LEGAL HEIRS OF SMT. SNEH LATA BHANDARI vs. INCOME TAX OFFICER

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CW/9985/2023HC RajasthanRJHC01048469202327 February 2024Author: PUSHPENDRA SINGH BHATI,MUNNURI LAXMAN7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that while proceedings under the liability created against the legal representatives of a deceased assessee can be initiated, this can only be done after strict compliance with the mandatory provisions of Section 148A(b) of the Income Tax Act, 1961. The Court noted that it was evident from the record that the provision of Section 148A(b) had not been complied with against the legal representatives of the deceased Smt. Sneh Lata Bhandari. Consequently, the impugned notice dated April 21, 2023, under Section 148A and the order dated April 21, 2023, passed under Section 148A(d) were quashed and set aside. However, the respondents were granted liberty to reinitiate proceedings against the legal representatives, strictly adhering to the provisions of Section 148A(b) and Section 159 of the Act. The limitation period between the filing of the writ petition and its disposal was excluded for computing the limitation for initiating such proceedings.

What were the facts?

The petitioners are the legal heirs of the deceased assessee, Smt. Sneh Lata Bhandari, who passed away on May 16, 2018. The Income Tax Officer issued a show cause notice under Section 148A(b) of the Income Tax Act, 1961, to the deceased assessee on March 30, 2023. Subsequently, a notice under Section 148A was issued on April 21, 2023, and an order under Section 148A(d) was passed on the same date. The petitioners challenged these notices and the consequential proceedings before the Rajasthan High Court at Jodhpur, seeking their quashing and setting aside.

What were the issues?

1. Whether a show cause notice under Section 148A(b) of the Income Tax Act, 1961, can be validly issued to a deceased assessee, and if not, whether subsequent proceedings are vitiated. Assessee's Contention: The petitioners argued that the show cause notice could not have been issued to a dead person. They contended that by the time the order was passed, the legal representatives were on record, and the mandatory provisions of Section 148A of the Act were not complied with before issuing the notice under Section 148. Revenue's Contention: The respondents submitted that Section 159 of the Act creates a liability upon the legal heirs, who step into the shoes of the deceased assessee for assessment or reassessment purposes. Therefore, the department was entitled to proceed against the legal representatives.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d),Section 148,Section 159

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2024:RJ-JD:10017-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 9985/2023 Legal Heirs Of Smt. Sneh Lata Bhandari, Through (1) Smt. Richa Jain W/o Shri Naresh Jain, Daughter Of Late Shri Suresh Chand Bhandari And Late Smt. Sneh Lata Bhandari, Aged About 50 Years, Resident Of 601, G- 5, Vastu Heights, Sundervan Complex, Lokhadwala Road, Andheri West, Mumbai 400053. ----Petitioners Versus 1. Income Tax Officer, Ward 3(1), Jodhpur. 2. The Joint Commissioner Of Income Tax, Range 3, Jodhpur. 3. The Principal Chief Commissioner Of Income Tax, New Central Revenue Building, Bhagwan Dass Road, Jaipur 302005. 4. Legal Heirs Of Smt. Snehlata Bhandari, Through (a) Smt. Swapna Patawari W/o Shri Manoj Patawari, Daughter Of Late Shri Suresh Chand Bhandari And Late Smt. Sneh Lata Bhandari, Resident Of 12, Roop Rajat Sarovar, Pal Link Road, Jodhpur 342003. (b) Manoj Bhandari S/o Late Shri Suresh Chand Bhandari And Late Smt. Sneh Lata Bhandari, Aged About 54 Years, Resident Of 262, Hari Nagar, Jhanwar Road, Jodhpur 342001 (Rajasthan). ----Respondents For Petitioner(s) : Mr. Sheetal Kumbhat For Respondent(s) : Mr. Sunil Bhandari for respondents No.1 to 3 Mr. Tapendra Sankhla for respondents No.4(a) and 4(b) HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE MUNNURI LAXMAN

Order 27/02/2024

1.

