2019 (7) TMI 604 - HC - Income Tax

Invalidity of Notice Issued to Deceased Person under Income Tax Act Section 148

The court held that a notice issued under Section 148 of the Income Tax Act to a deceased person was invalid. The legal representative's objection and ... Validity of notice under Section 148 - Jurisdictional notice - Section 159(2)(b) - legal representative may be proceeded against - Section 292B - curable procedural defects - Waiver by participationValidity of notice under Section 148 - Section 159(2)(b) - legal representative may be proceeded against - Section 292B - curable procedural defects - Jurisdictional notice - Waiver by participation - Notice under Section 148 issued in the name of a deceased assessee is invalid where the legal representative objects and does not submit to the jurisdiction. - HELD THAT: - The court held that a notice under Section 148 is a jurisdictional prerequisite for assuming jurisdiction under Section 147. Section 159(2)(b) permits proceedings which could have been taken against the deceased to be taken against the legal representative, but where no proceeding under Section 147 was initiated prior to death, a fresh valid notice under Section 148 must be issued to the legal representative. Section 292B cures procedural mistakes only where the impugned notice is in substance and effect in conformity with the intent of the Act; it cannot validate an otherwise jurisdictional defect. The distinction with earlier authorities is that where a legal representative, after receiving a defective notice, participates by filing returns or otherwise submits to the jurisdiction, the defect may be treated as waived and the proceedings may be permitted to continue; by contrast, if the legal representative from the outset objects and does not file a return or submit, the notice addressed to the deceased cannot be said to satisfy the Act's requirements and is invalid. Applying these principles, since the petitioner (legal representative) promptly informed the department of the death and objected to the notice and did not submit to jurisdiction, the impugned notice issued to the deceased could not be cured under Section 292B and the consequent reassessment proceedings were without authority of law. [Paras 15, 16, 17, 18, 19]The notice under Section 148 issued to the deceased is invalid where the legal representative objects and does not submit to jurisdiction; a fresh notice may be issued to the legal representative if not barred by limitation.Final Conclusion: Writ petition allowed; impugned notice dated 30.03.2019 under Section 148 and all proceedings pursuant thereto 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 to a deceased person.2. Applicability of Section 292B of the Income Tax Act, 1961 to cure defects in the notice.3. Legal representative's role and obligations under Section 159 of the Income Tax Act, 1961.Detailed Analysis:1. Validity of Notice Issued to a Deceased Person:The primary issue was whether a notice issued under Section 148 of the Income Tax Act, 1961 to a deceased person could be considered valid. The petitioner, being the legal heir of the deceased, argued that the notice issued to a dead person is invalid. The court noted that the notice dated 30.03.2019 was issued to Smt. Nanduben Ratilal Patel, who had passed away on 15.03.2018. The court referenced its earlier decision in Chandreshbhai Jayantibhai Patel vs. Income-tax Officer, which clarified that a notice issued to a deceased person is invalid unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection.2. Applicability of Section 292B of the Income Tax Act:The Revenue argued that under Section 292B of the Act, a notice would not become invalid merely due to some mistake or defect. They contended that the notice issued to a deceased person could be considered valid under this section. However, the court emphasized that Section 292B does not apply to jurisdictional notices like those under Section 148. The court stated, 'A notice issued under section 148 of the Act against a dead person is invalid, unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection.' Since the legal representative did not waive his right to a notice under Section 148, the notice could not be deemed valid under Section 292B.3. Legal Representative's Role and Obligations:The court examined Sections 159(2)(b) and 159(3) of the Income Tax Act, which state that legal representatives of the deceased are deemed to be assessees and are responsible for the deceased's tax obligations. However, the court clarified that for initiating proceedings under Section 147, a valid notice under Section 148 must be issued to the legal representative. In this case, the notice was issued to the deceased, and the legal representative immediately objected and did not submit to the jurisdiction by filing a return of income. The court held, 'The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted.'Conclusion:The court concluded that the notice issued under Section 148 to a deceased person was invalid, and the proceedings initiated based on such notice were without authority of law. The impugned notice dated 30.03.2019 and all proceedings pursuant thereto were quashed and set aside. The writ application was allowed, and the rule was made absolute with no order as to costs.