payments are not reflected in the return of income of the petitioner. Hence, the respondent has reason to believe that income of the petitioner to the tune of Rs.28,00,000/- has escaped assessment for the year under consideration.

2.13 The petitioner states that the impugned notice under section 148 of the Act is bad, illegal, barred by limitation and without jurisdiction and therefore deserves to be quashed and set-aside in the larger interest of justice. The petitioner therefore, has not other alternative but to approach this Hon’ble Court as and by way of the present petition.”

4. Thus, the writ-applicant seeks to challenge the legality and validity of the notice dated 28th March 2018 (Annexure-A to this writ-application) issued by the respondent under Section 148 of the Income Tax Act, 1961 (for short, ‘the Act’), seeking to reopen the writ-applicant’s income tax assessment for the Assessment Year 2011-12.

5. The principal argument of Mr.Tushar Hemani, the learned  senior counsel appearing for the writ-applicant, is that the impugned notice came to be issued in the name of a dead person. Mr.Hemani submitted that the notice came to be issued in the name of the husband of the writ-applicant, namely Anirudhhasinhji Mohabbatsinhji Jadeja. The husband of the writ-applicant passed away on 27th September 2016, i.e. prior to the issuance of the impugned notice. Mr.Hemani submitted that upon receipt of the notice by the writ-applicant, she immediately brought to the notice of the respondent by way of an e-mail that her husband had passed away. Mr.Hemani submitted that although as per clause (b) of sub-section (2) of Section 149 of the Act any proceeding which could have been taken up against the deceased, if he had survived, yet may be taken against the legal representatives. However, according to Mr.Hemani, the respondent initiated the re-assessment proceedings against the deceased person as against his legal representatives. In such circumstances, according to the learned senior counsel, the initiation of the re-assessment proceedings itself is not tenable in the eye of law.

6. On the other hand, this writ-application has been vehemently opposed by Ms.Mauna Bhatt, the learned senior standing counsel appearing for the Revenue. Ms.Bhatt submitted that it is not in dispute that the notice came to be issued in the name of a dead person. However, according to Ms.Bhatt, the notice was duly received by the writ-applicant, and upon receipt of such notice, the writ-applicant actually participated in the proceedings. In such circumstances, according to Ms.Bhatt, the writ-applicant having participated in the proceedings cannot turn around and take up the issue that the notice was issued to a dead person. According to Ms.Bhatt, the writ-applicant, being the widow of the assessee, would step into the shoes of the assessee and it is open for the Assessing Officer to proceed thereafter for the purpose of re-opening of the assessment in accordance with law.

7. Mr. Bhatt laid much emphasis on the fact that issue of a  notice to a dead person at best could be termed as a procedural defect or, to put it in other words, it could be termed as an irregularity, which is curable and it has been cured.

8. Mr. Bhatt, in support of her submissions, has placed reliance on few decisions of different High Courts. Ms.Bhatt first relied upon a decision of the Allahabad High Court in the case of Commissioner of Income Tax v. Trans Travels, reported in (250) CTR 89. The second decision relied upon by Ms.Bhatt is that of the Madhya Pradesh High Court in the case of Smt.Kaushalyabai v. Commissioner of Income-tax, reported in (1999) 238 ITR 1008 (Madhya Pradesh). The third decision relied upon is that of the Karnataka High Court in the case of Commissioner of Income Tax, Central Circle v. Sri Durga Enterprises, reported in 231 Taxmann 886.

9. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is, whether the re­opening of the assessment would be sustainable in law if the notice is issued in the name of a dead person.

10. As such, the question referred to above has been duly considered by this Court in the case of Chandreshbhai Jayantibhai Patel v. Income Tax Officer, reported in 261 Taxmann 137. Relying upon this decision, this very court has delivered a judgment in the case of Bipinbhai Bachubhai Kataria, L/R of Late Bachubhai Rambhai v. Income Tax Officer (Special Civil Application No.7850 of 2019 decided on 9th July 2019). We quote the relevant observations made therein as follows :

“5.00. The issue raised in this writ application is very limited and no longer res integra. It appears that the writ applicant is the son of late Late Bachubhai Rambhai Kataria. Late Bachubhai Rambhai Kataria was assessed in the office of the Income Tax Officer, Rajkot. It is the case of the Revenue that late Bachubhai Rambhai Kataria sold land bearing Revenue Survey No.65/1 situated at village Lamdhar, Taluka Una, District Junagadh admeasuring about 36,725 sq.mtrs. For Rs.23,87,127 by executing a registered sale deed on dated 2/3/2012, however, the late Bachubhai Rambhai Kataria had not filed his return of income under Section 139 for the Assessment Year 2012-13 and had not declared his total income. In such circumstances, the department issued a notice dated 05/02/2014 with respect to sale of the aforesaid land in the name of late Bachubhai Rambhai Kataria. The petitioner replied to the said notice vide reply dated 11/02/2014 stating that his father named late Bachubhai Rambhai Kataria passed away on 07/10/2013. Along with the reply, the petitioner also submitted relevant documents with respect to sale of the said land. Thereafter, the respondent issued notice on 26/03/2019 under Section 148 of the Income Tax Act, 1961. Late Bachubhai Rambhai Kataria passed away on 7/10/2013, however, thereafter the notice under section 143 came to be issued by the respondent Kataria on 26/3/2019. The fact of death of late Bachubhai Rambhai before issuance of the notice under section 148 was brought to the notice of the respondent department with the death certificate of late Bachubhai Rambhai Kataria. In such circumstances, Ms. Mauna Bhatt, the learned senior standing counsel for the Revenue with her usual fairness submitted that there is no escape from the fact that the department issued notice to a dead person. However, Ms.Bhatt submitted by placing reliance on Section 292B of the Act that the impugned notice would not become a nullity or invalid merely by reason of some mistake/defect. In such circumstances, according to Ms. Bhatt, if a notice under Section 148 of the Act is issued to a dead person instead of upon his/her legal representatives, the same shall be valid in view of the provisions of Section 292B of the act. Ms. Bhatt further placed reliance on Section 159(2)(b) and Section 159(3) of the Act. She submitted that in view of Section 159(2) (b) and Section 159(3) of the Act, the legal representative of the deceased shall for all practical purposes be deemed to be an assessee.

