PRAKASH TATOBA TORASKAR vs. THE INCOME TAX OFFICER 26 (1)(1) MUMBAI AND 3 ORS.

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WP/4871/2022HC Bombay10 February 2023Bench: HON'BLE SHRI JUSTICE DHIRAJ SINGH THAKUR HON'BLE JUSTICE KAMAL KHATA5 pages
AI SummaryAllowed

What did the High Court hold?

The Bombay High Court allowed the writ petition, setting aside the notices issued under Section 148 of the Income Tax Act, 1961, dated June 30, 2021, and June 20, 2022, and the order under Section 148A(d) dated June 30, 2022. The Court reasoned that it is settled law that a notice issued under Section 148 of the Act against a dead person is invalid, unless the legal representatives submit to the jurisdiction of the Assessing Officer without raising any objection. In this case, the legal heir had objected and provided proof of death. The Court relied on the principle established in cases like Income Tax Ward 1(3)(7), Surat Vs. Durlabhbhai Kanubhai Rajpara. The operative direction was the setting aside of the impugned notices and order.

What were the facts?

The petitioner, as the legal heir of Prakash Tatoba Toraskar, challenged notices issued under Section 148 of the Income Tax Act, 1961, dated June 30, 2021, and June 20, 2022, along with an order under Section 148A(d) dated June 30, 2022. The core issue is that reassessment proceedings were initiated against the deceased assessee, Prakash Tatoba Toraskar, who passed away on November 4, 2019. The respondents issued a Section 148 notice in the deceased's name. Subsequently, in purported compliance with the Apex Court's judgment in Union of India Vs. Ashish Agarwal, the respondents treated the earlier notice as a Section 148A(b) notice and sought a reply. The petitioner, as the legal heir, responded, informing the authorities of the assessee's death and providing a death certificate. Despite this, an order under Section 148A(d) was passed.

What were the issues?

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, dated June 30, 2021, and June 20, 2022, and the order under Section 148A(d) dated June 30, 2022, are invalid on the ground that reassessment proceedings were initiated against a dead person? Assessee's Contention: The assessee argued that all notices and the subsequent order were issued against a deceased individual, rendering the entire reassessment process void ab initio. The legal heir duly informed the authorities of the death and provided the death certificate, and did not consent to participate in proceedings initiated against a dead person. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the validity of the notices issued against a dead person. It notes that the respondents acted in purported compliance with the judgment of the Apex Court in Union of India Vs. Ashish Agarwal.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

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WP 7871-22.doc Chittewan IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO.4871 OF 2022

Prakash Tatoba Toraskar Through Legal Heir Kiran Toraskar 815, Adarsh Nagar, New Link Road, Opp. Lokhandwala Complex, Andheri (West), Mumbai-400 058 Maharashtra PAN : AAAPT6197R … Petitioner Versus 1. The Income-tax Offcer 24(3)(1) Mumbai, having his offce at Room No.303, 3rd Floor, Kautiya Bhavan, C-41 to C-43, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400 051. 2. Principal Commissioner of Income Tax- 20, Mumbai having his offce at Aayakar Bhavan, M.K. Road, Chuchgate, Mumbai-400 020 3. National Faceless Assessment Centre, having its offce at National e-Assessment Centre, Delhi 4. The Union of India Through the Secretary, having offce at Aayakar Bhavan, M.K. Road, Churchgate, Mumbai-400 020 … Respondents ***

Mr. Yahya Ghoghari a/w Mr. Mustafa Shabbir Shamim i/b Shamaim & Co. for the Petitioner. Mr. Suresh Kumar for the Respondents. *** CORAM : DHIRAJ SINGH THAKUR & KAMAL KHATA, JJ.

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WP 7871-22.doc Chittewan RESERVED ON : 20 JANUARY 2023 PRONOUNCED ON : 10 FEBRUARY 2023 O R D E R

Per DHIRAJ SINGH THAKUR, J. . The Petitioner challenges notices issued under Section 148 of the Income Tax Act, 1961 (“the Act”) dated 30 June 2021 and 20 June 2022 and the Order under Section 148A(d) dated 30 June 2022 on the ground that the the re-assessment proceedings have been initiated against a dead person. 2 It is stated that the Respondents have issued a notice under Section 148 dated 30 June 2021, in the name of the father of the Petitioner, namely, Prakash Tatoba Toraskar, who had already expired on 4 November 2019. The death certifcate issued by Municipal Corporation of Greater Mumbai is also placed on record to support this fact. It is stated that the said notice had not been challenged in any writ proceedings before the Court and ordinarily the matter should have rested there. However, pursuant to the judgment of the Apex Court in the case of Union of India Vs. Ashish Agarwal1, the Respondents then vide communication dated 20 May 2022 acting in purported compliance of the said judgment treated the earlier notice issued under Section 148 of the Act to be a notice 1 2022 SCC Online SC 543

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WP 7871-22.doc Chittewan under Section 148A(b) provided information to the deceased Prakash Tatoba Toraskar and sought reply thereto, so that necessary Order in terms of Section 148A(d) could be passed. Since Prakash Tatoba Toraskar had already expired, his legal heir Kiran Toraskar submitted a response informing the assessing offcer about the factum of death of the assessee. A copy of the death certifcate was also furnished along with the response. It is also not out of place to mention that since the communication dated 20 May 2022 purporting to be a notice under Section 148A(b) had been addressed in the name of the deceased, the legal heir of the deceased, therefore, did not consent to participate in the assessment proceedings. 3 Not withstanding the above mentioned objection having been taken by the legal heir of the deceased, an Order under Section 148A(d) came to be passed on 30 June 2022. From the facts as they emerge from the record, thus, make it clear that initial notice under Section 148 was in the name of the deceased and so was the subsequent communication dated 20 May 2022 purporting to be a notice in terms of Section 148A(b), it is settled law that notice issued under Section 148 of the Act against a dead person would be invalid, unless the legal representatives submit to the jurisdiction of

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WP 7871-22.doc Chittewan the Assessing Offcer without raising any objection. Reference in this regard can be made in the case of Income Tax Ward 1(3)(7), Surat Vs. Durlabhbhai Kanubhai Rajpara2. 4 Be that as it may, the Petition is allowed. Notices issued under Section 148 of the Income Tax Act, 1961 (“the Act”) dated 30 June 2021 and 20 June 2022 and the Order under Section 148A(d) dated 30 June 2022 are set aside. (KAMAL KHATA, J.) (DHIRAJ SINGH THAKUR, J.) 2 [2020} 114 taxman.com 482 (SC)

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WP 7871-22.doc Chittewan

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