Reassessment notices against deceased person partly stayed requiring 20% deposit under section 147

The Rajasthan HC partly allowed stay applications in reassessment proceedings under section 147. The petitioner challenged notices issued against a deceased person, though notices contained both deceased father's and petitioner's names. The court noted that assessment was based on material recovered during search of third party premises showing transactions with deceased. Despite defects in notices, the court granted conditional relief requiring petitioner to deposit 20% of demand within one month, after which recovery of balance amount would remain in abeyance. The court referenced recent SC judgment in Union of India v. Rajeev Bansal while disposing the matter.

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Issues:
Prayer for stay of effect and operation of impugned assessment orders and demand notices based on common grounds and submissions; Reopening of assessment barred by limitation under new law regime post 01.04.2021; Physical assessment conducted instead of faceless assessment provision; Notices under Section 148 issued in the name of a deceased person; Non-compliance with court order to provide reasons for reopening; Legal basis for reopening assessments post search in another person's premises; Statutory remedy available for reopening assessments within prescribed limitation; Alleged defects in notices issued against a dead person; Challenge to physical assessment in second round of petition; Protection against recovery upon filing statutory appeal and depositing 20% of demand; Stay applications partly allowed with condition of depositing 20% of demand; Incomplete instructions from respondents necessitating filing of reply within four weeks; List all cases for further orders after eight weeks.

Analysis:

The petitions before the court sought a stay on the effect and operation of assessment orders and demand notices issued after reassessment under Section 148 of the Income Tax Act for multiple Assessment Years. The petitioner argued that reopening of assessments in all cases was time-barred under the new law regime post 01.04.2021, citing recent judicial pronouncements and previous court orders granting interim relief in similar cases. Additionally, the petitioner contended that physical assessments were conducted instead of utilizing the faceless assessment provision, contrary to the law.

The petitioner further raised objections regarding the notices issued in the name of a deceased person, labeling all proceedings as nullity. Despite earlier challenges to the notices and directives to provide reasons for reopening, the respondents allegedly failed to comply with court orders and proceeded to pass the impugned assessment orders mechanically. The petitioner relied on various judicial precedents to support these contentions.

On the other hand, the respondents argued that assessments were reopened within the prescribed limitation based on a search conducted in another person's premises, revealing transactions involving the petitioner's deceased father. They emphasized the availability of a statutory remedy for such reassessments and cited judicial decisions to support their position.

After considering the submissions, the court noted the basis for reopening assessments and the petitioner's previous challenges to notices, which were disposed of after reasons were supplied. The court acknowledged the need for deeper consideration in light of recent judicial pronouncements and interim orders passed in similar cases. The court also addressed the alleged defects in notices issued against a dead person and the challenge to physical assessments in subsequent petitions.

The court ordered that if the petitioner deposited 20% of the demand within a month, recovery of the balance amount under assessment orders would be put on hold. The stay applications were partly allowed on this condition. The respondents were directed to file replies within four weeks in cases where instructions were incomplete, with a further two-week period for rejoinder. The cases were listed for further orders after eight weeks, with a copy of the order to be placed in each connected file.

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