DURLABHAI KANUBHAI RAJPARA vs. INCOME TAX OFFICER WARD 1(3)(7), SURAT

Facts

The petitioner, Durlabhbhai Kanubhai Rajpara, challenged a notice dated March 28, 2018, issued under Section 148 of the Income Tax Act, 1961, for reassessment for the Assessment Year 2011-2012. The notice was issued in the name of his father, Kanubhai Nagjibhai Rajpara, who had expired on June 12, 2015. The petitioner had previously informed the department of his father's death on March 13, 2018, in response to a summons issued under Section 131(1A). The Assessing Officer rejected the petitioner's objections, contending that the notice was valid under Section 292B of the Act as the deceased's PAN remained active and no formal intimation of death was provided to the jurisdictional Assessing Officer. The petitioner then filed the present Special Civil Application.

Held

The High Court held that a notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person is a jurisdictional notice and is invalid. The Court found that in the present case, the legal representative (the petitioner) had raised an objection to the validity of the notice upon receiving it and had not complied with it. Therefore, the legal representative had not waived the requirement of a valid notice under Section 148 nor submitted to the Assessing Officer's jurisdiction pursuant to the impugned notice. Consequently, the provisions of Section 292B of the Act were not attracted. The Court reasoned that in the absence of a valid notice, the Assessing Officer lacks the authority to assume jurisdiction under Section 147, rendering the continuation of proceedings invalid. The Court also noted that the department was aware of the deceased's death prior to the issuance of the notice, as indicated by the intimation provided on March 13, 2018. The contention that an active PAN implies the assessee is alive was rejected. The Court quashed and set aside the impugned notice and all further proceedings.

Key Issues

1. Whether a notice issued under Section 148 of the Income Tax Act, 1961, against a deceased person is a nullity and without jurisdiction, or can it be validated under Section 292B of the Act? Assessee's Arguments: The petitioner argued that a notice issued under Section 148 to a dead person is a nullity and without jurisdiction, citing decisions of the Gujarat High Court in Chandreshbhai Jayantibhai Patel v. ITO and Rasid Lala v. Income-tax Officer, Ward-1(3)(6), and a Madras High Court decision in Alamelu Veerapan v. The Income Tax Officer. The petitioner emphasized that the court in Chandreshbhai Jayantibhai Patel had analyzed Sections 2(7), 2(29), 159, and 292B and held such notices to be invalid when the legal representative objects and does not submit to jurisdiction. Revenue's Arguments: The revenue contended that the notice was valid under Section 292B of the Act. They argued that the petitioner never formally informed the jurisdictional Assessing Officer about the death, the deceased's PAN remained active, and the system did not allow entry of another person's name under Section 159. The revenue asserted that the mention of the deceased's name was a mere mistake or omission, and the notice should be read with the petitioner's name as the legal representative.