2025 (11) TMI 343 - HC - Income Tax

Petition allowed: Reopening and s.148 notice void where no mandatory s.148A(b) notice and proceedings against deceased

HC allowed the petition, holding the reopening and notice under s.148 void because the AO never issued the mandatory notice under s.148A(b) and the ... Validity of Reopening of assessment - AO at Ahmedabad had never issued the Notice under Section 148A(b) and secondly, the impugned order and Notice are issued against the dead person - HELD THAT:- As on both the counts, the petition deserves to be allowed, in view of the settled legal position as held by this Court in Bhupendra Bhikhalal Desai [2021 (9) TMI 431 - SC ORDER] wherein it is held and observed that Notice issued for commencement of assessment or reassessment proceedings against the dead person is null and void and the notice which has been issued against the assessee could not be sustained. The facts of the present case are similar to the decision in the case of Himadri Kandarp Mehta [2022 (8) TMI 1038 - GUJARAT HIGH COURT]. This Court has followed the above decisions in the case of Nishant Daxeshbhai Mehta LH of Late Daxeshkumar Ranjitrai Mehta [2023 (5) TMI 795 - GUJARAT HIGH COURT] and has quashed such Notice issued against the dead person. In the present case also, the petitioner had informed the AO at Mehsana about death of his father by letter dated 21.02.2023, which was not considered by the AO at Ahmedabad, and therefore, he could not have passed any order u/s 148A(d) of the Act as well as issued the Notice under Section 148 of the Act, in view of the well settled principles that any proceedings against the dead person is a nullity. Additionally, in the facts of the case, no notice was issued by the respondent under Section 148A(b) of the Act. Assessee appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether a notice under Section 148 of the Income Tax Act issued after the death of the assessee is valid. 2. Whether an order under Section 148A(d) of the Income Tax Act passed by an Assessing Officer who did not issue the Section 148A(b) notice (and without recording issuance by the officer who purportedly issued it) is valid. 3. Whether failure to consider a timely reply informing the assessing authority of the assessee's death and jurisdictional locus constitutes a ground to quash subsequent proceedings under Sections 148A and 148. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of Section 148 notice issued after death of the assessee Legal framework: Proceedings under Section 148 (reassessment) require issuance of a valid notice to the assessee; fundamental principle that proceedings cannot be continued against a dead person unless revived in a manner permitted by law. Precedent Treatment: The Court relied on established authority holding that a notice for commencement of reassessment proceedings issued against a deceased person is null and void. Prior decisions of this Court following supreme court authority have quashed notices issued to dead persons. Interpretation and reasoning: The impugned notice under Section 148 was issued in the name of the deceased assessee after the date of death. The Assessing Officer at Ahmedabad proceeded to issue the Section 148 notice despite being put on notice (by a reply and death certificate) that the assessee had expired. Proceedings directed at a person who is dead lack legal efficacy; issuance of a Section 148 notice in such circumstances is a nullity. The Court treated the issuance of a notice to a dead person as vitiating the reassessment process at its inception. Ratio vs. Obiter: Ratio - A notice under Section 148 issued to a deceased assessee is null and void and cannot sustain reassessment proceedings. This principle was applied to the facts and is decisive of the case. Any observations about revival or other procedural remedies are obiter. Conclusion: The Section 148 notice issued after the death of the assessee is invalid and liable to be quashed. Issue 2 - Validity of Section 148A(d) order passed by an officer who did not issue Section 148A(b) notice or record issuance Legal framework: Section 148A(b) requires issuance of a notice and affords an opportunity to explain before making an order under Section 148A(d). The officer making the subsequent order must act within jurisdiction and on the basis of proper antecedent procedure having been followed. Precedent Treatment: Courts have held that procedural compliance and jurisdictional correctness are essential; actions taken without requisite notice or by an officer lacking jurisdiction are invalid. Interpretation and reasoning: The record showed no issuance of Section 148A(b) notice by the Assessing Officer at Ahmedabad; rather, the notice was reportedly issued by the Assessing Officer at Mehsana. The Assessing Officer at Ahmedabad proceeded to pass an order under Section 148A(d) reciting non-reply, notwithstanding that a reply (with death certificate and jurisdictional assertion) had been filed with the Mehsana office. Because the officer who passed the impugned order had not issued the antecedent show-cause notice and there was no record of transfer or proper communication, the order lacked jurisdictional foundation. The Court treated the absence of the foundational notice and ignoring the filed reply as fatal to the validity of the Section 148A(d) order. Ratio vs. Obiter: Ratio - An order under Section 148A(d) is invalid where it is predicated on a Section 148A(b) notice that was not issued by the officer making the order and where issuance is not recorded; such infirmity goes to jurisdiction and the validity of the order. Observations about internal office practice or possible rectification are obiter. Conclusion: The order under Section 148A(d) passed by the Ahmedabad Assessing Officer (without issuing or recording the antecedent Section 148A(b) notice) is illegal and must be set aside. Issue 3 - Effect of a timely reply informing assessing officer of death and jurisdictional locus Legal framework: Principles of natural justice and statutory procedure require that the assessee (or person representing the estate where appropriate) be afforded an opportunity to be heard; jurisdictional rules determine which Assessing Officer may validly issue notices. Precedent Treatment: Decisions have recognized that failure to consider a substantive reply contemporaneously filed (especially one containing a death certificate and jurisdictional assertion) undermines subsequent actions and can render them invalid. Interpretation and reasoning: The petitioner filed a reply on record with the Mehsana Assessing Officer on 21.02.2023, enclosing the death certificate and asserting that the relevant Assessing Officer for the matter would be Ahmedabad because of residence - or, more precisely, that Mehsana had issued the original Section 148A(b) notice. The Ahmedabad authority nonetheless recorded that no reply had been received and proceeded to find the assessee silent. The Court held that ignoring the filed reply and the death certificate, and failing to verify or record issuance by the Mehsana office, nullified the factual basis for the finding of no explanation and the consequent conclusion that income had escaped assessment. Ratio vs. Obiter: Ratio - Failure to consider a timely reply informing the authority of the assessee's death and contesting jurisdiction undermines the validity of any subsequent Section 148A(d) order and Section 148 notice issued on that basis. Remarks on administrative coordination or remittal are obiter. Conclusion: Because the assessing authority failed to consider the reply and death certificate and proceeded as if no response had been filed, the subsequent proceedings are vitiated and liable to be quashed. Cross-references and Aggregate Conclusion These issues are interrelated: the absence of a valid antecedent Section 148A(b) notice by the officer who passed the Section 148A(d) order, coupled with the issuance of the Section 148 notice after the assessee's death and ignoring the timely filed reply/death certificate, rendered the entire reassessment process jurisdictionally defective. The Court therefore quashed the Section 148A(d) order and the Section 148 notice as illegal and unenforceable.