LATE SMT. MRIDULA SHARMA WIFE OF LATE SHRI RAM KISHAN SHARMA vs. THE INCOME TAX OFFICER

Facts

The petitioner, represented by their legal representative, filed a writ petition challenging a notice dated March 29, 2018, issued under Section 148 of the Income Tax Act, and subsequent proceedings that resulted in a demand. The core issue was that these proceedings were initiated against a deceased person, Late Smt. Mridula Sharma. The respondent Income Tax Officer acknowledged that the matter was settled by a previous Division Bench judgment of the same court. It was not disputed that notices, proceedings, and orders were issued against a deceased individual.

Held

The High Court held that all proceedings initiated against a dead person are a nullity and therefore void. The Court found it undisputed that notices, proceedings, and orders were issued against a deceased individual. Consequently, the writ petition was allowed, and the notices and proceedings initiated against the deceased were declared nullities. However, recognizing that the initial notice was issued within the period of limitation, the Court granted liberty to the Income Tax Department to initiate fresh proceedings against the legal representative in accordance with the law, specifically referencing Section 159 of the Income Tax Act. The Court also noted that if fresh notices are issued, the petitioner would be free to raise all available legal objections.

Key Issues

1. Whether notices issued under Section 148 of the Income Tax Act and subsequent proceedings initiated against a deceased person are null and void. (Question of law) Assessee's Contention: The petitioner argued that proceedings initiated against a deceased person are invalid and should be quashed. They relied on the principle that legal actions must be taken against living individuals or their legal representatives. Revenue's Contention: The respondent contended that the issue is no longer res integra, citing a Division Bench judgment of the High Court. They argued that while proceedings against a deceased person might be a nullity, the department should be permitted to proceed against the legal heirs, especially if the initial notice was within the limitation period, as per Section 159 of the Income Tax Act.