LATE MR. SHANKAR MUKUND SHENAI THROUGH HIS LEGAL HEIR SANGEETHA SAMIR KOPPIKAR,MUM vs. ITO-23(3)(3), MUM

आदेश / O R D E R

PER ABY T .VARKEY, JM:

2. At the outset, the Ld. Authorised Representative (AR) of the assessee drew our attention to the legal issue raised by the assessee against the reopening of assessment for assessment year 2009-10. And since, it is a legal issue, we will deal with it first.

P a g e | (A.Y.2009-10) LATE SHRI SHANKAR MUKUND SHENAI 3. The brief facts regarding the legal issue is that the assessee had filed the return of income on 29.07.2009 for assessment year 2009-10 declaring total income of Rs.7,39,340/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). Later, the case of assessee for AY 2009-10 was reopened u/s 147 of the Act, by issuance of notice u/s 148 of the Act, on 28.03.2016. Pursuant thereto, Assessing Officer (AO) notes that assessee requested AO to treat the original return filed on 28.07.2009 as the return filed in response to the notice u/s 148 of the Act. And thereafter, the assessee’s daughter filed a letter dated 27.06.2016 informing him (AO) that assessee (Shri Shankar Mukund Shenai) had expired on 17.01.2016; and she being the daughter of the deceased/legal heir objects to the reopening by stating that “Notice issued on deceased person is void ab initio and the law is very clear that notice cannot be served on the deceased person”. The AO rejected the objection raised by an order dated 02.08.2016 and proceeded to reassess the income of the assessee and made an addition of Rs.52,88,045/-.

4. The action of the AO to have issued notice u/s 148 of the Act, on 28/29.03.2016 was challenged by the assessee (legal heir) before the Ld. CIT(A) who was of the opinion that since the reopening of the assessment was for assessment year 2009-10 when the late assessee was alive, according to him, the action of AO was valid; and also he found fault with the legal heir not to have brought the fact of death of assessee to the notice of the AO. Therefore, the Ld. CIT(A) noted that the AO after coming to know about the death of the assessee (Shri Shankar Mukund Shenai) has brought on record his legal heir Smt. Sangeetha Samir Koppikar and framed assessment in her name, which he upheld.Thus, the Ld. CIT(A) did not find any merit in the legal issue raised by the assessee. This impugned action of the Ld. CIT(A) is challenged before us.

P a g e | (A.Y.2009-10) LATE SHRI SHANKAR MUKUND SHENAI 5. We have heard both the parties and perused the records. It has been brought to our notice that late Shri Shankar Mukund Shenai, the assessee had passed away on 17.01.2016, which fact was brought to the notice of the AO after receipt of notice u/s 148 of the Act, dated 28.03.2016 vide letter dated 27.06.2016, wherein, the assessee’s daughter (Smt. Sangeetha Samir Koppikar) informed the AO about the death of her father and enclosed a copy of the Death Certificate. She also objected to reopening, stating that the issuance of notice to a deceased person is invalid in the eyes of law and therefore, according to her, all proceedings consequent to it is null in the eyes of law. However, the AO brushed aside the objections raised by the daughter/legal heir and proceeded to reassess the total income of the assessee for assessment year 2009-10. This action of the AO has been upheld by the Ld. CIT(A). We cannot countenance such an action of the Ld. CIT(A)/AO. Since, it is an undisputed fact that notice u/s 148 of the Act proposing reopening of the assessment for assessment year 2009-10, was issued by the AO dated 28.03.2016 in the name of deceased assessee (late Shri Shankar Mukund Shenai who expired on 17.01.2016). And his daughter has brought this fact to the notice of the AO vide letter dated 27.06.2016 and despite knowing about it, still the AO proceeded to frame the reassessment (without first dropping the re-assessment action against the deceased person and thereafter, AO ought to have issued fresh notice u/s 148 of the Act, on the legal heir/Smt. Sangeetha Samir Koppikar and then proceeded to frame re-assessment in her name on behalf of deceased assessee.). In the light of the aforesaid undisputed fact, the legal issue raised is noted to be no longer re- integra and for that, we rely on the decision of Hon’ble High Court in the case of RanibenKhimji Patel vs. ACIT & ORs. Writ Petition No.2329 of 2021 wherein on similar facts, it was held as under:

P a g e | (A.Y.2009-10) LATE SHRI SHANKAR MUKUND SHENAI “1. Facts in both petitions are identical, save change in assessment year. In Writ Petition No.2329 of 2021 it is AY. 2014-15 and in Writ Petition No. 2394 of 2021 it is A.Y. 2013-14.

6. On the first ground that notice issued to a dead person is null and void in law, this court in Sumit Balkrishna Gupta vs. Assistant Commissioner of Income Tax, Circle 16(2), Mumbai' has held that notice issued in the name of a dead person for re-opening of assessment is null and void in law. Paragraph no.6 and 7 of the said judgment reads as under:

6. In view of the above, the submission of the Revenue reiterating the grounds in the impugned order dated 13 11 2018 stands negative on facts so far as grounds (b) ie registration as legal heir and (c) ie filing the return in the name of deceased assessee therein are concerned It is not P a g e | (A.Y.2009-10) LATE SHRI SHANKAR MUKUND SHENAI seriously disputed by the Revenue before us that a reopening notice issued in the name of a deceased person is null and void. This in view of the decision of the Gujarat High Court in the case of Vikram Singh Vs Union of India [2018] 401 ITR 302 rendered on 22 1 2018 a decision of Delhi High Court in the case of Rajendra Kumar Sehgal Vs. ITO [2019] 101 taxmann.com 233/260 Taxman 412 rendered on 19 11 2018 and the decision of Madras High Court in the case of AlameluVeerappan Vs. ITO, [2018] 95 taxmann.com 155/257 Taxman 72 These Courts had occasion to consider an identical issue of notice of reopening in the name of the deceased assessee and after considering the same, came to the conclusion that the notice issued in the name of the dead person for reopening of assessment is null and void in law.

7. The issue of a notice under Section 148 of the Act is a foundation for reopening of assessment. 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 a merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee The assessee on whom the notice must be sent must be a living person ie legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and P a g e | (A.Y.2009-10) LATE SHRI SHANKAR MUKUND SHENAI purpose of the Act Therefore, Section 292B of the Act cannot be invoked to correct a foundational/ substantial error as it is meant so as to meet the jurisdictional requirement. Therefore, both the impugned notice dated 29.3.2018 and the impugned order dated 13.11.2018 are quashed and set aside. It is made clear that this order will not prohibit the Revenue from issuing a fresh notice for reassessment if requirement of Section 147/148of the Act are satisfied, including the limitation period therein.”

7. There are many other judgments including one of the Gujarat High Court in case of Bhupendra Bhikhalal desai Vs. Income Tax Officer Ward 1(2)(1) where also the court held that notice issued to a dead person is not valid. This judgment of the Gujarat High Court has been upheld by the Hon’ble Apex Court in ITO Vs. Bhupendra Bhikhalal Desai.

8. In the circumstances, we hereby grant prayer clause- (i) which reads as under: - (i) that this Hon’ble court may be pleased to issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, calling for the records of the Petitioner’s case and after going into the legality and proprietary thereof, to quash and set aside the said notice u/s 148 of the Act dated 30 June 2021 (“Exhibit I”) 9. Since we have quashed the notice itself as not maintainable having been issued to a dead person, we are not considering the other aspect as to whether respondent was correct in issuing notice without following the mandatory provisions of law.”

Order pronounced in the open court on this 29/05/2023.