SANDEEP SHARMA vs. OFFICE OF THE INCOME TAX DEPARTMENT

Facts

The petitioner, Sandeep Sharma, is the legal heir of the deceased, Sunita Sharma. The Income Tax Department (ITO Ward 6(3), Jaipur) and the Central Board of Direct Taxes are the respondents. The writ petition challenges proceedings initiated under Section 148A of the Income Tax Act, 1961, where notices were initially issued against the deceased assessee, Sunita Sharma. This matter was brought before the High Court of Judicature for Rajasthan, Bench at Jaipur. The procedural history involves the issuance of notices under Section 148A(b) and the subsequent passing of an order under Section 148A(d). The core issue is the validity of these proceedings initiated against a deceased person.

Held

The Tribunal held that proceedings initiated under Section 148A of the Income Tax Act, 1961, by issuing notices against a deceased person are a nullity. This legal position is no longer res integra, having been decided by previous Division Bench orders of the same Court. Specifically, the Court referred to its decisions in Shri Radha Mohan Khandelwal Vs. Assistant Commissioner of Income Tax and Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income tax Officers & Ors. The reasoning is that notices and proceedings against a dead person are fundamentally flawed. The Court granted liberty to the Department to re-initiate proceedings under Section 148A(b) and Section 159 of the IT Act. The limitation period between the filing of the writ petition and its disposal was to be excluded for computing the limitation period for such re-initiated proceedings. The writ petition was allowed on these terms, permitting the Department to proceed in accordance with law against the legal representatives.

Key Issues

1. Whether proceedings initiated under Section 148A of the Income Tax Act, 1961, by issuing notices under Clause (b) thereof, culminating in an order under Clause (d), are a nullity when the notices were initially issued against a deceased person? (Question of law, turning on Section 148A and Section 159 of the Income Tax Act, 1961). Assessee's Contention: The petitioner, as the legal heir, implicitly argues that the proceedings initiated against a dead person are a nullity. The judgment refers to prior decisions supporting this stance. Revenue's Contention: The judgment notes that parties are in agreement on the issue. The revenue, by agreeing to re-initiate proceedings, implicitly accepts the nullity of the initial notices against the deceased. The judgment mentions the liberty granted to the department to re-initiate proceedings under Section 148A(b) and Section 159 of the IT Act, implying the revenue's willingness to follow the correct procedure.