6.00. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the notice issued by the department under Section 148 of the Act to a dead person could be termed a valid notice.

7.00. Both the submissions of Ms. Raval, the learned senior standing counsel appearing for the Revenue are covered by the decision of this Court in the case of Chandreshbhai Jayantibhai Patel vs. Income-tax Officer [(2019) 101 taxmann.com 362 (Gujarat)]. We may quote the relevant observations :

“6.1. Reference was made to the decision of the Supreme Court in the case of Girijanandini Devi v. Bijendra Narain Choudhary, AIR 1967 SC 1124, for the proposition that death of the person liable to render an account for property received by him does not affect the liability of his estate. It was submitted that therefore, even after his death, deceased Jayantibhai does not cease to be an assessee and consequently, the legal representative is responsible for filing the return of income and answering to the notice. It was submitted that the Madras High Court in the case of Alamelu Veerappan v. Income Tax Officer, Non-corporate Ward- 2(2), Chennai (supra), on which reliance has been placed on behalf of the petitioner, does not refer to section 292B of the Act and, therefore, the said decision would be not applicable to the facts of the present case. It was submitted that in this case, the petitioner had knowledge of the proceedings and has responded to the same as legal representative of the deceased and, therefore, the procedural defect which is otherwise curable may be permitted to be cured.

6.2. Reference was made to section 2(29) of the Act, which says that “legal representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908.

6.3. The learned counsel further invited the attention of the court to the provisions of section 292B of the Act, which inter alia provide that no notice, summons or other proceeding, issued or taken 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, summons or other proceeding if such notice, summons or other proceeding is, in substance and effect, in conformity with or according to the intent and purpose of the Act. It was submitted that in the light of the provisions of section 292B of the Act, the defect in the notice by issuing the same to a dead person would not render the notice invalid, inasmuch as it is a purely procedural lapse.

6.4. Reliance was placed upon the decision of the Delhi High Court in the case of Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, (2018) 405 ITR 296 (Delhi), wherein the court has held thus:

“17. In the context of the present writ petition, the aforesaid ratio is a complete answer to the contention raised on validity of the notice under section 147/148 of the Act as it was addressed to the erstwhile company and not to the limited liability partnership. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated April 11, 2017. They had objected to the notice being issued in the name of the company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s. Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused.”

6.5. It was pointed out that the above decision of the Delhi High Court came to be challenged before the Supreme Court in Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, [2018] 92 Taxman.com 93 (SC), which dismissed the special leave petition holding that the wrong name given in the notice was merely a clerical error which could be corrected under section 292B of the Act.

6.6. Reliance was also placed upon the decision of the Supreme Court in the case of Commissioner of Income Tax, Shillong v. Jai Prakash Singh, [1996] 219 ITR 737, wherein the assessee did not file returns for three assessment years and died in April 1967, leaving behind him, in all, ten legal heirs. The eldest son Jai Prakash Singh filed the returns for the three assessment years. Such returns were signed by him alone and not by the other legal representatives. Scrutiny assessment came to be carried out by the Income Tax Officer, during the course of which, notices under section 142(1) of the Act came to be issued to Jai Prakash to appear and produce documents, accounts and other material, who complied with the same and did not raise any objection that notices must be issued to the other legal representatives of the deceased. Assessment orders were made in the name of all the ten legal representatives who were described as legal representatives of the deceased. Appeals were filed by Jai Prakash contending that the assessments were illegal and invalid as no notice had been issued to all the legal representatives of deceased. The court placed reliance upon a decision of the Bombay High Court in Maharaja of Patiala v. Commissioner of Income Tax (Central), Bombay, (1943) 11 ITR 201, for the proposition that an assessment made without strictly complying with section 24-B (section 159 in the present Act) is not void or illegal and that any infractions in that behalf can be waived by the assessee. The court also placed reliance upon its earlier decision in Estate of Late Rangalal Jajodia v. Commissioner of Income Tax, Madras, (1971) 79 ITR 505 (SC), for the proposition that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions (charging sections). Any such omission or defect may render the order made irregular – depending upon the nature of the provision not complied with, but certainly not void or illegal. Following the said decisions, the court held that in the facts and circumstances of the case, the orders of assessment made by the Income Tax Officer without notice to all the legal representatives are not null and void in law, but are merely irregular/defective proceedings which can be set right by remitting the matters to the Income Tax Officer for making fresh assessments with notice to all legal representatives.

6.7. Reliance was placed upon the decision of this court in the case of Commissioner of Income Tax v. Sumantbhai C. Munshaw, (1981) 128 ITR 142, wherein though the notice was issued to the deceased person, the proceeding was continued against the legal representative who participated in the proceeding and also filed return of income without raising any objection as to the validity of the assessment proceedings. The legal representative had, therefore, submitted to the jurisdiction of the Assessing Officer. The court held that if the legal representative is present before the taxing authority in some capacity or voluntarily appears in the proceeding without service of notice or upon service of notice not addressed to him but to the deceased assessee and does not object to the continuance of the proceeding against the dead person and is heard by the Income Tax Officer in regard to the tax liability of the deceased and invites an assessment on merits, such a legal representative must be taken to have exercised the option of abandoning the technical plea that the proceeding has not been continued against him, although in substance and reality, it has been so continued.

