2019 (4) TMI 784 - HC - Income Tax

Invalidity of Notice Under Section 148 of Income Tax Act for Deceased Person

The court held that a notice under Section 148 of the Income Tax Act issued against a deceased person is null and void. It cannot be validated under ... Notice under section 148 - jurisdictional notice - notice issued to a deceased person is nullity - requirement of notice to the assessee / legal representative - non-waiver by legal representative - curable defect / section 292B - section 159 - legal representativeNotice under section 148 - jurisdictional notice - notice issued to a deceased person is nullity - non-waiver by legal representative - curable defect / section 292B - section 159 - legal representative - Validity of notice dated 28.3.2018 under section 148 issued in the name of a deceased assessee and whether it can be validated under section 292B - HELD THAT: - The Court held that a notice under section 148 is a jurisdictional notice and a condition precedent for assumption of jurisdiction under section 147. A notice issued to a deceased person is invalid unless the legal representative, without objection, submits to the jurisdiction. Where the legal representative immediately objected to the notice and did not file a return or otherwise participate, there is no waiver and the defect cannot be cured by invoking section 292B. The department's prior knowledge of death (intimation given in response to a summons before issuance of the impugned notice) precluded any suggestion that the Assessing Officer was unaware and required issuance under section 159; moreover, the fact that the PAN remained active did not permit presumption that the taxpayer was alive or validate the notice. Consequently, the notice issued to the deceased assessee is a nullity and proceedings founded on it cannot be sustained; if required, the Assessing Officer may issue a fresh notice to the legal representative in accordance with law and limitation. The Court applied these conclusions to the facts where the petitioner had notified the department of the death before the impugned notice and had consistently objected without participating in the proceedings. [Paras 7, 8, 9, 10, 11]Impugned notice dated 28.3.2018 under section 148 issued in the name of the deceased is invalid; proceedings pursuant thereto are quashed and set aside.Final Conclusion: The petition is allowed. The notice dated 28.3.2018 issued under section 148 and further proceedings thereunder are quashed and set aside; no order as to costs. Issues Involved:1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 against a deceased person.2. Applicability of Section 292B of the Income Tax Act, 1961 to validate the notice.3. Requirement of informing the Income Tax Department about the death of the taxpayer.Issue-wise Detailed Analysis:1. Validity of Notice Issued Under Section 148 Against a Deceased Person:The petitioner challenged the notice dated 28.3.2018 issued under Section 148 of the Income Tax Act, 1961, on the ground that it was issued against a dead person, Kanubhai Nagjibhai Rajpara, who expired on 12.6.2015. The petitioner had informed the authorities about the death of his father and submitted the death certificate on 13.3.2018. Despite this, the respondent issued the impugned notice and subsequent notices under Section 142(1) of the Act. The court held that a notice under Section 148 of the Act against a dead person is null and void. The petitioner relied on previous judgments, including Chandreshbhai Jayantibhai Patel v/s. The Income Tax Officer and Rasid Lala v. Income Tax Officer, to support his contention that such a notice is without jurisdiction and cannot be continued.2. Applicability of Section 292B to Validate the Notice:The respondent argued that the notice issued under Section 148 should be validated under Section 292B of the Act, which allows for the correction of technical defects in notices. However, the court distinguished this case from others where legal representatives had participated in proceedings. In this case, the petitioner objected to the validity of the notice from the inception and did not file a return in response to the notice. The court concluded that Section 292B could not be applied to validate a jurisdictional notice issued to a deceased person, as it affects the validity of the proceedings.3. Requirement of Informing the Department About the Death of the Taxpayer:The respondent contended that the petitioner did not inform the jurisdictional Assessing Officer about the death of his father and that the Permanent Account Number (PAN) of the deceased remained active. The court noted that the petitioner had informed the department about the death through a summons issued under Section 131(1A) of the Act before the issuance of the impugned notice. The court rejected the argument that an active PAN implies the taxpayer is alive and emphasized that the department was aware of the death before issuing the notice.Conclusion:The court concluded that the notice under Section 148 issued to a deceased person is invalid and cannot be validated under Section 292B. The proceedings based on such a notice are without authority of law. Consequently, the impugned notice dated 28.3.2018 and further proceedings thereto were quashed and set aside. The petition was allowed, and the rule was made absolute with no order as to costs.