2021 (10) TMI 733 - AT - Income Tax

Invalid Assessment Order Quashed Due to Notice Issued to Deceased: Importance of Correct Notice Service

Smt Priyamvada Jaiswal Versus Income Tax Officer-3 (5) Kanpur

The Tribunal allowed the appeal, holding that the assessment order based on the notice issued to a deceased person was invalid and quashed. The Tribunal ... Reopening of assessment u/s 147 - Notice u/s. 148 having been issued in the name of a dead person - no notice u/s. 148 has been issued in the name of the legal heir - HELD THAT:- The statement of facts filed before ld. CIT(A) clearly mentions that Shri Ajit Jaiswal had died on 26.05.2010 - AO in his assessment order himself has noted that the assessee had expired and even after having come to know about the fact of having assessee been dead he did not drop the proceedings against him and issued fresh notice u/s. 148 in the name of legal heir but continued the proceedings in the name of his legal heir. During the course of proceedings before us the ld. DR was directed to file a copy of notice u/s. 148 and which he has filed after the hearing. From the copy of notice u/s. 148 find that such notice dated 24.02.2014 has been issued in the name of Shri Ajit Jaiswal who was not in existence at the time of issue of notice u/s. 148 as he had died on 26.05.2010. Such notice issued in the name of a dead person is not enforceable and cannot be said to be valid notice and further I find that no notice u/s. 148 has been issued in the name of the legal heir of the assessee. -Decided in favour of assessee. Issues:Validity of notice u/s. 148 issued in the name of a deceased person.Analysis:The appeal was filed against the order of ld. CIT(A)-I, Kanpur, challenging the validity of the notice u/s. 148 issued in the name of a deceased person. The appellant argued that the notice was illegal as it was issued in the name of a person who was no longer alive. The appellant relied on a judgment of the Lucknow Bench of the Tribunal in a similar case where it was held that a notice issued in the name of a dead person cannot lead to a valid assessment order.The Department contended that after learning about the death of the assessee, they included the legal heirs in the proceedings and issued further notices in the name of the legal heir. However, the appellant argued that no notice u/s. 148 was issued in the name of the legal heir of the assessee. The Tribunal observed that the notice issued in the name of a deceased person was not enforceable and could not be considered valid. It was noted that the requirement of issuing a notice to the correct person is crucial for the validity of the notice and subsequent assessment order.The Tribunal referred to various judicial decisions, including one by the Lucknow Bench and another by the Chandigarh Bench, where similar issues were addressed. The Tribunal highlighted that the foundational requirement for reopening an assessment is issuing a notice in the name of the correct person, and notices issued in the name of dead persons are not protected by provisions of the Income-tax Act. The Tribunal emphasized that serving a notice to a correct person, which includes the legal heir of the deceased assessee, is essential for the validity of the notice and subsequent proceedings.The Tribunal rejected the Department's argument that the legal representative should have informed the Assessing Officer about the death of the assessee promptly. It was noted that the notice was served through affixation and not by regular means, raising doubts about the diligence of the Revenue officials. The Tribunal found discrepancies in the service of the notice and concluded that the notice issued u/s. 148 in the name of a dead person was invalid, leading to the quashing of the assessment order.In light of the legal principles and precedents discussed, the Tribunal allowed the appeal of the assessee, holding that the assessment order based on the notice issued to a deceased person was invalid and therefore quashed. The Tribunal dismissed the other grounds of appeal as they were not argued, resulting in the partial allowance of the appeal.In conclusion, the Tribunal upheld the argument that a notice issued in the name of a dead person cannot empower the Assessing Officer to pass a valid assessment order, leading to the quashing of the assessment order in this case.