6.8. The learned counsel submitted that issuance of notice in the name of the deceased being a procedural defect, can be cured under section 292B of the Act and that on account of such technical defect, the notice is not void. Moreover, the petitioner having responded to the notice under section 148 of the Act, the Assessing Officer is justified in continuing the proceedings against him. It was, accordingly, urged that the petition being devoid of merits, deserve to be dismissed.

7. In the backdrop of the rival submissions, the facts as emerging from the record of the case may be adverted to. The impugned notice dated 28.03.2018 is issued to Shri Jayantilal Harilal Patel, father of the petitioner, seeking to reopen the assessment for assessment year 2011-12 under section 148 of the Income Tax Act, 1961. By a letter dated 27.04.2018 addressed to the Income Tax Officer, the petitioner informed him that his father Shri Jayantilal Harilal Patel has passed away on 24.06.2015, enclosing therewith a death certificate and further being his son and in his capacity as legal heir, requested him to drop the proceedings. Thereafter, another notice dated 10.07.2018 came to be issued under sub-section (1) of section 142 of the Act to Shri Jayantilal Harilal Patel calling upon him to furnish the details mentioned therein. In the annexure to the said notice, the assessee was called upon to show cause as to why penalty proceedings under section 217F of the Act should not be initiated in his case as he had not furnished return of income in response to the notice under section 148 and stating that this may be treated as a notice under section 142(1) read with section 129 of the Income Tax Act, 1961.

8. The petitioner addressed a letter dated 02.08.2018 to the Income Tax Officer objecting to the notices issued under section 148 as well as under section 142(1) of the Act and drew his attention to the earlier letter dated 27.04.2018 informing him about the death of his father and requesting him to drop the proceedings. The attention of the Income Tax Officer was further invited to the provisions of section 159 of the Act, to submit that the proceedings are required to be initiated against a legal representative and not against the deceased and, therefore, the notices issued to the dead person are invalid. Reliance was placed upon the decision of this court in Jaydeep Kumar Dhirajlal Thakkar v. Income Tax Officer, (2018) 401 ITR 302 (Guj.) and Vipin Walia v. Income Tax Officer, (2016) 381 ITR 19 (Delhi).

9. Thereafter, by a notice dated 03.08.2018 issued under section 142(1) of the Act, the respondent called upon the petitioner as legal heir of deceased Shri Jayantilal Harilal Patel to furnish the documents mentioned therein. In the annexure thereto, the petitioner is called upon to show cause as to why penalty proceedings under section 217F of the Act should not be initiated in his case as he had not furnished return of income in response to the notice under section 148 of the Act and stating that this may be treated as notice under section 142(1) read with section 129 of the Income Tax Act, 1961.

10. By an order dated 14.08.2018, the respondent disposed of the objections raised by the petitioner stating that the notice under section 148 of the Act was issued in the name of the deceased as the department was not aware of the death of the assessee. It is only when the legal heir Shri Chandreshbhai Jayantilal Patel (the petitioner herein) filed a letter dated 27.04.2018 along with a copy of the assessee’s death certificate, that this fact came to the notice of that office. It is stated that since the assessee’s son – legal heir had received the notice (stated to have been received through the neighbour) and participated in the proceedings; the defect in issue of the notice is automatically cured. Reliance was placed upon the decision of the Madhya Pradesh High Court in the case of Kausalyabai v. Commissioner of Income Tax, 238 ITR 1008 (MP), wherein after the death of the assessee, the notice was issued in the name of a person who was dead. The court observed that the widow of such person participated in the assessment proceedings and hence, the defect in the notice stood automatically cured. It is further stated in the order disposing of the objections that even if the notice dated 28.03.2018 is issued defectively in the name of the deceased assessee, then also, as per the provisions of section 292B of the Act, the same cannot be held to be invalid.

11. Insofar as the contention raised by the petitioner based on section 159 of the Act is concerned, the Assessing Officer observed that in this case, the assessee (the petitioner) had introduced himself as a son of the deceased assessee and as legal heir and has produced death certificate in response to the notice issued under section 148 of the Act. Therefore, as the legal heir, upon being served with the notice under section 148, has participated in the proceedings, the reassessment proceedings initiated are legal and valid. Reliance has been placed upon the decision of the Madras High Court in the case of V. Ramanathan v. Commissioner of Income Tax, (1963)49 ITR 881 (Madras). It is further stated therein that it is not in dispute that Shri Chandreshbhai J. Patel is the legal heir of the deceased assessee; therefore, the proceedings initiated against the legal representative/legal heir are valid and legal.

12. In the backdrop of the aforesaid facts, it is an admitted position that the notice under section 148 of the Act was issued to a dead person. The petitioner being the heir and legal representative of the deceased, upon receipt of the notice, immediately raised objection against the validity of the impugned notice and did not submit to the jurisdiction of the Assessing Officer by filing a return of income, but kept on objecting to the continuation of the assessment proceedings pursuant to the impugned notice. The Assessing Officer, however, instead of taking corrective steps under section 292B of the Act and issuing notice to the heirs and legal representatives, insisted on continuing with the proceedings pursuant to the impugned notice which was issued in the name of a dead person. Since strong reliance has been placed by the learned counsel for the respondent on the provisions of section 2(7) and 2(29) read with sections 159 and 292B of the Act, reference may be made to the said provisions, which read as under:

“Section 2(7) “assessee” means a person by whom any tax or any other sum of money is payable under this Act, and includes –

(a) every person in respect of whom any proceeding under the Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person;

(b) every person who is deemed to be an assessee under any provision of this Act;

(c) every person who is deemed to be an assessee in default under any provision of this Act;”

“Section 2(29) “legal representative” has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908;”

“159. Legal representatives. – (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.

