SMT. LALITA RAWAT, 40, RAWAT PALACE, NEAR MURLI MANOHAR MANDIE, BAS PADANPURA, JAIPUR,JAIPUR vs. ITO WARD-5(5), JAIPUR, WARD-5(5), JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 671/JP/2019 fu/kZkj.k o"kZ@Assessment Year :2009-10 cuke Smt. Lalita Rawat, The ITO Vs. L/H W/o Lt. Sh. Gopal Lal Rawat, Ward 5(5), 40, Rawat Palace, Near Murli Jaipur Manohar Mandie, Bas Badanpura, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACSPR4790A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Ashish Sharma jktLo dh vksj ls@ Revenue by : Ms. Chanchal Meena (ACIT) lquokbZ dh rkjh[k@ Date of Hearing : 20/08/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 26/08/2020

vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)-22, Alwar dated 27.02.2019 wherein the assessee has taken the following grounds of appeal:- “1. That the authorities below have grossly erred in upholding the validity and sanctity of re-assessment notice issued u/s 148 to the person who had left for heavenly abode even before issuing the notice. 2. That the authorities below have failed to appreciate the fact of re-assessment notice and consequential re-assessment

2 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur order having become null and void as have been issued to and passed in respect of non-est. person. 3. That the Commissioner of Income-Tax (Appeals) has grossly erred in sustaining the addition of Rs. 26,26,772/- on account of long term capital gains.”

3 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur much prior to the issuance of notice u/s 148 on 30.03.2016. It was submitted that the impugned notice having been issued in the name of a dead person was an invalid notice and consequently such proceedings are void ab initio. It was further submitted that the AO did not issue any notice u/s 148 of the Act or 142(1) of the Act in the name of the legal heir and even subsequent notices and query letters were issued in the name of deceased assessee. Therefore, the reassessment framed by the AO on the basis of the notice issued u/s 148 of the Act in the name of the deceased assessee was invalid and void ab initio. In support, reliance was placed on the Co-ordinate Bench decision in case of Balbir Singh vs ITO 72 ITR (Trib) 389 and decision of the Hon’ble Bombay High Court in case of Sumit Balkrishna Gupta vs. Assistant CIT, Circle 16(2) (2019) 414 ITR 292 (Bom).

4 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur reassessment order. It was further submitted that there was no intimation about the death of the assessee to the Department and thereafter, for the first time on 17.10.2016, the son the deceased assessee produced the death certificate of the deceased assessee and thereafter, produced the particulars of the family members of the deceased assessee and has not raised any such objections during the course of reassessment proceedings and therefore, raising such objections at this stage of the proceedings cannot be allowed. She accordingly supported the findings of the AO and the ld CIT(A).

We have heard the rival contentions and perused the material 6. available on record. The undisputed facts are that the assessee, Shri Gopal Lal Rawat had expired on 24.04.2012 at the Kanpur railway station as per death certificate dated 25.06.2012 issued by Kanpur Municipal Corporation. Thereafter, the reasons for reopening the assessment u/s 147 were recorded and thereafter approved by the Competent authority on 23.03.2016 and the notice u/s 148 was issued in the name of deceased assessee on 30.03.2016. Therefore, at the time of issuance of the notice u/s 148, the assessee had already expired and the notice was thus issued in the name of deceased assessee. Further, we find that there is no subsequent notice u/s 148 which was issued by the Assessing Officer on the legal heirs of the deceased assessee and therefore, the provisions of section 159 cannot be invoked in the instant case. In any case, the limitation for issue of notice u/s 148 had expired on 31.03.2016 and beyond such limitation period, no notice can be issued in the name of the legal Heirs. It is a settled legal proposition that the notice issued u/s 148 in the name of the deceased assessee is a nullity in the eyes of law. Consequently, the present

5 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur reassessment proceedings initiated by issuance of notice in the name of the deceased assessee and consequent reassessment proceedings is hereby quashed for want of jurisdiction. Similar view has been taken by this Bench in case of Late Shri Bhura Ram, Jaipur vs ITO, Jaipur (ITA No. 989/JP/2015 dated 26/11/2019) and the relevant findings read as under:

