Reopening of assessment upheld; suppression by assessee found; legal heir treated as deemed assessee; respond to s.142(1) notice

HC upheld reopening of assessment, finding attempted suppression by the assessee and rejecting the contention that notices/orders issued in the name of the deceased are non-est. The ITO's noting of the death is accepted, and the legal heir is to be treated as deemed assessee for future proceedings. The petitioner must respond to the reissued s.142(1) notice. The revenue is directed to correct records to reflect the deceased as "C/o. legal heir" and may, if desired, issue a fresh notice under s.148(1).

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Issues:
1. Reopening of assessment for AY-2013-2014 of a deceased individual under Section 148 of the Income Tax Act 1961.
2. Failure to inform the tax department about the death of the individual.
3. Communication regarding legal heirs of the deceased and the issuance of notices in the name of the deceased.

Analysis:

1. The judgment deals with the reopening of assessment for AY-2013-2014 of a deceased individual under Section 148 of the Income Tax Act 1961. The deceased individual's legal heir, the petitioner, informed the tax department about the death of the deceased through a letter dated 27th July 2021. However, the court found that there was no evidence that the letter was actually issued. The petitioner later submitted an affidavit with a postal receipt addressed to the Income Tax Officer, but the court did not accept that the department was informed about the death based on this submission.

2. The court noted that despite the alleged letter dated 27th July 2021 informing the tax department about the death of the deceased, the deceased was served with subsequent notices under Section 142(1) and Section 148A(b) of the Act. The petitioner did not respond to these notices, and the court expected the petitioner to inform the department about the death of the deceased in a timely manner.

3. Subsequently, the deceased was served with a notice under Section 148A(b) of the Act, to which a reply was sent by the petitioner through the deceased's Chartered Accountants. The Chartered Accountants informed the Income Tax Officer about the death of the deceased but did not disclose the details of the legal heir initially. After further communication, the details of the petitioner as the legal heir were disclosed. The court agreed with the Income Tax Officer's view that an attempt to suppress details had been made by the petitioner. The court emphasized that future notices would be issued in the name of the legal heir and directed the tax department to ensure correct record-keeping and issuance of notices in the name of the legal heir.

4. The court clarified that all rights and contentions other than the notice issued to a deceased person were kept open for further consideration. The petition was disposed of with no order as to costs, and the petitioner was directed to respond to the notice issued in the name of the deceased in accordance with the law. The tax department was directed to update its records to reflect the legal heir's name for future communication and issuance of notices.

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