(2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1):-

(a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased;

(b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and

(c) all the provisions of this Act shall apply accordingly.

(3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.

(4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undercharged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of, or parted with.

(5) The provisions of sub-section (2) of section 161, section 162 and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative.

(6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.”

“292B. Return of income, etc., not to be invalid on certain grounds. – No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”

13. Thus, the expression “assessee” includes every person who is deemed to be an assessee under any provision of the Act. Sub- section (3) of section 159 of the Act, postulates that the legal representative of the deceased shall, for the purposes of the Act, be deemed to be an assessee. Sub-section (2) of section 159 of the Act says that for the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1), –

(a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased;

(b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and

(c) all the provisions of the Act shall apply accordingly.

14. Thus, clause (a) of sub-section (2) of section 159 of the Act provides for the eventuality where a proceeding has already been initiated against the deceased before his death, in which case such proceeding shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased. In the present case, the proceeding under section 147 of the Act had not been initiated against the deceased before his death, and hence, clause (a) would not be applicable in the facts of this case.

15. Clause (b) of sub-section (2) of section 159 of the Act provides that any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative. The present case would, therefore, fall within the ambit of section 159(2)(b) of the Act and, hence, the proceeding can be taken against the legal representative. Now, it cannot be gainsaid that a proceeding under section 147 of the Act of reopening the assessment is initiated by issuance of notice under section 148 of the Act, and as a necessary corollary, therefore, for taking a proceeding under that section against the legal representative, necessary notice under section 148 of the Act would be required to be issued to him. In the present case, the impugned notice under section 148 of the Act has been issued against the deceased assessee. In the opinion of this court, since this is not a case falling under clause (a) of sub-section (2) of section 159 of the Act, the proceeding pursuant to the notice under section 148 of the Act issued to the dead person, cannot be continued against the legal representative.

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, Ward-1(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.”

11. Section 159 of the Act, on which strong reliance has been  placed on behalf of the Revenue, has been exhaustively considered by this Court in the case of Chandreshbhai (supra). In Chandreshbhai (supra), this Court drew a fine distinction between clause (a) of sub-section (2) of Section 159 and clause (b) of sub-section (2) of Section 159 of the Act. Clause (b) of sub­section (2) of Section 159 of the Act permits initiation of any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representatives. However, in the case on hand, the impugned notice under Section 148 of the Act has been issued against the deceased assessee. The case on hand is not falling under clause (a) of sub­section (2) of Section 159 of the Act, and in such circumstances, the proceedings pursuant to the notice under Section 148 of the Act issued to a dead person cannot be continued against the legal representatives. Such is the dictum as laid in the case of Chandreshbhai (supra) and followed later in the case of Bipinbhai Bachubhai (supra). In fact, the vociferous argument of Ms.Bhatt on behalf of the Revenue that at best it could be termed as an irregularity and that too a curable irregularity is also taken care of by this Court in Chandreshbhai (supra) in paragraphs 17 and 18 by referring to and discussing Section 292(B) of the Act.

12. The Delhi High Court, in the case of Vipin Walia v. Income Tax Officer, reported in (2016) 382 ITR 19, had the occasion to consider an identical issue. While interpreting Section 159(2) of the Act, the Court observed as under :

“11. Section 159(2) of the Act makes a specific reference to a reassessment proceeding under Section 147 of the Act.

While Section 159(2)(a) of the Act talks of a proceeding already taken against an Assessee ‘before his death’. Section 159(2)(b) of the Act envisages any proceeding which could have been taken against the deceased if he had survived. It permits such a proceeding to be taken against the LRs of the deceased Assessee even if it had not taken while the Assessee was alive. Section 159(2)(b) is relevant as far as the present case is concerned.

12. What was sought to be done by the ITO was to initiate proceedings under Section 147 of the Act against the deceased Assessee for AY 2008-09. The limitation for issuance of the notice under Section 147/148 of the Act was 31st March 2015. On 27th March 2015, when the notice was issued, the Assessee was already dead. If the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31st March 2015 by issuing a notice to the LRs of the deceased. Beyond that date it could not have proceeded in the matter even by issuing notice to the LRs of the Assessee.

13. Learned counsel for the Revenue sought to place reliance on the decision of the Supreme Court in CIT v. Jai Prakash Singh [1996] 219 ITR 737/85 Taxman 407 in support of his contention that the ITO was justified in initiating proceeding under Section 147 of the Act even against the Petitioner who admittedly was the LR of the deceased Assessee in this case.

14. A perusal of the said judgment reveals that it is clearly distinguishable on facts. Para 2 of the said decision shows that the son of the deceased Assessee there had filed returns for the three Assessment Years (‘AYs’) for which the deceased Assessee had failed to file the returns. In other words, the proceedings at the instance of the LR of the deceased Assessee were already in progress when the question arose about the notice being issued only to the LR who filed the returns or to all the LRs. The question was whether the failure to issue notice to all the LRs would render the proceedings invalid. It is in those circumstances it was held that the non-issuance of notice to all the LRs would be only an irregularity and not an illegality.

15. The Court fails to understand how the above decision in Jai Prakash Singh (supra) is of any help to the Revenue in the present case where the initial notice under Section 147/148 of the Act was issued to a dead person. The Revenue was unable to issue a notice to the LR of the deceased Assessee under Section 147/148 of the Act within the period of limitation. That would be a plain illegality and not a mere irregularity.

16. Learned counsel for the Revenue then relied on the decision of the Calcutta High Court in Kamalesh Kumar Mehta v. CIT [1977] 106 ITR 855 (Cal.). The facts of that case show that the initial notice under Section 148 of the Act was served to the Assessee who was still alive. He died after the service of such notice under Section 148 of the Act.