“8. We have heard the rival contentions and perused the material available on record. The undisputed facts are that the assessee, Shri Bhura Ram had expired on 26.11.2008 as per death certificate dated 11.02.2009 issued by Jaipur Municipal Corporation. The reasons for reopening the assessment u/s 147 were recorded on 15.03.2013 and thereafter the notice u/s 148 was issued in the name of assessee on 20.03.2013. Therefore, at the time of issuance of the notice u/s 148, the assessee had already expired and the notice was thus issued in the name of deceased assessee. Further, we find that there is no subsequent notice u/s 148 which has been issued by the Assessing Officer on the legal heirs of the deceased assessee. In this regard, we refer to the decision of Delhi High Court in case of Vipin Walia vs. ITO (supra) wherein referring to the provisions of section 159 of the Act, it was held as under:

“11. Section 159(2) of the Act makes a specific reference to a reassessment proceeding under Section 147 of the Act. While Section 159(2)(a) of the Act talks of a proceeding already taken against an Assessee 'before his death'. Section 159(2)(b) of the Act envisages any proceeding which could have been taken against the

6 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur deceased if he had survived. It permits such a proceeding to be taken against the LRs of the deceased Assessee even if it had not taken while the Assessee was alive. Section 159(2)(b) is relevant as far as the present case is concerned.

“In the present case, the notice u/s 148 was addressed to an assessee who was already dead even on the date of issue of notice. The notice was issued on 28th March, 1985, while the assessee, Ganga Prasad Jaiswal had died on 20th March, 1985. The notice was not served upon the legal representatives of Ganga Prasad Jaiswai but it was served on one Keshav Ram, munim.

7 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur Even the name of the deceased assessee was not correctly mentioned in the notice. The notice was addressed to Ganga Prasad Jaiswai while the correct name of the assessee was Ganga Ram Jaiswal. The Tribunal was right in holding that the defects in the notice under s. 148 were not cured by s. 292B.”

8 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur petitioner to co-operate in the proceedings pursuant to the impugned notice. 16. The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the Revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. In my considered view, the answer to the question should be definitely against the Revenue. 17. This Court supports such a conclusion with the following reasons : Admittedly, the limitation period for issuance of notice for reopening expired on 31.3.2017. The impugned notice was issued on 30.3.2017 in the name of the dead person. On being intimated about the death, the Department sent the notice to the petitioner - his spouse to participate in the proceedings. This notice was well beyond the period of limitation, as it has been issued after 31.3.2017. If we approach the problem sans complicated facts, a notice issued beyond the period of limitation i.e. 31.3.2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. 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 PAN registration.

9 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur 18. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application. 19. The Revenue seeks to bring their case under Section 292 of the Act to state that the defect is a curable defect and on that ground, the impugned notice cannot be declared as invalid. 20. The language employed in Section 292 of the Act is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act.”

10 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur view of the above, rest all grounds taken by the assessee have become academic in nature and the same are dismissed as infructuous.”

“ 2. A notice u/s 148 of the I.T. Act, 1961 dated 14.03.2016 was issued to the assessee. In response to the same no one attended the proceedings and nor filed any return of income in response to the notice u/s 148 of the Income Tax Act. In the assessment proceedings, notice u/s 142(1) was issued on 28.10.2016 to the assessee to attend the proceedings on 09.11.2016. On 09.11.2016 no one attended the case. In this connection, a notice u/s 144 of the Income Tax Act, 1961 was issued to the assessee on the address of the assessee on 07.11.2016 with request to attend the assessment proceedings on 15.11.2016. No one attended the office or filed adjournment in response to the notices issued from time to timwe. In this connection one more notice u/s 144 of the Income tax Act was issued to the assessee on the address of the assessee with a request to attend the assessment proceedings on 30.11.2016 which is reproduced as under :”

Thus it is clear that the AO issued the notice under section 148 on 14.03.2016 whereas the assessee was already died on 25th April, 2015

11 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur as per the Death Certificate issued by the Government of Rajasthan. The AO has not mentioned anything about the service of the notice issued under section 148 in the name of the deceased assessee. Therefore, it appears that without valid notice, under section 148 as well as service and without noting the status and the reasons of non service of the said notice the AO proceeded to frame the assessment ex parte. The AO has also mentioned that the notice issued under section 142(1) as well as under section 144 of the Act and there was no response even to those notices issued by the AO. However, the AO was again silent about the service of the said notice issued by the AO. Thus it appears that the AO has proceeded to frame the ex parte assessment ignoring the fact of service of the notice as well as the death of the assessee prior to issue of the notice under section 148 of the Act. The assessee though pointed out this fact before the ld. CIT (A) and also explained that since the son of the deceased assessee was residing in USA, therefore, there was no response to the notice issued by the AO. However, the ld. CIT (A) has again dismissed the appeal of the assessee ex parte due to non appearance. The ld. A/R pointed out that since nobody from the side of the assessee was residing in India, therefore, the address of the A/R was given for the purpose of notices but the ld. CIT (A) has not issued the notice to the address given in Form No. 35. Without going into the issue of ex parte order issued by the ld. CIT (A), we note that the AO has issued the notice under section 148 in the name of the deceased assessee and, therefore, the notice issued under section 148 itself is not a valid notice. It is not a question of service of the notice but the issuance of notice under section 148 itself is invalid as the same issued and sent in the name of the deceased assessee. In case due to unawareness of death of the assessee, if the notice issued in the name of dead person is properly followed up by the AO then the AO could have issued another notice in

