BIPINBHAI BACHUBHAI KATARIA L/R OF LATE BACHUBHAI RAMBHAI KATARIA vs. INCOME TAX OFFICER

Facts

The petitioner, as the legal heir of late Bachubhai Rambhai Kataria, challenged a notice dated March 26, 2019, issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer. This notice proposed to reopen the completed assessment for Assessment Year 2012-13. The petitioner contended that the notice was issued to a dead person, as Bachubhai Rambhai Kataria had passed away on October 7, 2013. The petitioner had previously informed the department of the assessee's death and submitted relevant documents. Despite this, the department intended to proceed. The petitioner argued that they had not submitted to the Assessing Officer's jurisdiction. The Revenue, while acknowledging the notice was issued to a deceased person, argued that Section 292B and Section 159(2)(b) and 159(3) of the Act rendered the notice valid, as the legal representative was deemed the assessee and had knowledge of the proceedings.

Held

The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, to a dead person is invalid. The Court distinguished the present case from those where the legal representative participated in proceedings and waived the defect. In this case, the petitioner had objected to the validity of the notice from the outset and had not participated in the assessment proceedings by filing a return. The Court found that Section 292B of the Act would not be attracted because a notice under Section 148 is a jurisdictional notice, and its absence or invalidity affects the Assessing Officer's jurisdiction to proceed under Section 147. A notice issued to a dead person is invalid unless the legal representative submits to jurisdiction without objection. Since the petitioner did not waive this right, the notice was deemed invalid. The Court ruled that the Assessing Officer could issue a fresh notice to the legal representative, if not barred by limitation, but could not continue proceedings based on the invalid notice. Consequently, the impugned notice and all proceedings pursuant thereto were quashed and set aside.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person, without impleading the legal representative, is a valid notice for reopening assessment? (Question of law) Assessee's contention: The notice is invalid because it was issued to a dead person. The petitioner has not submitted to the jurisdiction of the Assessing Officer and has objected to the validity of the notice from the inception. Reliance was placed on the Gujarat High Court's decision in Chandreshbhai Jayantibhai Patel vs. Income-tax Officer. Revenue's contention: The notice is not a nullity due to a mistake or defect, as per Section 292B of the Act. The legal representative is deemed to be the assessee under Section 159(2)(b) and 159(3) of the Act, and since the legal representative had knowledge of the proceedings and objected to the notice, the defect is curable. Reliance was placed on Supreme Court and High Court decisions, including Girijanandini Devi v. Bijendra Narain Choudhary and Alamelu Veerappan v. Income Tax Officer.