This makes the decision distinguishable on facts.

17. On the other hand, we have a decision of this Court in Braham Parkash v. ITO [2005] 275 ITR 242 which in similar circumstances has held that “notice could have been served upon a deceased Assessee”. Even in that case there was nothing on record to show that notice under Section 148 of the Act was served on the LR of the deceased within the time prescribed.”

13. The aforesaid decision of the Delhi High Court came to be considered by this Court in the case of Rasid Lala v. Income Tax Officer, Ward-1(3)(6) (Special Civil Application No.18987 of 2016, decided on 29th November 2016). We may quote the relevant observations thus :

“6. It is an admitted position that the assessee died on 2nd December 2009. It is also an admitted fact that the notice under Section 148 of the Income-tax Act, 1961 to re-open the assessment for Assessment Year 2009-2010 has been issued against the dead person i.e., the deceased assessee. Thus, the re-assessment proceedings have been initiated after the death of the assessee. Though it was pointed out by the heir of the deceased assessee that the assessee has expired long back, and therefore, the notice issued in her name and/or against a dead person is not valid, instead of taking corrective measures as provided under Section 292 [b] of the Income-tax Act, 1961 and to issue fresh notice against the legal heirs of the deceased, the Assessing Officer has continued with the re-assessment proceedings against the dead person. Section 159 of the Income-tax Act which has been relied upon by the learned counsel for the Revenue shall not be applicable to the facts of the case on hand.

7. In the present case, admittedly, the reassessment proceedings have been initiated against the dead person and that too after a long delay, therefore, even if Section 159 of the Act is attracted, in that case also, the notice was required to be issued against and in the name of the heirs of deceased assessee. Under the circumstances, in the facts and circumstances of the case, Section 159 of the Act shall not be of any assistance to the Revenue.”

14. The Madhya Pradesh High Court, in the case of Shaikh Abdul Kadar v. Income Tax Officer, reported in (1958) 34 ITR 451, had the occasion to consider the very same issue. While discussing Section 34 of the old Act, Justice M.Hidayatullah (as His Lordship then was), speaking for the Bench, observed as under :

“In these circumstances, it was incumbent on the Income-tax Officer to cause the notice to be issued to the legal representatives of Shakir Hussain. See Alfred y. First Additional Income-tax Officer, Salem [1957] 32 ITR 401. With the knowledge that the original assessee was dead, and that he was succeeded by his sons and daughter, there was no point in sending a notice as well as all the communications in the name of the dead person.

The notice under section 34 is the foundation of jurisdiction, and that notice has to be correct. When a notice is issued to a dead person, the taxing authority cannot catch any living person into whose hands the notice goes and attribute notice to him. In the present case all notices and communications are addressed to Shakir Hussain, which shows that they are all sent to a dead person. It may be that the legal representatives of Shakir Hussain continue to utilize the name of their father for their own business, but the distinction is quite apparent that they are an “association of persons”; and it is not the case of the Department that the notice, which was addressed to Shri Shakir Hussain, was sent to this “association of persons”. The wording of the notice as well as the letters which have been written by the Department on subsequent, occasions clearly show that, in so far as the Department was concerned, it was dealing with Shakir Hussain who, they knew, was dead. In our opinion, the notice was defective. As such a notice is a condition precedent for action under section 34 of the Income-tax Act, the assessment cannot be made. The Income-tax Officer is prohibited from making an assessment on the strength of the notice which he has issued. An appropriate writ shall issue.”

15. A Division Bench of the Rajasthan High Court, in the case of Smt.Kesar Devi v. Commissioner of Income Tax (No.2), reported in (2010) 321 ITR 344 (Raj), in context with the notice issued under Section 148 of the Act to a dead person, had observed as under :

“So far as the question framed that notice to the dead person has been issued, is concerned, notices have no doubt been issued to the dead person. It is settled principle of law that the case cannot be decided in the absence of the affected party. Therefore, notice to the dead person was illegal.”

16. The Madras High Court, in the case of Alamelu Veerappan The Income Tax Officer, Non Corporate Ward 2(2), Chennai (Writ Petition No.30060 of 2017, decided on 7th June 2018), has observed as under :

“14. The issue, which falls for consideration, is as to whether the impugned notice under Section 148 of the Act issued in the name of the dead person – the said Mr.S.Veerappan is enforceable in law and the subsidiary issue being as to whether the petitioner, being the wife of the said Mr.S.Veerappan, can be compelled to participate in the proceedings and respond to the impugned notice. The fact that the said Mr.S.Veerappan died on 26.1.2010 is not in dispute. If this fact is not disputed, then the notice issued in the name of the dead person is unenforceable in the eye of law.

15. The Department seeks to justify their stand by contending that they were not intimated about the death of the assessee, that the legal heirs did not take any steps to cancel the PAN registration in the name of the assessee and that therefore, the Department was justified in directing the petitioner to co-operate in the proceedings pursuant to the impugned notice.

16. The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the Revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. In my considered view, the answer to the question should be definitely against the Revenue.

17. This Court supports such a conclusion with the following reasons : Admittedly, the limitation period for issuance of notice for reopening expired on 31.3.2017. The impugned notice was issued on 30.3.2017 in the name of the dead person. On being intimated about the death, the Department sent the notice to the petitioner – his spouse to participate in the proceedings. This notice was well beyond the period of limitation, as it has been issued after 31.3.2017. If we approach the problem sans complicated facts, a notice issued beyond the period of limitation i.e. 31.3.2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. 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 or take steps to cancel the PAN registration.

18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application.

19. The Revenue seeks to bring their case under Section 292 of the Act to state that the defect is a curable defect and on that ground, the impugned notice cannot be declared as invalid.

20. The language employed in Section 292 of the Act is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act.

21. All the above reasons are fully supported by the decision in the case of Vipin Walia. (supra). In that case, the notice dated 27.3.2015 was issued under Section 148 of the Act to the assessee, who died on 14.3.2015. The validity of the said notice was put to challenge. The Income Tax Officer took a stand that since the intimation of death of the assessee on 14.3.2015 was not received by her, the notice took a stand that since the intimation of death of the assessee on 14.3.2015 was not received by her, the notice was issued on a dead person. However, the fact regarding the death of the assessee could not be disputed by the Department. The Department continued the proceedings under Section 147/148 of the Act and at that stage, the son of the deceased approached the High Court of Delhi. The High Court of Delhi pointed out that what was sought to be done by the Income Tax Officer was to initiate proceedings under Section 147 of the Act against the deceased assessee for the assessment year 2008-09, for which, the limitation for issuance of notice under Section 147/148 of the Act was 31.3.2015 and on 02.7.2015 when the notice was issued, the assessee was already dead and if the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31.3.2015 by issuing the notice to the legal heirs of the deceased and beyond that date, it could not have proceeded in the matter even by issuing notice to the legal representatives of the assessee. The decision in Vipin Walia (supra) fully supports the case of the petitioner herein.

22. The decision in the case of Vipin Walia (supra) was followed in the decision of the High Court of Gujarat in the case of Rasid Lala, (supra) in which, the reassessment proceedings were initiated against the dead person, that too, after a long delay. The Court pointed out that even if the provisions of Section 159 of the Act are attracted, in that case also, the notice was required to be issued against and in the name of the heirs of the deceased assessee and under the said circumstances, Section 159 of the Act shall not be of any assistance to the Revenue.

23. In the decision of the Delhi High Court in the case of Spice Entertainment Ltd. (supra) one of the questions, which fell for consideration, is as to whether such framing of assessment against a non-existing entity or a dead person could be brought within the ambit of Section 292B of the Act and after referring to the decisions on the point including the decision of the Allahabad High Court in the case of Sri Nath Suresh Chand Ram Naresh v. CIT [2006] 280 ITR 396/145 Taxman 186 it has been held that the provisions of Section 292B of the Act are not applicable and that framing of assessment against a non-existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect, as there cannot be any assessment against a dead person.

24. The learned Senior Standing Counsel for the Revenue has sought to distinguish the decision in the case of Spice Entertainment Ltd. (supra) by referring to Sky Light Hospitality LLP. Case (supra)

25. On a perusal of the factual position therein, the Court came to the conclusion that the defect was curable because it was held that the notice was not addressed to the correct name and that the PAN mentioned was also incorrect. The factual background was taken into consideration and the Court held that errors and mistakes cannot and should not nullify the proceedings, which are otherwise valid and that no prejudice had been caused, as this being the mandate of Section 292B of the Act. The decision in the case of Sky Light Hospitality LLP case (supra) is clearly distinguishable on facts and it does not support the case of the Revenue.”

17. The Supreme Court, in the case of Commissioner of Income-tax, Bombay City I, Bombay v. Amarchand N.Shroff by his heirs and legal Representatives, reported in AIR 1963 SC 1448, has discussed about the legal personality of a deceased assessee in context with Section 24B of the Income Tax Act, 1922. We may quote the relevant observations thus :

“4. It was argued by counsel for the Commissioner of Income-tax that on a correct interpretation of S.24B the amounts which were received by the heirs and legal representatives of Amarchand after his death should be deemed by the fiction incorporated in sub-section (1) to be income received by Amarchand and liable to tax under S.24B(1) of the Income-tax Act. In other words the respondents as heirs and legal representatives of the deceased Amarchand were liable to pay out of the estate of the deceased Amarchand on these amounts to the extent of the estate as the estate was liable for tax on the amounts received by the heirs and legal representatives just as the deceased Amarchand would have been had he not died. The emphasis was on words in S.24B(1) ‘or any tax which would have been payable by him under this Act if he had not died’. Section 24B is as follows :

“Section 24B “Tax of deceased person payable by representative:

(1) Where a person dies, his executor administrator or other representative shall be liable to pay out of the estate of the deceased person the extent to which the estate is capable of meeting the charge the tax assessed as payable by such person or any tax which would have been payable by him under this Act if he had not died.

(2) Where a person dies before the publication of the notice referred to in sub-section (1) of section 22 or before he is served with a notice under sub-section (2) of section 22 or section 34, as the case may be, his executor, administrator or other legal representative shall, on the serving of the notice under sub-section (2) of S.22 or under S.34, as the case may be, comply therewith and the Income-tax Officer may proceed to assess the total income of the deceased person as if such executor, administrator or other legal representative were the assessee.

(3) Where a persons dies, without having furnished a return which he has been required to furnish under the provision of S.22, or having furnished a return which the Income-Tax Officer has reason to believe to be incorrect or incomplete, the Income-tax Officer may make an assessment of the total income of such person and determine the tax payable by him on the basis of such assessment, and for this purpose may by the issue of the appropriate notice which would have had to be served upon the deceased person had he survived require any accounts, documents or other evidence which he might under the provisions of Ss.22 and 23 have required from the deceased person.”