12 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur the name of the legal representative of the deceased assessee but without taking any steps to issue a valid and legal notice under section 148 the AO has proceeded on the basis of the invalid notice issued under section 148. Therefore, it is a jurisdictional issue as notice under section 148 gives the jurisdiction to the AO to initiate the reassessment proceedings. Once the notice itself is not valid as issued against the dead person, then the entire proceedings got vitiated. The Hon’ble Gujarat High Court in case of Durlabhbhai Kanubhai Rajpara vs. ITO, 114 taxmann.com 481 has considered this issue in para 5 to 11 as under :- ““5. Learned advocate Shri Bandish Soparkar for the petitioner submitted that the issue is no more res-integra inasmuch as this Hon'ble Court has on more than one occasion considered this issue and held that the notice under section 148 of the Act against a dead person is nullity and without jurisdiction and no proceedings can be continued pursuant to such notice. He relied upon the decision of this court in case of Chandreshbhai Jayantibhai Patel v. ITO [2019] 101 taxmann.com 362/261 Taxman 137/413 ITR 276 (Guj.) and decision in case of Rasid Lala v. ITO [2017] 77 taxmann.com 39 (Guj.) He also relied upon the decision of Madras High Court in case of Alamelu Veerapan v. ITO (order dated 7.6.2018 in Writ Petition No.30060/2017). Relying upon the judgment in case of Chandreshbhai Jayantibhai Patel (supra), he contended that this Court have dealt in detail with regard to the issue of notice under section 148 of the Act against a dead person after analysing the provisions of section 2(7), 2(29) read with sections 159 and 292B of the Act. He placed reliance on the following findings of the court in the said judgment: "16. On behalf of the revenue, it has been contended that issuance of the notice to the dead assessee is merely a technical defect which could be corrected under section 292B of the Act. Reliance has been placed on the above referred decisions of the Supreme Court as well as the High Courts for contending that the proceedings would not be null and void merely because the notice has been issued against a dead person as the legal representative had received the notice and has objected to the validity of the notice and further continuation of the proceedings. In the opinion of this court, here lies the distinction between those cases and the present case. In the relied upon cases, the legal representative, in response to the impugned notice, filed return of income and participated in the

13 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur proceeding and then raised an objection to the validity of the proceeding and, therefore, the court held that this was a case of waiver and that a technical defect can be waived; whereas in this case, right from the inception the petitioner has objected to the validity of the notice and thereafter to the continuation of the proceeding and has at no point of time participated in the proceeding by filing the income tax return in response to the notice issued under section 148 of the Act. Had the petitioner responded to the notice by filing return of income, he could have been said to have participated in the proceedings, however, merely because the petitioner has informed the Assessing Officer about the death of the assessee and asked him to drop the proceedings, it cannot, by any stretch of imagination, be construed as the petitioner having participated in the proceedings. 17. Insofar as reliance placed upon section 292B of the Act is concerned, the said section, inter alia, provides that no notice issued in pursuance of any of the provisions of the Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice if such notice, summons is in substance and effect in conformity with or according to the intent and purpose of the Act. 18. 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 Act. In this regard, it may be noted that a notice under section 148 of the Act is a jurisdictional notice, and existence of a valid notice under section 148 is a condition precedent for exercise of jurisdiction by the Assessing Officer to assess or reassess under section 147 of the Act. The want of a valid notice affects the jurisdiction of the Assessing Officer to proceed with the assessment and thus, affects the validity of the proceedings for assessment or reassessment. A notice issued under section 148 of the Act against a dead person is invalid, unless the legal representative submits to the jurisdiction of the Assessing Officer without raising any objection. Therefore, where the legal representative does not waive his right to a notice under section 148 of the Act, it cannot be said that the notice issued against the dead person is in conformity with or according to the intent and purpose of the Act which requires issuance of notice to the assessee, whereupon the Assessing Officer assumes jurisdiction under section 147 of the Act and consequently, the provisions of section 292B of the Act would not be attracted. In the opinion of this court, the decision of this court in the case of Rasid Lala v. Income Tax Officer, Ward-1(3)(6) (supra) would be

