URMILABEN ANIRUDHHASINHJI JADEJA vs. INCOME TAX OFFICER, WARD 7(1)(3)

Facts

The petitioner, Urmilaben Aniruddhasinhji Jadeja, filed a writ-application challenging a notice dated March 28, 2018, issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Ward 7(1)(3), for the Assessment Year 2011-12. The original assessee, Anirudhhasinhji Mohobattsinhji Jadeja (husband of the petitioner), passed away on September 27, 2016. The notice was issued via email to the assessee's Chartered Accountant. The petitioner, through her Chartered Accountant, informed the respondent about the assessee's demise. The respondent then requested the legal heir to file a return. The petitioner objected, stating the notice was invalid as it was issued to a deceased person. The respondent subsequently issued a notice under Section 142(1) and disposed of the objections, holding the reopening valid. Reasons for reopening, citing an alleged escaped income of Rs. 28,00,000/- from plot booking, were provided later.

Held

The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, dated March 28, 2018, is invalid and liable to be quashed. The Court reasoned that issuing a notice to a deceased person is a fundamental defect, akin to passing a decree against a dead person, rendering it a nullity. Unlike cases where a legal heir actively participates in the proceedings after receiving a notice (even if issued to a deceased person) and thereby submits to the Assessing Officer's jurisdiction, in this case, the petitioner merely informed the respondent about the death and objected to the notice. The Court distinguished the present case from the precedents cited by the revenue ('Travels', 'Smt. Kaushalyabai', 'Sri Durga Enterprises'), noting that in those cases, there was either participation in proceedings or the defect was a mere irregularity curable under Section 292B, which is not applicable to a notice issued to a dead person. The Court concluded that the proceedings were not tenable in law. The impugned notice was quashed, and all consequential proceedings were terminated.

Key Issues

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated March 28, 2018, is invalid and liable to be quashed as it was issued in the name of a deceased person (Anirudhhasinhji Mohobattsinhji Jadeja) who had passed away prior to the issuance of the notice. Assessee's Contention: The primary contention is that a notice issued to a dead person is a nullity and therefore invalid. The petitioner brought the death of the assessee to the respondent's notice immediately. Participation in proceedings by the legal heir was under protest and without knowledge of the reasons for reopening, and the objection to the invalid notice was not properly addressed. Revenue's Contention: The revenue relied on Section 149(2)(b) of the Act, which allows proceedings against legal representatives, and cited decisions in 'Travels', 'Smt. Kaushalyabai', and 'Sri Durga Enterprises' to argue that procedural defects can be cured, especially when the assessee or legal heir participates in the proceedings, thereby submitting to the jurisdiction. The revenue implied that the notice was not a nullity and could be treated as valid or curable.