KETAN RANJIT., vs. INCOME TAX OFFICER, WARD 1(1), PANAJI AND ANR.,

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WP/1101/2019HC BombayHCBM05004203201917 February 2020Author: HON'BLE SHRI JUSTICE M. S. SONAK,HON'BLE SMT. JUSTICE M. S. JAWALKAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the issue of a notice under Section 148 of the Income Tax Act, 1961, is the foundation for reopening an assessment. The Court found that the impugned notices were issued in the name of a deceased assessee, Mrs. Bhadravati Ranjit Canji, who had expired prior to their issuance. Following the precedent set in Sumit Balkrishna Gupta Vs. Assistant Commissioner of Income-Tax, the Court concluded that a notice issued in the name of a dead person for reopening an assessment is null and void. The requirement to issue notice to the correct person, and not a dead person, was deemed a condition precedent, not merely a procedural requirement. Accordingly, the Court quashed the impugned notice dated March 26, 2019, the show cause notice dated December 9, 2019, and the letter dated December 9, 2019. However, the Court clarified that the Revenue is not prohibited from issuing fresh notices for reassessment in accordance with law, provided the requirements of Sections 147/148 are satisfied, including limitation.

What were the facts?

The petitioner, Mr. Ketan Ranjit, challenged a notice dated March 26, 2019, a show cause notice dated December 9, 2019, and a letter dated December 9, 2019, issued under Section 148 of the Income Tax Act, 1961. These notices sought to reopen the assessment for the Assessment Year 2012-2013 concerning the assessee, Mrs. Bhadravati Ranjit Canji. The material fact is that Mrs. Bhadravati Ranjit Canji had expired on July 3, 2017, prior to the issuance of the impugned notices. The petition was filed in the High Court of Bombay at Goa.

What were the issues?

1. Whether the notices issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for Assessment Year 2012-2013 are null and void when issued in the name of a deceased assessee, Mrs. Bhadravati Ranjit Canji, who expired on July 3, 2017. This is a question of law. The Petitioner's contention is that the notices are invalid as they were issued to a deceased person, rendering them null and void. The Petitioner relies on the decision in Sumit Balkrishna Gupta Vs. Assistant Commissioner of Income-Tax, Circle 16(2), Mumbai. The Revenue's contention is not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 147

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
1 IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.1101 OF 2019 Mr. Ketan Ranjit, s/o. late Mrs. Bhadravati Ranjit Canji, Indian National, married, major of age, r/o. Maganlal Sadan, Dr. Dada Vaidya Road, Panaji – Goa – 403001. .... Petitioner. V/s. 1. Income Tax Officer, Ward 1(1) Panaji, having his Office at Aayakar Bhawan, 1st Floor, 5 EDC Complex, Patto Plaza, Panaji – Goa. 2. Principal Commissioner of Income Tax, having his Office at Aayakar Bhawan, Plot No.5, EDC Complex, Patto Plaza, Panaji, Goa- 403001. …. Respondents Mr. Gaurang D. Panandiker and Ms. Eesha Dukle, Advocates for the petitioner. Ms. Amira Abdul Razaq, Standing Counsel for the Income Tax Department - Respondents. 2 Coram : M. S. SONAK & SMT. M.S. JAWALKAR, JJ. Date : 17th February, 2020.

Oral Judgment: (Per M.S. Sonak, J.): Heard Gaurang D. Panandiker, the learned Counsel for the petitioner and Ms. Amira Abdul Razaq, the learned Standing Counsel for the Income Tax Department - Respondents.

2.

Rule. Rule is made returnable forthwith at the request and consent of the learned Counsel for the parties.

3.

That challenge in this petition is to the Notice dated 26.3.2019, Show Cause Notice dated 9.12.2019 and Letter dated 9.12.2019 issued under Section 148 of the Income Tax Act, 1961 seeking to reopen the Assessment for the Year 2012 - 2013 in respect of the assessee Mrs. Bhadravati Ranjit Canji.

4.

The record bears out that Mrs. Bhadravati Ranjit Canji expired on 3.7.2017. Therefore, it is apparent that the aforesaid impugned notices/letter were issued to the person who had already Commissioner of Income-Tax, Circle 16(2), Mumbai,1 the Division Bench of this Court upon considering several other decisions has held that issue of notice of reopening the income in the name of the of the deceased assessee and after considering the same, came to the conclusion that the notice issued in the name of the dead person for reopening of assessment is null and void. This Court has held that the issue of the Notice under Section 148 of the IT Act, is a foundation for reopening of assessment. The sine qua non for acquiring juri iction to reopen an assessment is that such notice should be issued in the name of the correct person. This requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent.

6.

Accordingly, following the decision of the Division Bench in the case of Sumit Balkrishna Gupta (supra), we quash the impugned Notice dated 26.3.2019, the Show Cause Notice dated 9.12.2019 and Letter dated 9.12.2019. However, we clarify that this Order/quashing will not prohibit the respondent Revenue from issuing fresh notice for reassessment in accordance with law, if, the requirements of Sections 147/148 of the IT Act, are satisfied including the requirement as to limitation. 1(2019) 103 taxmann.com 188 (Bombay)

4

7.

The Rule in this petition is made absolute in the aforesaid terms. There shall be no order as to costs. SMT. M.S. JAWALKAR, J. M. S. SONAK, J. af*

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