PRANAV RAVINDRABHAI SHAH vs. INCOME TAX OFFICER, WARD 3 (3)(5)

Facts

The petitioner, Pranav Ravinndrabhai Shah, is the legal heir of the deceased assessee, late Vidhi Pranav Shah. The Income Tax Officer, Ward 3(3)(5), issued a notice dated March 31, 2019, under Section 148 of the Income Tax Act, 1961, alleging that income for Assessment Year 2012-13 had escaped assessment. The notice was issued to the deceased assessee. The petitioner, as the legal heir, raised objections on June 13, 2017, stating that the assessee had expired on October 14, 2016, and therefore, reassessment proceedings could not be initiated against a dead person. The Assessing Officer disposed of these objections by an order dated July 2, 2019. The petitioner filed a writ petition challenging the Section 148 notice and the order disposing of objections.

Held

The Tribunal held that a notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person is invalid, and Section 292B of the Act would not be attracted if the legal representative does not waive their right to a notice or submit to the Assessing Officer's jurisdiction. The Court distinguished the present case from others where legal representatives had participated in proceedings and then raised objections, deeming that as a waiver. In this case, the petitioner had objected to the validity of the notice from the outset and had not participated in the reassessment proceedings by filing a return. The Court found that issuing a notice to a dead person is not in conformity with the intent and purpose of the Act, which requires notice to the assessee for the Assessing Officer to assume jurisdiction under Section 147. Therefore, the notice was treated as invalid, and the Assessing Officer lacked the authority to proceed. The Court allowed the writ petition, quashing the impugned notice and all subsequent proceedings. The Assessing Officer was permitted to issue a fresh notice under Section 148 to the legal representative, provided it was not barred by limitation.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person, instead of their legal representative, is a valid notice, particularly in light of Section 292B and Section 159(2)(b) and (3) of the Act? The assessee argued that a notice issued to a dead person is invalid and reassessment proceedings cannot be initiated against a deceased individual. Reliance was placed on the Gujarat High Court's decision in Chandreshbhai Jayantibhai Patel vs. Income-tax Officer. The assessee contended that since the notice was invalid from inception and they had objected to it immediately, there was no waiver of the defect. The revenue argued that Section 292B of the Act renders a notice valid despite minor defects or omissions if it is in substance and effect in conformity with the intent and purpose of the Act. They also relied on Section 159(2)(b) and (3) of the Act, which deem the legal representative to be the assessee for all practical purposes, suggesting that a notice to the deceased could be considered valid if the legal representative was aware and responded. The revenue contended that the petitioner's objection and response constituted participation, curing the defect.