TaxTMI 
TaxTMI 
2024 (8) TMI 367
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....ansal and Mr. Vishal Chechi, Advs., Mr. Mayank Nagi, Mrs. Husnal Syali Nagi and Mr. Tarun Singh, Advs., For the Respondent Through: Mr. Debesh Panda, SSC and Ms. Zehra Khan, Mr. Vikramaditya Singh, Mr. Vineet Gupta, Ms. Anauntta Shankar and Mr. Ojaswa Pathak, Advs., Mr. Sanjay Kumar and Ms. Easha, Advs. Mr. Sunil Agarwal, SSC, Mr. Shivansh B Pandya, Mr. Viplav Acharya & Mr. Utkarsh Tiwari, Advs. Mr. Anurag Ojha, SSC, Ms. Hemlata Rawat and V.K. Saksena, Advs. Mr. Aseem Chawla, SSC, Ms. Pratishtha Chaudhary and Ms. Simran Jha, Advs., Mr. Gaurav Gupta, SSC. JUDGMENT YASHWANT VARMA, J. (ORAL) 1. These writ petitions impugn actions for reassessment undertaken under the Income Tax Act, 1961 [Act]. The principal ground of challenge which is raised is that the notices were addressed in the name of assessees who had by then expired. 2. Before us, the following details have been provided insofar as some of the writ petitions are concerned. Those details which have been set out in tabular form are reproduced hereinbelow: - Item No. WP(C) No. Cause List Date of Death Date of intimation of death to department 38 W.P.(C) 5789/2021 Prateek Soni L/h of Rajendar Kumar deceased vs. NFA....
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....ce could never have been served upon him. Consequently, the jurisdictional requirement under section 148 of the Act, 1961 of service of notice was not fulfilled in the present instance. In the opinion of this court the issuance of a notice under section 148 of the Act is the foundation for reopening of an assessment. Consequently, the sine qua non for acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of the correct person. This requirement of issuing notice to a correct person and not to a dead person is not merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. (See Sumit Balkrishna Gupta v. Asst. CIT [(2019) 414 ITR 292 (Bom); 2019 SCC OnLine Bom 13178; [2019] (2) TMI 1209 (Bom).]). In Chandreshbhai Jayantibhai Patel v. ITO [(2019) 413 ITR 276 (Guj); 2018 SCC OnLine Guj 4812; [2019] (1) TMI 353 (Guj).] the Gujarat High Court has also held (page 290 of 413 ITR): 'The question that therefore arises for consideration is whether the notice under section 148 of the Act issued against the deceased-assessee can be said to be in conformity with or according to the intent and purposes of the....
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....er the Department was made aware by the legal representatives or not is irrelevant. In Alamelu Veerappan [Alamelu Veerappan v. ITO, (2018) 12 ITR-OL 95 (Mad); 2018 SCC OnLine Mad 13593.] it has been held 'nothing has been placed before this court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased-assessee to immediately intimate the death of the assessee or take steps to cancel the permanent account number registration". The judgment in Pr. CIT v. Maruti Suzuki (India) Ltd. [(2019) 416 ITR 613 (SC); (2020) 18 SCC 331.] offers no assistance to the respondents. In Pr. CIT v. Maruti Suzuki (India) Ltd. [(2019) 416 ITR 613 (SC); (2020) 18 SCC 331.] the Supreme Court was dealing with section 170 of the Act, 1961 (succession to business otherwise than on death) wherein notice under section 143 (2) of the Act, 1961 was issued to non-existing company. In that case, the Department by very nature of transaction was aware about the amalgamation. However, the said judgment nowhere states that there is an obligation upon the legal representative to inform the Income-tax Department about the death of the assessee or to surrender....
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....of the deceased assessee without bringing on record all his legal heirs as per the requirement of law. 12. In the present case, the jurisdictional notice under section 143 (2) of the Act was issued against the dead person and the assessment order has also been passed against the dead person on his permanent account number without bringing on record all his legal representatives, therefore, the said assessment order and the subsequent notices are null and void and are liable to be set aside. 13. Consequently, the impugned notice dated September 22, 2019 issued under section 143 (2) of the Act and the impugned assessment order dated September 30, 2021 is set aside along with all consequential proceedings and notices. The petition is allowed; however, the Revenue will have the liberty to take steps in the matter, albeit as per law. In case any such-steps are taken, the petitioner will have liberty to assail the same, in accordance with law." 16. On the touchstone of the principles that emerge from the judicial pronouncements discussed above, it is crystal clear that the action under section 147 of the Act cannot be initiated on the factum as the impugned notices were issued to a....
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....y in relation to a legal representative. (6) The liability of a representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability." 5. As is manifest from the above, the statute does not debar the respondents from continuing or drawing proceedings against the legal representative of a deceased assessee. Section 159 (2) of the Act clearly envisages such a situation and upon such a contingency coming into being, the respondents stand enabled to either draw or continue proceedings against the legal representative. It becomes pertinent to note that Section 159 (2) of the Act empowers the respondents to make an assessment, reassessment or re-computation against a legal representative of a deceased assessee. The deeming fiction comprised in Section 159 (2) (a) is essentially to ensure that proceedings pending on the date of death do not come to an abrupt or unforeseen closure. Similarly, the provision envisages a continuance of proceedings against the legal representative. However, neither of those stipulations can be read or construed as obviating the requirement ....
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....im as the legal representative of the Maharaja of Patiala, the assessments made were illegal. The contention was that the notices were really addressed to the late Maharaja, who was not alive when the said notices were issued and that they were wrongly served upon him. The argument was rejected by the authorities under the Act as well as by the High Court on reference. The Division Bench comprising Beaumont, C.J. and Kania, J. held that inasmuch as the present Maharaja, (who raised the contention of nullity) was the legal representative of the late Maharaja of Patiala and because the return of the late Maharaja's income was made by the Foreign Minister on his behalf and because he knew perfectly well that what was being assessed was the income of his predecessor, the assessment made, though not complying strictly with Section 24-B (corresponding to Section 159 of the present Act), is yet valid. The following observations of Beaumont, C.J., are relevant for our purpose: "In this case the person to be assessed was the late Maharaja, who had died before he was served with any notice under Section 22, and, therefore, the provisions of Section 24-B(2) apply, and the Income Tax Off....