RAJNNI HANUMAN MHATRE vs. INCOME TAX OFFICER WARD 3(2) AND ORS

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WP/333/2023HC BombayHCBM01054845202227 January 2023Author: HON'BLE SHRI JUSTICE DHIRAJ SINGH THAKUR,HON'BLE JUSTICE SHRI ARIF S. DOCTOR4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that a notice issued under Section 148 of the Income Tax Act, 1961, against a dead person is invalid unless the legal representatives submit to the jurisdiction of the Assessing Officer without raising any objection. The Court found that the Assessing Officer had ignored the fact that the assessee had passed away and proceeded to issue the notice under Section 148 in the name of the deceased. The Court relied on its previous decision in Sanket Shailendra Pathare & Ors. V/s. The Income Tax Officer Ward 32(1)(1) Mumbai. Consequently, the impugned order passed under Section 148A(d) and the notice under Section 148, both dated July 25, 2022, were set aside. The writ petition was allowed.

What were the facts?

The petitioner, Rajnni Hanuman Mhatre, is the legal heir of the deceased assessee, Late Hanuman Sakharam Mhatre. The Income Tax Officer (ITO) issued a notice under Section 148A(b) of the Income Tax Act, 1961, proposing to issue a notice under Section 148 for the assessment year 2014-15, alleging escaped income. The petitioner responded, informing the ITO of the assessee's demise on November 24, 2021, and providing a death certificate. She requested that no proceedings be initiated in the deceased's name, citing an inherent defect, and also raised objections on grounds of limitation. The ITO, in an order dated July 25, 2022, under Section 148A(d), proceeded to issue a notice under Section 148 on the same date, both in the name of the deceased assessee, ignoring the petitioner's submissions.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, against a deceased assessee, without impleading the legal representative and without their consent, is invalid? (Question of law turning on Section 148 and principles of natural justice). Assessee's Contention: The petitioner argued that a notice issued under Section 148 against a dead person is invalid, especially when the legal representative has not consented to the proceedings and has raised objections regarding the same. The petitioner relied on the High Court's decision in Sanket Shailendra Pathare & Ors. V/s. The Income Tax Officer Ward 32(1)(1) Mumbai. Revenue's Contention: The judgment does not record any specific arguments made by the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
13 WP.333.2023 AS.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 333 OF 2023 Rajnni Hanuman Mhatre, (legal } heir of Late Hanuman Sakharam } Mhatre, residing at Aajobanchi } Punyai Bungalow, Gauri Pada, } Behind Birla College, Kalyan-421301 } .. Petitioner Versus Income-tax Offcer Ward – 3(2), } Kalyan, Rani Mansion, Murbad } Road, Maharashtra, 421301 & Ors. } .. Respondents **** Mr. Dharan Gandhi, Advocate for the Petitioner. Mr. Ajeet Manwani a/w Ms Samiksha Kanani, Advocates for the Respondents. **** CORAM : DHIRAJ SINGH THAKUR AND ARIF S. DOCTOR, JJ. DATE : 27th JANUARY, 2023

ORDER PER DHIRAJ SINGH THAKUR, J.: . The Petitioner is the legal representative of Late Shri. Hanuman Sakharam Mhatre (deceased assessee), who was served R.V. Patil 1 of 4 RUSHIKESH V PATIL RUSHIKESH V PATIL Date: 2023.02.03 18:14:36 +0530

13 WP.333.2023 AS.doc with the notice under Section 148A(b) of the Income Tax Act, 1961 (“the Act”) requiring the Petitioner to show cause as to why a notice under Section 148 of the Act should not be issued on the basis of information to suggest that the income chargeable to tax had escaped assessment for the assessment year 2014-15. Response to the said notice was submitted by the Petitioner in her capacity as the legal representative of the deceased bringing to the notice of the Assessing Offcer (A.O.) about the demise of the deceased assessee. In the reply to the notice, the Petitioner ‘requested’ the A.O. not to issue any notice or initiate any proceedings in the name of the deceased as it would result in inherent defect in the entire proceedings. A copy of the death certifcate was also furnished for the perusal of the A.O which refects that the deceased assessee had passed away on 24th November, 2021. Besides these, an objection was also taken to the issuance of the proposed notice under Section 148 of the Act on grounds of limitation. What is evident from the reply fled by the Petitioner is that she did not consent to the continuance of the proceedings against her in her capacity as a legal representative, rather she R.V. Patil 2 of 4

13 WP.333.2023 AS.doc objected to the issuance of the proposed notice on the jurisdictional issue that the same was being issued against a dead person.

2.

The response fled by the Petitioner was considered by the A.O. in its order dated 25th July, 2022 passed under Section 148A(d) of the Act. In the said order, the A.O. appears to have conveniently ignored the factum regarding the assessee having since passed away, and proceeded to record the satisfaction regarding the case being ft for issuance of notice under Section 148 of the Act. A notice under Section 148 of the Act was then issued on 25th July, 2022. Interestingly, the order under Section 148A(d) of the Act as also the notice issued under Section 148 of the Act was not in the name of the legal representative the Petitioner herein but in the name of the deceased assessee. It is no longer res integra that a notice issued under Section 148 of the Act against a dead person would be invalid, unless the legal representatives submit to the jurisdiction of the A.O. without raising any objection. Reference in this regard can be made to the decision of this Court in the case of Sanket Shailendra Pathare & Ors. V/s. The Income Tax Offcer Ward 32(1)(1) Mumbai 1. 1 Writ Petition (L) No.18691/2022 decided on 15.09.2022. R.V. Patil 3 of 4

13 WP.333.2023 AS.doc

3.

Be that as it may, the petition is allowed. The impugned order passed under Section 148A(d) of the Act as also the notice under Section 148 of the Act, both dated 25th July, 2022, are set aside. The writ petition is disposed of accordingly. (ARIF S. DOCTOR, J.)

(DHIRAJ SINGH THAKUR, J.) R.V. Patil 4 of 4

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