Case Law Details
Late Lodaya Navalbai Vs ITO (ITAT Bangalore)
The crux of the matter lies in the issuance of a notice under Section 148 of the Income Tax Act to a deceased person. The legal heir, Mr. Sharadkumar R. Lodaya, was served with a notice regarding the deceased’s tax assessment. However, the initial notice issued directly to the deceased was a procedural flaw. Despite attempts to rectify this by issuing a manual notice to the legal heir, the timing of such action was questioned. Section 159 of the Act clarifies the liabilities and procedures regarding tax assessments of deceased individuals. While it allows proceedings to be initiated against legal representatives, the timing and validity of notices become crucial. In this case, the reassessment notice served on the deceased was deemed void-ab-initio due to its issuance post the demise. The argument for curing this defect under Section 292BB was contested. Section 292BB deems notices valid under certain circumstances, provided the assessee has cooperated in the proceedings. However, in the case of a deceased assessee, participation is impossible, rendering the section inapplicable. Legal precedents, including the decisions of the Hon’ble Delhi and Jurisdictional High Courts, reinforced the importance of proper notice issuance. The jurisdictional error in serving notices to deceased individuals cannot be cured by procedural provisions.
The ITAT Bangalore, in its ruling, upheld the principle that a valid notice under Section 148 is a jurisdictional prerequisite for reassessment proceedings. The issuance of notices to a deceased individual, without timely rectification, renders the entire assessment void-ab-initio. Consequently, the reassessment proceedings against Late Lodaya Navalbai were quashed. The alleged addition of Rs. 73,00,000 in the assessment order was deemed null and void.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal at the instance of the assessee is directed against the NFAC order vide DIN & Order No. ITBA/NFAC/S/250/2023- 24/1058449337(1) dated 04.12.2023 passed u/s. 250 of the IT Act, 1961.
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