HETAL BRIJESH UKANI vs. ASST. COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1)

Facts

The petitioner, Smt. Hetal Brijeshkumar Ukani, challenged a notice dated 29.03.2018 issued by the Assistant Commissioner of Income Tax under Section 148 of the Income-tax Act, 1961, to reopen the assessment of her deceased husband, Shri Brijeshkumar Parsottambhai Ukani, for assessment year 2011-12. The assessee had passed away on 23.01.2011. The notice was issued in the name of the deceased and was allegedly not served on the petitioner. Subsequently, a notice dated 10.09.2018 was issued to the petitioner, to which she raised objections, stating the notice under Section 148 was not received and was issued to a deceased person, rendering it invalid. The Assessing Officer disposed of these objections by an order dated 03.10.2018, holding the reopening to be valid.

Held

The High Court held that the notice under Section 148 of the Income-tax Act, 1961, issued to the deceased assessee, Shri Brijeshkumar Parsottambhai Ukani, was invalid and lacked jurisdiction. The Court reasoned that a notice under Section 148 is a jurisdictional notice, and its validity is a condition precedent for the Assessing Officer to exercise jurisdiction under Section 147. A notice issued to a dead person is invalid unless the legal representative submits to the jurisdiction without objection. In this case, the legal representative (petitioner) raised an objection to the validity of the notice and did not waive her right to a notice under Section 148. Therefore, the provisions of Section 292B of the Act, which deal with the validity of notices despite minor defects, were not attracted. The Court referred to its own decision in Rasid Lala v. Income Tax Officer, Ward-1(3)(6) (supra) as squarely applicable. The Court concluded that while it is permissible to issue a fresh notice under Section 148 to the legal representative (provided it is not barred by limitation), proceedings cannot be continued based on an invalid notice issued to the deceased. Consequently, the impugned notice and all proceedings pursuant thereto were quashed and set aside.

Key Issues

1. Whether a notice under Section 148 of the Income-tax Act, 1961, issued in the name of a deceased person, is valid in law, particularly when the legal representative has raised objections regarding its issuance and validity? (Question of law) Assessee's Contentions: - The notice under Section 148 was issued to a dead person, making it invalid. The Assessing Officer's finding that no intimation of death was received was contrary to the record, as a previous notice for AY 2008-09 was issued to the petitioner as the legal heir. - As per Section 159(2)(b) of the Act, proceedings can be taken against the legal representative, but the respondent initiated proceedings against the deceased, not the legal representative, making the initiation untenable. - The notice being issued to a dead person is no notice in the eyes of law and should be quashed. - Relied on the Gujarat High Court decision in Chandreshbhai Jayantibhai Patel v. The Income Tax Officer, holding that a Section 148 notice is jurisdictional and invalid if issued to a dead person. Revenue's Contentions: - Before issuing the Section 148 notice, a notice under Section 133(6) was issued on 07.03.2018, to which there was no response. - The petitioner did not comply with the Section 133(6) notice or file a return in response to the Section 148 notice. - All communications were sent to the same address, and therefore, it cannot be believed that the Section 148 notice was not received by the petitioner. - Relied on the Delhi High Court decision in Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, for the proposition that a notice issued to a deceased person can be validated if the legal representative participates in the proceedings without objection.