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

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SCA/23110/2022HC GujaratGJHC24074792202221 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 the notices issued under the Income Tax Act to the deceased assessee, after the department was duly informed of his death and the petitioner was recognized as the legal heir, were void ab initio. The court noted that the department was aware of the death on March 29, 2019, and had approved the petitioner's request on March 30, 2019. Consequently, any notice issued subsequent to this acknowledgment and approval, particularly the show cause notice dated March 10, 2022, and the notices under Sections 148 and 142(1) for AY 2015-16, were invalid. The reasoning is that proceedings cannot continue against a dead person once the authority is aware of the death and has recognized the legal representative. The ratio decidendi is that statutory notices must be served on living individuals or their duly recognized legal representatives, and failure to do so renders the proceedings void. The court quashed and set aside the assessment order dated March 22, 2022, for AY 2015-16, and all consequential notices.

What were the facts?

The petitioner, Vinodbhai Shamjibhai Sagpariya, filed a Special Civil Application challenging notices and orders issued by the Income Tax Officer, Ward - 2 (1)(1) RKT. The primary contention is that notices were issued to the petitioner's deceased father, who passed away on August 20, 2017. The department was informed of the death on March 29, 2019, and the petitioner's request to be recognized as the legal heir with PAN AELPP3476J was allowed on March 30, 2019. Despite this, notices, including a show-cause notice dated March 10, 2022, and notices under Sections 148 and 142(1) of the Income Tax Act for Assessment Year 2015-16, continued to be issued to the deceased. These culminated in an assessment order dated March 22, 2022.

What were the issues?

1. Whether notices issued under the Income Tax Act to a deceased assessee, after the department has been duly informed of the death and the legal heir has been recognized, are void ab initio? Assessee's Contention: The learned advocate for the petitioner argued that since the department was aware of the assessee's death on August 20, 2017, and this information was communicated on March 29, 2019, with the petitioner being recognized as the legal heir on March 30, 2019, any subsequent notices issued to the deceased are void. The petitioner relied on the decisions in Kanubhai Jinabhai Patel vs. Income-tax Officer ([2022] 139 taxmann.com 580 (Guj.)) and Savita Kapila vs. Assistant Commissioner ([2020] 118 taxmann.com 46 (Delhi)). Revenue's Contention: The learned senior standing counsel for the revenue did not dispute the fact that the department had been communicated of the death well in time on March 29, 2019, and had granted its approval on March 30, 2019.

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/23110/2022 ORDER DATED: 21/12/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 23110 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’, ‘D2’, ‘D3’, ‘D4’, ‘D5’', ‘D6’ to this Petition; (b) pending the admission, hearing and final disposal of this petition, to stay implementation Page 1 of 5

C/SCA/23110/2022 ORDER DATED: 21/12/2022 and operation of the orders at Annexure C to this petition and stay further proceedings of recovery for A.Y. 2015-16; (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, Mr.Fenil Mehta for the petitioner, who has drawn the attention of this Court that the Page 2 of 5

C/SCA/23110/2022 ORDER DATED: 21/12/2022 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 taxmann.com 46 (Delhi). Page 3 of 5

C/SCA/23110/2022 ORDER DATED: 21/12/2022 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. 5. We notice that two notices under Sections 148 and 142(1) of the IT Act and Page 4 of 5

C/SCA/23110/2022 ORDER DATED: 21/12/2022 the final show cause notices for the assessment year 2015-16 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

2015-16

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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