14 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur squarely applicable to the facts of the present case. Therefore, in view of the provisions of section 159(2)(b) of the Act, it is permissible for the Assessing Officer to issue a fresh notice under section 148 of the Act against the legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee. 19. In the facts of the present case, as noticed hereinabove, the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained." 6. On the other hand, learned advocate Shri Nikunt Raval with learned advocate Ms. Kalpana Raval reiterated what is stated in the orders dated 25.7.2018 and 8.8.2018 whereby the respondent has rejected the objections raised by the petitioner and held that notice under section 148 of the Act is validated as per the provisions of section 292B of the Act. He also referred to the relevant portion of the affidavit-in-reply to contend that the petitioner has never informed the respondent with regard to the demise of his father late Shri Kanubhai Nagjibhai Rajpara and names and addresses of legal representatives have never been furnished. He also submitted that the Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara remained active which indicated for the purpose of department that the taxpayer was alive. Moreover, he relied on provisions of section 159 of the Act to contend that unless information of deceased taxpayer has been provided and uploaded by the legal representatives, no action can be taken against the legal representatives and no notice can be issued against the legal representatives and, therefore, impugned notice under section 148 of the Act is validated pursuant to provisions of section 292B of the Act. It was submitted that mentioning the name of the deceased person in the notice is nothing but can only be said to be a mistake or omission and,

15 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur therefore, such notice is a valid notice under section 148 of the Act and the proceedings pursuant to such notice are valid proceedings. 7. In the present case, the assessee-petitioner has at first point of time objected to the issuance of notice under section 148 of the Act and has not participated or filed any return pursuant to notice. Therefore, legal representatives not having waived requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to impugned notice, provisions of section 292A of the Act also would not be attracted and hence notice under section 148 of the Act has to be treated as invalid. 8. The facts in the present case are identical to the case of Chandreshbhai Jayantibhai Patel (supra), as in the facts of the present case also father of the petitioner expired on 12.6.2016 and impugned notice was issued on 28.3.2018. In facts of the present case, even prior to issuance of notice, department was aware about the death of the petitioner's father since on 13.3.2018 in response to the summons issued under section 131(1A) of the Act, the petitioner had intimated to the department about the death of his father. Therefore, it cannot be said that the respondent was not aware about the death of the father of the petitioner and he could have belatedly issued notice under section 159 of the Act upon the legal representatives of late Shri Kanubhai Nagjibhai Rajpara. 9. The contention advanced by the learned senior standing counsel for the respondent that since Permanent Account Number of late Shri Kanubhai Nagjibhai Rajpara was active, it can be presumed that tax payer was alive, cannot be sustained in view of the fact that only because Permanent Account Number is active, petitioner or any assessee is not liable to file the return of income and on that basis it cannot be presumed that the assessee is alive, more particularly, when the department is made to know about the death of the assessee prior to issuance of the impugned notice. 10. In view of the aforesaid settled legal proposition that no valid notice can be issued against a dead person, the impugned notice is required to be quashed and set aside. 11. For the foregoing reasons, petition succeeds and is accordingly allowed. Resultantly, impugned notice dated 28.3.2018 issued by the respondent under section 148 of the Act as well as further proceedings thereto are quashed and set aside.”

The said decision was challenged by the revenue before the Hon’ble Supreme Court, however, the SLP filed by the revenue has been

16 ITA No. 671/JP/2019 Smt. Lalita Rawat, Jaipur Vs. ITO, Jaipur dismissed by the Hon’ble Supreme Court vide order dated 18th October, 2019 reported in 114 taxman.com. 482. Accordingly, in the facts and circumstances of the case, when the notice issued under section 148 against the deceased person as well as the assessment framed by the AO in the name of the deceased assessee then the impugned assessment order passed by the AO is invalid for want of valid notice as well as the assessment framed against the dead person. Accordingly the same is quashed.”

In the result, appeal of the assessee is allowed.

Order pronounced in the Open Court on 26/08/2020.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 26/08/2020 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Smt. Lalita Rawat, Jaipur izR;FkhZ@ The Respondent- The ITO, Ward 5(5), Jaipur 2. 3. vk;dj vk;qDr@ CIT vk;dj vk;qDr@ CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. xkMZ QkbZy@ Guard File {ITA No. 671/JP/2019} 6. vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत