2019 (7) TMI 544 - HC - Income Tax

Invalid Notice under Section 148 Annulled; Legal Rep Objects, Section 292B Inapplicable

LATE BHARTI HARENDRA MODI BY HER LEGAL HEIR NIKHIL HARENDR MODI Versus INCOME TAX OFFICER, WARD 3 (1) (2), VADODARA

LATE BHARTI HARENDRA MODI BY HER LEGAL HEIR NIKHIL HARENDR MODI Versus INCOME TAX OFFICER, WARD 3 (1) (2), VADODARA - TMI Issues Involved:1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person.2. Applicability of Section 292B of the Income Tax Act, 1961 to cure defects in the notice.3. Relevance of Section 159 of the Income Tax Act, 1961 regarding legal representatives.Issue-wise Detailed Analysis:1. Validity of Notice Issued to a Deceased Person:The primary issue in this case is whether a notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person can be considered valid. The Court noted that the notice dated 29.03.2019 was issued to Smt. Bharti Harendra Modi, who had passed away on 20th May, 2017. The petitioner, her son, argued that the notice was invalid as it was issued to a dead person. The Revenue acknowledged this fact but contended that the notice would not become a nullity merely due to this defect, relying on Section 292B of the Act.2. Applicability of Section 292B of the Income Tax Act, 1961:Section 292B of the Act states that no notice shall be invalid merely by reason of any mistake, defect, or omission if it is in substance and effect in conformity with the intent and purpose of the Act. The Revenue argued that the notice issued to the deceased should be deemed valid under this provision. However, the Court referred to its earlier decision in Chandreshbhai Jayantibhai Patel vs. Income-tax Officer [(2019) 101 taxmann.com 362 (Gujarat)], which clarified that a notice under Section 148 is a jurisdictional notice, and the existence of a valid notice is a condition precedent for the Assessing Officer to assume jurisdiction. A notice issued to a dead person is invalid unless the legal representative submits to the jurisdiction without raising any objection.3. Relevance of Section 159 of the Income Tax Act, 1961:The Revenue also relied on Section 159 of the Act, which deals with the liability of legal representatives. Section 159(2)(b) provides that any proceeding which could have been taken against the deceased may be taken against the legal representative, and all provisions of the Act shall apply accordingly. However, the Court emphasized that for initiating proceedings against a legal representative, a valid notice under Section 148 must be issued to them. Since the notice in this case was issued to the deceased and not to the legal representative, it was deemed invalid.Conclusion:The Court concluded that the notice issued under Section 148 to the deceased was invalid. The legal representative had not waived the requirement of a valid notice and had objected to the continuation of proceedings. Consequently, the provisions of Section 292B could not cure this defect. The impugned notice and all proceedings pursuant to it were quashed and set aside. The writ application was allowed, and the rule was made absolute with no order as to costs.