MANJULA KANNAN (SINCE DECEASED) vs. THE INCOME TAX OFFICER

PDF · subscribers
WP/6531/2024HC KarnatakaKAHC01011253202404 June 2024Bench: S SUNIL DUTT YADAV5 pages
AI SummarySet aside

What did the High Court hold?

The High Court held that the notice issued under Section 148A(b) of the Income Tax Act, 1961, dated March 20, 2022, to the deceased Smt. Manjula Kannan, who had passed away on July 17, 2019, was defective. Following the admitted facts and the legal position that proceedings initiated by issuing a notice to a dead person are non est, the Court found that all subsequent proceedings would also abate. Therefore, the assessment order dated March 29, 2023, under Section 147 read with Section 144, and the penalty orders dated September 20, 2023, under Sections 271-F, 271(1)(b), and 271(1)(c) were set aside. The Court reserved the right of the Revenue to proceed against the legal representatives as per law and kept all contentions open.

What were the facts?

The petitioner, legal heir of the deceased Smt. Manjula Kannan, challenged several orders passed by the Income Tax Department. Smt. Manjula Kannan passed away on July 17, 2019. A notice under Section 148A(b) of the Income Tax Act, 1961, was issued on March 20, 2022, to the deceased Smt. Manjula Kannan. Subsequently, an assessment order dated March 29, 2023, under Section 147 read with Section 144, and penalty orders dated September 20, 2023, under Sections 271-F, 271(1)(b), and 271(1)(c) were passed. The petitioner contended that these proceedings were initiated against a dead person, rendering them non est.

What were the issues?

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, to a deceased person is valid in law, and consequently, whether all subsequent proceedings are vitiated? Assessee's contention: The assessee argued that a notice issued to a dead person is non est in law. They relied on the High Court of Judicature at Bombay's order in W.P.No.10163/2022, which cited the Bombay High Court's decision in Sumit Balkrishna Gupta vs. Assistant Commissioner of Income Tax and the Supreme Court's decision in Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India Ltd. These authorities held that issuing a notice to a dead person or reopening assessment of a dead person is null and void, and such an error is a substantive illegality, not curable under Section 292B of the Act. Revenue's contention: The judgment does not record any specific contention from the revenue.

Which sections of the Income-tax Act were involved?

Section 148A(b),Section 147,Section 144,Section 271-F,Section 271(1)(b),Section 271(1)(c),Section 292B

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:19109 WP No. 6531 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 6531 OF 2024 (T-IT) BETWEEN: 1. MANJULA KANNAN (SINCE DECEASED) BY LEGAL HEIR SRI. KANNAN NARASIMHACHARI, AGED ABOUT 64 YEARS, S/O NARASIMHACHARI, RESIDING AT NO.204, 2ND STAGE, 3RD BLOCK, BEHIND BDA COMPLEX, NAGARABHAVI, BANGALORE - 560 072 … PETITIONER (BY SRI. R. CHANDRASHEKAR, ADVOCATE AND SRI KASHINATH KALMATH, ADVOCATE FOR SRI RAMA MURTHY R., ADVOCATE) AND: 1. THE INCOME TAX OFFICER WARD -1 (2) (1), KORAMANGALA BMTC BUS STAND COMPLEX, KORAMANGALA, BANGALORE-560 095 2. THE INCOME TAX OFFICER WARD -3(1) (3) KORAMANGALA Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:19109 WP No. 6531 of 2024 BMTC BUS STAND COMPLEX, KORAMANGALA, BANGALORE-560 095 … RESPONDENTS (BY SRI. M. DILIP, JR. STANDING COUNSEL)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASHING THE ORDER MADE U/S 148A(d) OF THE ACT DTD 30.03.2022 IN ITBA/AST/F/148A/2021-22/1042042546(1) (ANNEXURE-D) AS THE ORDER IS PASSED ON THE DEAD PERSON AFTER ISSUE OF NOTICE DTD 20.03.2022 U/S 148A(b) OF THE ACT (ANNEXURE-C) ON A DEAD PERSON AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

Petitioner has called in question the correctness of the assessment order dated 29.03.2023 passed under Section 147 read with Section 144 of the Income Tax Act, 1961 (for short 'the Act') at Annexure-F; order passed under Section 271-F of the Act dated 20.09.2023 at Annexure-G; order dated 20.09.2023 passed under Section 271(1(b) of the Act at Annexure-J, as well as the order under Section 271(1)(c) of the Act dated 20.09.2023 at Annexure-K.

- 3 -

NC: 2024:KHC:19109 WP No. 6531 of 2024 2. It is submitted that Smt. Manjula Kannan is the wife Sri. Kannan Narasimhachari. Smt. Manjula Kannan died on 17.07.2019. Copy of the death certificate of Smt. Manjula Kannan is enclosed at Annexure-B. 3. It is submitted that notice under Section 148(A)(b) of the Act was issued on 20.03.2022 at Annexure-C. Perusal of the said notice would indicate that it is issued to Manjula Kannan, who admittedly has died on 17.07.2019. It is the position in law that where notice is issued to a dead person, proceedings are non est. The petitioner has relied on the order of the High Court of Judicature at Bombay in W.P.No.10163/2022 in support of such contention. 4. Paragraph No.10 of W.P.No.10163/2022 is extracted below: "The facts are not in dispute. The impugned notice for reopening the assessment was issued on a dead person. There are several judgments of different High Courts holding that the notice issued on a dead person or reopening of

- 4 -

NC: 2024:KHC:19109 WP No. 6531 of 2024 assessment of a dead person is null and void in law and the requirement of issuing a notice to a correct person is not merely a procedural requirement but a condition precendent for a notice to be valid in law. A reference in this respect can be made to a decision of this Court in Sumit Balkrishna Gupta vs. Assistant Commissioner of Income Tax, Circle 16(2), Mumbai - (2019) 103 taxmann.com 188 (Bombay). In the case of Principal Commissioner of Income Tax, New Delhi vs. Maruti Suzuki India Ltd. - (2019) 107 taxmann.com 375 (SC) the Apex Court has held that the notice issued and the order passed in the name of an old entity is bad in law and that such error was not curable u/s 292B of the Act as the same constitutes a substantive illegality and not a mere procedural violation." 5. In light of the admitted facts and if the notice under Section 148(A)(b) of the Act, is defective on the ground that the assessee was dead earlier to it, all subsequent proceedings would also stand abated. 6. Accordingly on such sole ground, ex-parte assessment order dated 29.03.2023 passed under Section

- 5 -

NC: 2024:KHC:19109 WP No. 6531 of 2024 147 read with Section 144 of the Act at Annexure-F; order passed under Section 271-F of the Act dated 20.09.2023 at Annexure-G; order dated 20.09.2023 passed under Section 271(1(b) of the Act at Annexure-J, as well as the order under Section 271(1)(c) of the Act dated 20.09.2023 at Annexure-K, are set aside. 7. Needless to state that insofar as the right of the Revenue to proceed in further proceedings as regards the due of Manjula Kannan, as against her legal representatives as per law is reserved. All contentions are kept open. 8. In light of the above, petition is disposed off. Sd/- JUDGE VP

More judgments on Section 148A(b)

All 524 judgments and leading authorities on Section 148A(b) →

Recent GST High Court judgments

Search GST case law →