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Facts
The assessee's appeal is against an order related to a reassessment proceeding initiated under Section 147 of the Income Tax Act, 1961. A notice under Section 148 was issued in the name of the deceased assessee, Mahender Singh, and not his legal heir, Amit Singh, who is the appellant.
Held
The Tribunal held that the mandatory requirement of serving notice under Section 148 of the Act on the legal heir is crucial for assuming jurisdiction in a reassessment proceeding. Issuance of notice in the name of a deceased assessee is not sufficient.
Key Issues
Whether a reassessment proceeding initiated by issuing notice under Section 148 in the name of a deceased assessee, without issuing it to the legal heir, is valid and confers jurisdiction on the Assessing Officer.
Sections Cited
147, 148, 144, 159
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Income Tax Appellate Tribunal, “SMC” BENCH, DELHI
Before: MS. MADHUMITA ROY
The instant appeal filed by the assessee is directed against the order dated 19.11.2024 passed by the Ld. NFAC, Delhi, arising out of the Assessment Order dated 20.12.2019 passed by the ITO, Ward 2(1)(4) Ghaziabad, under Section 144 read with 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') for Assessment Year 2012-13.
Amit Singh Legal heir of Sh. Mahender Singh (AY: 2012-13)
In this case notice under Section 148 in the name of the deceased Mahender Singh was issued; one dated 29.03.2019 by the ITO, Ward 2(1)(4) Ghaziabad; and the other dated 31.03.2019 issued by the Circle 2(1)(1) Ghaziabad. Furthermore, not notice under Section 148 has ever been issued on the legal heir of the assessee namely Amit Singh, assessee before us which has not been controverted by the Ld. DR.
It is the case of the assessee before us that once the assessee died on 24.03.2012 as it is also evident from the death certificate copy whereof has duly been submitted before the Bench the legal heir is required to be identified and in order to assume jurisdiction under Section 147 of the Act by ITO in reassessment proceeding against the original assessee. If it is not done the entire proceeding is vitiated and therefore, liable to be quashed.
On the other hand, Ld. DR relied upon the judgment passed by the Hon’bler Madhya Pradesh High Court in the case of Smt. Kaushalyabai Vs. CIT, reported in (1999) 238 ITR 1008 (MP) wherein it has been held that once the legal heir of the assessee participated in the proceeding the notice though issued in the name of the original assessee since deceased the same could not be treated to be a procedural irregularity or nullity rather the same become academic since window of the deceased has already participated in the proceeding and therefore, the defect, if any stand automatically cured.
On the other hand, the judgment passed by the Madras High Court in the case of Alamelu Veerappan Vs. ITO, reported in (2018) (6) TMI 760 wherein it has been held that even if the legal heir of the assessee participated in the proceeding the defect of non-issuance of notice under Amit Singh Legal heir of Sh. Mahender Singh (AY: 2012-13)
Section 148 of the Act cannot be said to be cured neither it is obligation on the part of the legal heir of the original assessee to bring it to the notice of the Ld. AO of the fact of death of the original assessee. The Ld. AR in support of his submission further relied upon the judgment passed by the Bombay High Court in the case of Devendra Vs. Addl. CIT, reported in 461 ITR 463 (Bom) wherein it has been held that the original assessee Shri Vasudeo Jambhulkar has died on 08.07.2020 the notice under Section 148 of the Act issued in the name of such dead person is not enforceable in the eye of law. He has further relied upon the judgment passed by the Hon’ble Delhi High Court in the case of Savita Kapila Vs. ACIT, reported in 426 ITR 502 (Del) (2020) wherein it has been held that the legal heir are under no statutory obligation to intimate the death of the assessee to the revenue. Further that, the judgment passed by the Hon’ble Madras High Court in the case of Alamelu Veerappan Vs. ITO, reported in (2018) (6) TMI 760 wherein it has been held that requirement of issuing of notice in the name of correct person is foundational requirement to acquire jurisdiction to reopen the assessment. It is evident from the provision of Section 148 of the Act that before the proceeding can be taken up for reassessment, a notice must be served upon the assessee; the notice must be sent to a living person i.e. legal heir of the deceased.
In the case in hand a notice under Section 159 was issued by the ITO on the legal heir i.e. Amit Singh the assessee before us. However, the same is not supported by any further notice issued under Section 148 of the Act which could justify assumption of jurisdiction on the part of the Ld. AO for initiating reassessment proceeding and continuation thereof culminating in addition made in the hands of the assessee. Thus, having Amit Singh Legal heir of Sh. Mahender Singh (AY: 2012-13) regard to the judgments as discussed hereinabove this Bench is of the considered view that the mandatory requirement of service of notice under Section 148 of the Act on the legal heir of the assessee since missing the assessment on the basis of issuance of notice under Section 148 of the Act admittedly in the name of the deceased assessee is not sufficient enough to justify the assessment or assumption of jurisdiction and hence the entire proceeding is vitiated, is liable to be quashed. With the aforesaid observation the reassessment proceeding as challenged before us is quashed.
The appeal of the assessee is allowed.
Order pronounced in the open court on 17.07.2025