Case Law Details
Krishnaawtar Kabra L/H of Jagannath Rampal Kabra Vs ITO (Gujarat High Court)
In a recent judgment, the Gujarat High Court addressed the issue of the validity of a notice issued under Section 148 of the Income Tax Act, 1961 to a deceased assessee. The court ruled that the reopening of the assessment based on such a notice was void ab initio, emphasizing the importance of a valid notice for the jurisdiction of the Assessing Officer. The case involves Krishnaawtar Kabra, the son of the deceased assessee, challenging the notice issued in the name of his late father, Jagannath Rampal Kabra, for the assessment year 2017-18.
Background: Jagannath Rampal Kabra passed away on 07.07.2020, and despite his demise, a notice under Section 148 was issued on 31.03.2021 for the assessment year 2017-18. The Assessing Officer alleged that the deceased assessee had claimed a bogus accommodation entry of Rs.50,00,000, leading to an escapement of income. In response to the notice, the legal representative, Krishnaawtar Kabra, filed a return of income on 26.05.2021, declaring a total income of Rs.14,45,710. Subsequently, the Assessing Officer provided the reasons for reopening the assessment, and objections were raised by the legal representative on the grounds that the proceedings were initiated against a deceased person, making the notice void.
Legal Provisions and Previous Precedent: The court referred to Section 159(2)(b) of the Income Tax Act, which allows the Assessing Officer to take proceedings against the legal representative if they could have been taken against the deceased assessee. It also discussed Section 292B, which validates returns, assessments, notices, or other proceedings with mistakes or defects if they are in substance and effect in conformity with the intent and purpose of the Act.
The court relied on a previous judgment in Chandreshbhai Jayantibhai Patel vs. Income Tax Officer [2019] 413 ITR 276 (Guj.), which held that a notice issued to a dead person under Section 148 cannot be continued against the legal representative unless the legal representative submits to the jurisdiction without raising objections.
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