VINODBHAI SHAMJIBHAI SAGPARIYA vs. INCOME TAX OFFICER WARD - 2 (1)(1) RKT

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SCA/23111/2022HC GujaratGJHC24074793202221 December 2022Bench: HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI,HONOURABLE MRS. JUSTICE MAUNA M. BHATT5 pages
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What did the High Court hold?

The High Court held that notices issued to a deceased assessee, subsequent to the department being informed of the death and recognizing the legal heir, are void ab initio. The court noted that the department was communicated of the death on March 29, 2019, and the legal heir's request was approved on March 30, 2019. However, a show cause notice was issued on March 10, 2022, to the deceased father who had passed away on August 20, 2017. The court found that any notice issued after the respondent acknowledged the death and approved the legal heir's request was invalid. Consequently, the assessment order dated March 22, 2022, for Assessment Year 2014-15, and all consequential notices were quashed and set aside. The ratio decidendi is that proceedings initiated against a deceased person without proper substitution of legal heirs, after due intimation, are fundamentally flawed and unsustainable.

What were the facts?

The petitioner, Vinodbhai Shamjibhai Sagpariya, filed a Special Civil Application before the Gujarat High Court challenging notices and orders issued by the Income Tax Officer, Ward - 2(1)(1) RKT. The core issue is that the notices were issued to the petitioner's deceased father, who passed away on August 20, 2017. The petitioner communicated this death to the department on March 29, 2019, and his request to be recognized as the legal heir with his PAN was allowed on March 30, 2019. Despite this, the respondent authority continued to issue notices to the deceased. The petition sought to quash these notices and orders, stay recovery proceedings for Assessment Year 2014-15, and grant other reliefs.

What were the issues?

1. Whether notices and orders issued to a deceased assessee, after the department has been duly informed of the death and the legal heir has been recognized, are valid in law? (Question of law, turning on principles of natural justice and procedural validity under the Income Tax Act). Assessee's Contention: The petitioner argued that any notice issued to a deceased person after the department was aware of the death and had acknowledged the legal heir is void ab initio. The petitioner relied on the decisions in Kanubhai Jinabhai Patel vs. Income-tax Officer and Savita Kapila vs. Assistant Commissioner. Revenue's Contention: The revenue, represented by learned senior standing counsel, did not dispute the fact that the department was communicated about the death well in time and had granted its approval.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1)

AI-generated summary — verify with the full judgment below

C/SCA/23111/2022 ORDER DATED: 21/12/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 23111 of 2022 ========================================================== VINODBHAI SHAMJIBHAI SAGPARIYA Versus INCOME TAX OFFICER WARD - 2 (1)(1) RKT ========================================================== Appearance: MR FENIL H MEHTA(11663) for the Petitioner(s) No. 1 MR NIKUNT RAVAL(1046) ASSISTED BY MR KARAN SHANGANI for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MRS. JUSTICE MAUNA M. BHATT

Date : 21/12/2022

ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. The action of the respondent since has aggrieved the petitioner, it has approached this Court by way of the present petition where this Court while issuing the notice on 22.11.2022 passed the following order: “1. Present petition is filed under Article 226 of the Constitution of India seeking following reliefs: “(a) quash and set aside the impugned notices and orders at Annexure- 'A', 'B1’, ‘B2;’, 'C', 'D1’, Page 1 of 5

C/SCA/23111/2022 ORDER DATED: 21/12/2022 ‘D2’, ‘D3’, ‘D4’, ‘D5’', ‘D6’ to this Petition; (b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the orders at Annexure C to this petition and stay further proceedings of recovery for A.Y. 2014-15; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition.” 2. It is the case of the petitioner that the notice is issued to the deceased, who passed away on 20.08.2017. 3. Notice for final disposal, returnable on 13.12.2022. 4. By way of interim relief, it is directed that the process of assessment shall continue with the cooperation of the petitioner, however, the final assessment order shall not be passed before the returnable date. 5. Over and above the regular mode of service, service of notice through e-mode on the official e-mail ID is permitted.” 2. We have heard the learned advocate, Page 2 of 5

C/SCA/23111/2022 ORDER DATED: 21/12/2022 Mr.Fenil Mehta for the petitioner, who has drawn the attention of this Court that the death of the father of the petitioner had been communicated to the department on 29.03.2019, the death had occurred on 20.08.2017. It was a request to allow him to be a legal heir with PAN No.AELPP3476J. The said request had also been allowed on 30.03.2019 and yet the authority concerned had continued to issue the notice upon the death person. 2.1 He has also relied on the decision of this Court in case of Kanubhai Jinabhai Patel vs. Income-tax Officer, reported in [2022] 139 taxmann.com 580 (Guj.) and also on the decision of the Delhi High Court in case of Savita Kapila vs. Assistant Commissioner, reported in [2020] 118 Page 3 of 5

C/SCA/23111/2022 ORDER DATED: 21/12/2022 taxmann.com 46 (Delhi). 3. Learned senior standing counsel, Mr.Raval assisted by the learned advocate, Mr.Karan Sanghani does not dispute the fact of the department having been communicated this well in time on 29.03.2019 and granted its approval of 30.03.2019. 4. The show cause notice has been issued on 10.03.2022 and the father of petitioner (since deceased) had passed away on 20.08.2017, the intimation had already been sent on 29.03.2019 and therefore, any notice subsequent thereto after the respondent had acknowledged the same and had approved the request on 30.03.2019 is void ab initio and hence, the petition deserves to be allowed. Page 4 of 5

C/SCA/23111/2022 ORDER DATED: 21/12/2022 5. We notice that two notices under Sections 148 and 142(1) of the IT Act and the final show cause notices for the assessment year 2014-15 had been issued, which all culminated into the passing of an assessment order, which is impugned in the present petition. 6. Resultantly, this petition is allowed quashing and setting aside the order of assessment dated 22.03.2022 for the assessment

year

2014-15

and

all consequential notices. 7. Over and above the regular mode of service, direct service through e-mode on official email address is also permitted. (SONIA GOKANI, J) (MAUNA M. BHATT,J) M.M.MIRZA Page 5 of 5

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