The present petition has been preferred with the following prayers:- “(a) by an appropriate writ, order and/or direction, the show cause Notice under Section 148 dated 30.03.2023 (Annexure-3) issued upon the (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (2 of 7) [CW-9985/2023] deceased assessee and consequential proceedings in furtherance thereto including Letter/Order dated 19.04.2023

(Annexure–6),

Notice

dated 21.04.2023 (Annexure-7) and order dated 21.04.2023 (Annexure-8) passed under Section 148A(d) of the Income Tax Act, 1961 may kindly be quashed and set aside; and (b) any other appropriate writ, order or direction which this Hon’ble Court consider just and proper in the facts and circumstances of the case may be passed in favour of the petitioners.”

2.

Brief facts as noticed by this Court are that the assessee Smt. Sneh Lata Bhandari passed away way back on 16.05.2018, but a show cause notice was issued to her under Section 148A(b) of the Income Tax Act, 1961 (hereinafter referred to as “the Act of 1961”) on 30.03.2023. 3. Mr. Sheetal Kumbhat, learned counsel for the petitioner submits that the show cause notice could not have been issued to a dead person and by the time such order was passed, the legal representatives of the deceased Smt. Sneh Lata Bhandari were brought on record and a decision was taken to proceed under Section 148 of the Act of 1961 and without complying the mandatory provisions of Section 148A of the Act of 1961, a notice (Annexure-7) was issued to her on 21.04.2023. 4. Upon being asked, Mr. Sunil Bhandari, learned counsel for the respondents submitted that the Section 159 of the Act of 1961 creates almost the same liability upon the legal heirs as he step into the shoes of assessee for the purpose of assessment or reassessment upon the legal representatives of the deceased (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (3 of 7) [CW-9985/2023] assessee. Thus the Department was entitled to proceed against the legal representatives.

5.

This Court has heard the submissions from both the sides.

6.

Sections 148A and 159 of the Act of 1961 reads thus:- 148-A.

Conducting

inquiry,

providing opportunity before issue of notice under Section 148.—The Assessing Officer shall, before issuing any notice under Section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, [* * *], by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under Section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under Section (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (4 of 7) [CW-9985/2023] 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where,— (a) a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under Section 132-A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under Section 132 or requisitioned under Section 132-A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, [relate to, the assessee; or (d) the Assessing Officer has received any information under the scheme notified under Section 135-A pertaining to income chargeable to (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (5 of 7) [CW-9985/2023] tax escaping assessment for any assessment year in the case of the assessee. Explanation.—For the purposes of this section, specified authority means the specified authority referred to in Section 151.

159.

Legal representatives.—(1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under Section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),— (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee. (4) Every legal representative shall be personally liable for any tax payable by him in his capacity as (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (6 of 7) [CW-9985/2023] legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of Section 161, Section 162 and Section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a representative under this section shall, subject to the provisions of sub- section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability.”

7.

This Court is of the firm opinion that the proceedings under the liability created against the legal representatives of the deceased assessee can be initiated against the petitioner but only after compliance of mandatory provisions under Section 148A (b) of the Act of 1961. It is writ large on the record and the reply that the provision of Section 148A(b) of the Act of 1961 has not been complied against the legal representatives of the deceased Smt. Sneh Lata Bhandari.

8.

In limited nature of adjudication, the impugned notice dated 21.04.2023 (Annexure-7) under Section 148A of the Act of 1961 and the order dated 21.04.2023 (Annexure-8) passed under Section 148A(d) of the Act of 1961 are hereby quashed and set aside. (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

[2024:RJ-JD:10017-DB] (7 of 7) [CW-9985/2023]

9.

However, the respondents shall be free to reinitiate the proceedings against the legal representatives of the deceased Smt. Sheh Lata Bhandari, while strictly complying with the provisions of the Section 148A(b) and 159 of the Act of 1961. 10. Both the parties shall be free to proceed strictly in accordance with law.

11.

Since, the liberty has been given to the respondent- Department to reinitiate the proceedings under Section 148A(b) and Section 159 of the Act of 1961, the limitation period between the filing of the writ petition and till its disposal shall be excluded for the purpose of computation of limitation period for initiating such proceedings.

12.

The writ petition stands disposed of accordingly.

(MUNNURI LAXMAN),J (DR.PUSHPENDRA SINGH BHATI),J 292-Ramesh/BhumikaP/- Powered by TCPDF (www.tcpdf.org) (Uploaded on 29/02/2024 at 04:15:25 PM) (Downloaded on 28/10/2026 at 12:01:48 AM)

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