Sub-section (1) provides that where a person dies his heirs and legal representatives are liable to pay out of the estate of the deceased the tax assessed as payable by the deceased or any tax which would have been payable under the Act by the deceased if he had not died. According to the submission of counsel for the Commissioner of Income-tax the words of sub-section (1) “or any tax which would have been payable by him under this Act if he had not died” mean that irrespective of the date of receipt of income receivable by a person, if the income is received by his heirs and legal representatives after his death, they are liable for payment of the tax just as the deceased would have been liable when the income was received had he been living. But this interpretation is not in accord with the language used in S.24B All the sub-sections have to be read together Sub­section (1) can be divided into too parts (1) where the income of the deceased was assessed before his death and (2) where the income was not so assessed but it would have been liable to tax had he not died. The second part or the words above quoted when read with sub-sections (2) and (3) show that they are confined to cases there mentioned. They show that those words also have to be restricted to the income received by the deceased person before his death and to the income received after his death by his heirs and legal representatives but in the “previous” year and which had not been assessed but would have been assessed as income received by him if death had not taken place. See Allen v. Trehearne, (1938) 22 Tax Cas 15 where the words “if he had nor died” were interpreted. Sub-section (2) provides that if a person dies before the publication of the public notice under Section 22(1) or before a notice is served on him under Sub-section (2) of S.22 or S.34 then the Income-tax Officer may proceed to compute or assess the total income of the deceased person as if the heirs and legal representatives were the assessees. Sub-section (3) provides that when a person dies before a return is furnished by him under the provisions of S.22 or dies after having furnished the return which the Income-tax Officer finds incorrect or incomplete then the Income-tax Officer can make assessment on the total income of the deceased person and certain other consequence follow but in all the cases enumerated above the language used in subsections (1), (2) and (3) of S.24B contemplates that the heirs and legal representatives of a deceased person are liable to pay income-tax out of his estate (1) where assessment had already been made and (2) where he dies before the assessment but the income was received before his death or by his heirs and legal representatives after his death which occurs during the previous year. If he dies before the publication of the notice under S.22(1) or before the service under S.22(2) or after the service but before he has furnished a return or filed an incorrect or incomplete return then the Income-tax Officer should make an assessment of the total income of such deceased person and determine the tax payable thereupon. Section 24B does not authorise levy of tax on receipts by the legal representatives of a deceased person in the years of assessment succeeding the year of account being the previous year in which such person died.

5. Income-tax is eligible in reference to a persons total income of the previous year. The question before us is whether the income which was received subsequent to the previous year in which Amarchand died is liable to be assessed to income-tax under S.24B as his income in the hands of his heirs and legal representatives. In the present case the accounts were kept on cash basis. The assessee under the Act has ordinarily to be a living person and cannot be a dead person because his legal personality ceases on his death. By S.24B the legal personality of a deceased assessed is extended for the duration of the entire previous year in the course of which he died and therefore the income received by him before his death and that received by his heirs and legal representatives after his death but in that previous year becomes assessable to income-tax in the relevant assessment year. The section was enacted by the Legislature to bring to tax after his death, income received during his lifetime and fill up the lacuna which was pointed out by the High Court in Commissioner of Income-tax Bombay v. Ellis C. Reid, 5 ITC 100: (AIR 1931 Bom 333). Any income received in the year subsequent to the previous or the account year cannot be called income received by the person deceased. The provisions of S.24B do not extend to tax liability of the estate of a deceased person beyond the previous or the account wear in which that person dies. In support of his contention counsel for the Commissioner of Income-tax relied upon the scheme of the Act as given in Additional Income-tax Officer v. E. Alfred’ 1962-44 ITR 442 at p.445: (AIR 1962 SC 663 at p.665). There is nothing said in that case which supports the contention raised by the Commissioner of Income-tax. Reliance was next placed on certain observations in a judgment of the Bombay High Court In re B.M.Kamdarr (1946) 14 ITR 10: (AIR 1945 Bom 442) (FB). Those observations also are of no assistance to the Commissioner of Income-tax Kania J., (as he then was) there observed that the question whether a particular amount was income or not had nothing to do with the time of its receipt and the question of receipt was material only for the purpose of determining whether on that amount tax was to be levied under the Act in the year of assessment. That was a case where a consulting engineer discontinued his practice as such from February 15, 1938 and he received a sum of money representing the outstanding professional fees earned by him prior to the discontinuance of his practice but realised by him during the calendar year which was the previous year. The assessee was keeping his accounts on cash basis and he contended that as he had discontinued his profession in the previous year the source had come to an end and the amounts received by him were not liable to Income-tax. It was held that the income was assessable. The assessed in that case was still alive when the income was received by him and S.24B had no application to the facts of the case.

6. Counsel also relied on the observations of Derbyshire C.J., in In re Smt. Usharani Roy Choudhurani, 1942-10 ITR 199 (Cal). In that case the Managing Agent of a limited company died on May 12,1938. At the time of his death there was a credit with the company of sum of money on account of commission earned by him and due to him prior to the date of his death. This sum was paid after his death in the previous year 1938-39 and was sought to be taxed under S.24B of the Income-tax Act. It was held that this income was taxable. Derbyshire C. J., said at p.2055 that the assessee who was the widow had received the salary due to her husband; that the Income-tax Officer was entitled to assess the total income of the deceased person as if the legal representatives were the assessees and the amount was liable to tax under S.24B(1) but in that case also the amount was received by the widow in the previous year and it was earned by the deceased during the previous year.

7. The correct position is that apart from S.24B no assessment can be made in respect of the income of a person after his death. See 5 ITC 100 : (AIR 1931 Bom 333). In that case, and that was a case before S. 24B was enacted, a person was served with a notice under Section 22(2) of the Income-tax Act but no return was made within the period specified and he dies. It was held that no assessment could be made under S.23(4) of the act after his death. At page 106 (of ITC) : (at p.335 of AIR) it was observed :

“It is to be noticed that there is throughout the Act no reference to the decease of a person on whom the tax has been originally charged, and it is very difficult to suppose the omission to have been unintentional. It must have been present to the mind of the legislature that whatever privilege the payment of income-tax may confer, the privileges of immortality is not amongst them. Every person liable to pay tax must necessarily die and, in practically every case, before the last installment has been collected, and the legislature has not chosen to make any provisions expressly dealing with assessment of, or recovering payment from the estate of a deceased person.”

