Reassessment under s.148 against deceased invalid; post-01.04.2021 notice, order in dead name incurable by ss.292B, 292BB

HC held that reassessment proceedings initiated under s.148 against a deceased assessee, and subsequent notice issued to the legal heir post-01.04.2021, were invalid for non-compliance with the amended provisions of the Act. The impugned order was also passed in the name of the dead person and was therefore a nullity. HC ruled that ss.292B and 292BB could not cure this fundamental defect. Relying on SC and other HC rulings, HC quashed and set aside the reassessment proceedings and all consequential orders.

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Issues Involved:
1. Issuance of notice under Section 148 of the Income Tax Act, 1961 to a deceased person.
2. Validity of subsequent notices and assessment orders issued to the legal heir.
3. Applicability of Sections 292B and 292BB of the Income Tax Act.

Summary:

Issue 1: Issuance of Notice to Deceased Person

The petitioner contended that the notice under Section 148 of the Income Tax Act, 1961 was issued to the deceased Ms. Shah, making it void ab initio. The court noted that the original assessee, Ms. Shah, had passed away on 16.02.2021, and the notice was issued on 27.03.2021. The court referred to various precedents, including 'Chandreshbhai Jayantibhai Patel Vs. ITO' and 'Savita Kapila Vs. Assistant Commissioner of Income-tax, Circle 4(1)', which held that notices issued to deceased persons are invalid and cannot be cured by Sections 292B and 292BB.

Issue 2: Validity of Subsequent Notices and Assessment Orders

The court observed that after the death of Ms. Shah, the respondent authorities issued a notice to the legal heir, the petitioner, but the assessment order was still passed in the name of the deceased. This was deemed a nullity. The court emphasized that any notice issued post-01.04.2021 must comply with the amended provisions of the Act, which was not done in this case. The court cited 'PCIT Vs. Maruti Suzuki India Ltd.' and 'Sandeep Chopra Vs. Principal Commissioner of Income Tax' to support its decision that proceedings against a deceased person are void.

Issue 3: Applicability of Sections 292B and 292BB

The court held that Sections 292B and 292BB do not apply to the facts of this case. Section 292B cannot save a notice issued to a dead person, and Section 292BB applies to an assessee, not to a legal representative. The court referred to 'Rajender Kumar Sehgal Vs. ITO' and 'Krishnaawatar Kabra Vs. Income-Tax Officer' to underline that these sections cannot cure the fundamental defect of issuing a notice to a deceased person.

Conclusion:

The court quashed and set aside the impugned notices dated 27.03.2021 and 30.06.2021, as well as the assessment order dated 29.03.2023, declaring them null and void. The petition was allowed, and the rule was made absolute.

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