2019 (2) TMI 1209 - HC - Income Tax

Reassessment notice u/s148 sent to deceased taxpayer held void; service on legal heir required; fresh notice allowed.

A reassessment notice issued under s. 148 in the name of a deceased assessee was held to be void ab initio because service on a 'correct person' is a ... Reopening of assessment - Notice under Section 148 of the Income Tax Act, 1961 - Validity of notice issued in the name of a deceased assessee - Jurisdictional requirement to issue notice to the correct person - Curative scope of Section 292B - Legal heirNotice under Section 148 of the Income Tax Act, 1961 - Validity of notice issued in the name of a deceased assessee - Jurisdictional requirement to issue notice to the correct person - Curative scope of Section 292B - Legal heir - Whether a notice for reopening under Section 148 issued in the name of a deceased assessee is valid and whether the defect can be cured by invoking Section 292B. - HELD THAT: - The Court held that issuance of a notice under Section 148 is foundational to the jurisdiction to reopen an assessment and must be addressed to the correct person capable of being proceeded against; where the original assessee is dead the notice must be issued to the legal heir. A notice issued in the name of a deceased person is not merely a procedural irregularity but a condition precedent to confer jurisdiction and therefore is void. The Court rejected the contention that Section 292B could cure such a foundational/substantive defect, observing that the curative provision cannot be invoked to validate a notice that fails the basic jurisdictional requirement. The Court noted prior High Court decisions to like effect, referencing Vikram Singh , Rajendra Kumar Sehgal and Alamelu Veerappan , which considered identical questions and concluded that a reopening notice in the name of a deceased assessee is null and void. Applying these principles to the undisputed facts (including that the petitioner had registered as legal heir and had acted as such in subsequent proceedings), the Court found the impugned notice and the order rejecting the preliminary objection to be invalid and unsustainable. [Paras 6, 7, 8]Impugned notice dated 29.3.2018 and the order dated 13.11.2018 are quashed and set aside; Revenue may, if the statutory requirements are satisfied, issue a fresh notice in the name of the proper person.Final Conclusion: Writ petition allowed: the reopening notice and the order rejecting the objection were quashed as the notice was issued in the name of the deceased assessee; Revenue remains free to issue a fresh notice complying with the requirements of Sections 147/148 (including limitation) addressed to the proper person. Issues:Challenge to notice under Section 148 of the Income Tax Act, 1961 issued in the name of deceased assessee.Analysis:The petitioner, a legal heir of the deceased assessee, challenged a notice dated 29.3.2018 issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the year 2011-12. The petitioner contended that the notice was without jurisdiction as it was issued in the name of the deceased person. The Assessing Officer rejected the objection, citing Section 292B of the Act, lack of registration as a legal heir, and the filing of a return in the deceased's name for another assessment year. However, it was established that the petitioner had registered as the legal heir of the deceased after the return was filed, and the assessment for a subsequent year was done in the petitioner's name. The Revenue's argument was refuted based on precedents from Gujarat, Delhi, and Madras High Courts, which deemed notices issued in the name of deceased persons for reopening assessments as null and void.The Court emphasized that issuing a notice to the correct person is essential for reopening an assessment under Section 148. It was clarified that such a requirement is not merely procedural but a condition precedent for a valid notice. Notices issued in the name of deceased persons are not protected by Sections 292B or 292BB of the Act. The foundational requirement to acquire jurisdiction for reassessment is serving a notice on the correct person, who must be a living legal heir of the deceased assessee. Therefore, the impugned notice and order were quashed, allowing the Revenue to issue a fresh notice for reassessment if statutory requirements are met, including the limitation period.In conclusion, the petition was disposed of by setting aside the impugned notice and order, clarifying that the decision did not prevent the Revenue from issuing a fresh notice if statutory conditions for reassessment were fulfilled.