The individual assessee has ordinarily to be a living person and there can be no assessment on a dead person and the assessment is a charge in respect of the income of the previous year and not a charge in respect of the income of the year of assessment as measured by the income of the previous year. Wallace Brothers and Co. Ltd. v. Commissioner of Income-tax Bombay, 1948-16 ITR 240 at p. 244: (AIR 1948 PC 118 at p. 120). By S.24B the legal representatives have, by fiction of law, become assessees as provided in that section but that fiction cannot be extended beyond the object for which it was enacted. As was observed by this Court in Bengal Immunity Co. Ltd. v.

The State of Bihar, 1955-2 SCR 603 at p.646 : (S) AIR 1955 SC 661 at p.680) legal fictions are only for a definite purpose and they are limited to the purpose for which they are created and should not he extended beyond that legitimate field. In the present case the fiction is limited to the cases provided in the three sub-sections of Section 24B and cannot be extended further than the liability for the income received in the previous year.”

18. We are not impressed by the submissions canvassed on behalf of the Revenue that the writ-applicant having participated in the proceedings cannot turn around and submit that the proceedings cannot continue as the notice was issued to a dead person. This argument of the learned counsel needs to be considered in light of the materials on record. We take notice of the fact that in fact the writ-applicant cannot be said to have participated in the proceedings in any manner. All that the writ-applicant did was, she informed the Assessing Officer that the notice was issued in the name of her husband who was already dead and gone. In our opinion, such intimation to the Assessing Officer cannot be termed as participating in the proceedings. We could have appreciated this argument canvassed on behalf of the Revenue if the writ-applicant would have filed her return accordingly. If that would have been the position, we could have very well accepted the argument that having participated in the proceedings, such issue could not have been raised.

19. We shall now look into the three decisions on which strong reliance has been placed on behalf of the Revenue. In Travels (supra) a notice under Section 148 was issued to the assessee, who appeared in response to the notice before the Assessing Officer and had in fact participated in the proceedings. The assessment was completed by making some additions to the assessee’s income. On appeal, the Commissioner (Appeals) upheld the said order. Before the Tribunal, the assessee challenged the notice issued under Section 148 in status of unregistered firm as illegal and without jurisdiction. The Tribunal held that the notice under Section 148 was bad in law as it did not indicate, whether it was issued to a registered firm or to an individual who was carrying on proprietary business. The Revenue, being dissatisfied, went in appeal before the High Court. The High Court took the view that the Tribunal ought not to have declared the notice under Section 148 to be illegal and without jurisdiction as the assessee did not dispute its status as a firm but the only distinction sought to be made was that it was a registered firm. The High Court took the view that it would not be correct to say that the distinction of status of the unregistered firm and registered firm is of such a nature that it may vitiate the entire proceedings, more so, when the assessee, as a firm, had participated in the proceedings in response to the notice issued under Section 148 of the Act without raising any objection. This is exactly what we have tried to convey in the earlier part of our judgment. This decision is in the facts of its case. We reiterate that in the facts of the present case, the writ-applicant cannot be said to have participated in the proceedings in any manner except informing the Assessing Officer about the demise of the assessee.

20. In Smt.Kaushalyabai (supra), the Madhya Pradesh High Court took the view that the issue, whether a notice on a dead person should be treated to be a procedural irregularity under Section 292B of the Act or whether it would be a nullity remained academic as the widow, i.e. Kaushalyabai had already participated in the proceedings. In the facts of that case, it was noticed that the widow of the assessee, namely Kaushalyabai, had participated in the proceedings. The defect, if any, stood automatically cured. It is a very short judgment delivered by the High Court, but the facts speak for themselves. After the notice was received by Kaushalyabai, though in the name of her late husband, returns were filed under protest. This makes a world of difference. Once returns are filed, it definitely amounts to active participation and submitting to the jurisdiction of the Assessing Officer for the purpose of re-opening of the assessment.

21. In Sri Durga Enterprises (supra), the Karnataka High Court was called upon to decide two substantial questions of law: (i) Whether the Tribunal was correct in holding that the notice issued under Section 148 of the Act, having not mentioned the requirement of filing the return and the date within which the return should be filed, was declared as invalid ? and (ii) Whether the Tribunal was correct in not taking into consideration Section 292B of the Act, which allow to cure any such defects pointed out by the assessee ?

22. Indisputably, the case before the Karnataka High Court was not one in which any notice was issued to a dead person. It was a case in which some particulars were lacking in the notice. In such circumstances, the High Court took the view that such irregularity could have been cured under Section 292B of the Act.

23. We may only add at this stage that Section 292B of the Act is specifically with regard to return of income, etc. which cannot be declared to be invalid on certain grounds. The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. To put it in other words, the notice should be in conformity with and in accordance with the intent and purpose of the Act. In our opinion, a case in which notice is issued to a dead person could be termed as nullity. It is something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor. We also take notice of the fact that in Sri Durga Enterprises (supra), the assessee had not only responded to the notice under Section 148 of the Act within one month but, on the basis of the return filed earlier, participated in the proceedings till the matter reached the FAA and was disposed of.

24. In such circumstances referred to above, none of the three decisions on which reliance has been placed on behalf of the Revenue would make any difference.

25. In the overall view of the matter, we are convinced that the proceedings are not tenable in law.

26. In the result, this writ-application succeeds and is hereby allowed. The impugned notice is hereby quashed and set-aside. All consequential proceedings taken up pursuant to such notice also stand terminated. Rule made absolute.

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