LATE SH SETHURAMAN THROUGH LEGAL HEIR SH S NISHAANTH ,CHENNAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 3(1), CHENNAI

Shri Suresh Kumar Gupta, CA, appearing on behalf of the assessee submits that the assessee died on 17.12.2015, his death certificate is at page 1 of the paper book. The legal heir of the deceased assessee filed objection to the notice u/s. 148 vide letter dated 29.04.2022 informed the Assessing Officer (AO) regarding death of assessee is at page 35-39 of the paper book. Despite, the fact that AO was informed about death of assessee, the AO passed ex-parte assessment u/s.147 r.w.s. 144 read with section 144B of the -3 - ITA. No:2615/Chny/2024 Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) in the name of deceased assessee on 16.03.2023. The LR of the assessee carried the issue in appeal before the CIT(A) inter alia assailing validity of assessment order as the same was passed in the name of a dead person.

The CIT(A) in appellate proceeding dismissed appeal of the assessee without adjudicating the legal issue of validity of notice u/s. 148 of the Act issued in the name of a dead person. The ld. AR submits that assessment is liable to be quashed only on the ground that the notice u/s. 148 of the Act and subsequent proceedings including assessment order is in the name of a dead person.

Per contra, Ms. R Anitha, Addl.CIT representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. The primary contention of the assessee is that notice u/s. 148 of the Act and subsequent ex-parte assessment u/s.147 r.w.s. 144 read with section 144B of the Act have been passed in the name of deceased, hence, proceeding arises there from are vitiated. The assessee died on 17.12.2015 as is evident from his death certificate placed on record at page 1 of the paper book. The LR’s of deceased assessee vide objection letter dated 29.04.2022 informed the AO regarding death of assessee and also enclosed his death certificate. The said letter is at pages 35-39 of the paper book. Despite the fact that AO was informed about the death of assessee, still he ex-parte assessment u/s.147 r.w.s. 144 read with section 144B of the Act on 16.03.2023 in the name of deceased assessee.

The issue, which falls for consideration, is as to whether the impugned notice under Section 148 of the Act issued in the name of the dead person - the said Mr.S.Veerappan is enforceable in law and the subsidiary issue being as to whether the petitioner, being the wife of the said Mr.S.Veerappan, can be compelled to participate in the proceedings and respond to the impugned notice. The fact that the said Mr.S.Veerappan died on 26.1.2010 is not in dispute. If this fact is not disputed, then the notice issued in the name of the dead person is unenforceable in the eye of law.

The Department seeks to justify their stand by contending that they were not intimated about the death of the assessee, that the legal heirs did not take any steps to cancel the PAN registration in the name of the assessee and that therefore, the Department was justified in directing the petitioner to co-operate in the proceedings pursuant to the impugned notice.

The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the Revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. In my considered view, the answer to the question should be definitely against the Revenue.

This Court supports such a conclusion with the following reasons : Admittedly, the limitation period for issuance of notice for reopening expired on 31.3.2017. The impugned notice was issued on 30.3.2017 in the name of the dead person. On being intimated about the death, the Department sent the notice to the petitioner - his spouse to participate in the proceedings. This notice was well beyond the period of limitation, as it has been issued after 31.3.2017. If we approach the problem sans complicated facts, a notice issued beyond the period of limitation i.e. 31.3.2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed before this Court by the -5 - ITA. No:2615/Chny/2024 Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration.

In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings under Section 159 of the Act can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 of the Act have no application.

The Revenue seeks to bring their case under Section 292 of the Act to state that the defect is a curable defect and on that ground, the impugned notice cannot be declared as invalid.

The language employed in Section 292 of the Act is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act.

All the above reasons are fully supported by the decision in the case of Vipin Walia. (supra). In that case, the notice dated 27.3.2015 was issued under Section 148 of the Act to the assessee, who died on 14.3.2015. The validity of the said notice was put to challenge. The Income Tax Officer took a stand that since the intimation of death of the assessee on 14.3.2015 was not received by her, the notice was issued on a dead person. However, the fact regarding the death of the assessee could not be disputed by the Department. The Department continued the proceedings under Section 147/148 of the Act and at that stage, the son of the deceased approached the High Court of Delhi. The High Court of Delhi pointed out that what was sought to be done by the Income Tax Officer was to initiate proceedings under Section 147 of the Act against the deceased assessee for the assessment year 2008-09, for which, the limitation for issuance of notice under Section 147/148 of the Act was 31.3.2015 and on 02.7.2015 when the notice was issued, the assessee was already dead and if the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31.3.2015 by issuing the notice to the legal heirs of the deceased and beyond that date, it could not have proceeded in the matter even by issuing notice to the legal representatives of the assessee. The decision in Vipin Walia (supra) fully supports the case of the petitioner herein.

The decision in the case of Vipin Walia (supra) was followed in the decision of the High Court of Gujarat in the case of Rasid Lala, (supra) in which, the reassessment proceedings were initiated against the dead person, that too, after a long delay. The Court pointed out that even if the provisions of Section 159 of the Act are attracted, in that case also, the notice was required to be issued against and in the name of the heirs of the deceased assessee and under the said circumstances, Section 159 of the Act shall not be of any assistance to the Revenue.

In the decision of the Delhi High Court in the case of Spice Entertainment Ltd. (supra) one of the questions, which fell for consideration, is as to whether such framing of assessment against a non-existing entity or a dead person could be brought within the ambit of Section 292B of the Act and after referring to the decisions on the point including the decision of the Allahabad High Court in the case of Sri Nath Suresh Chand Ram Naresh v. CIT [2006] 280 ITR 396/145

The learned Senior Standing Counsel for the Revenue has sought to distinguish the decision in the case of Spice Entertainment Ltd. (supra) by referring to Sky Light Hospitality LLP. Case (supra) 25. On a perusal of the factual position therein, the Court came to the conclusion that the defect was curable because it was held that the notice was not addressed to the correct name and that the PAN mentioned was also incorrect. The factual background was taken into consideration and the Court held that errors and mistakes cannot and should not nullify the proceedings, which are otherwise valid and that no prejudice had been caused, as this being the mandate of Section 292B of the Act. The decision in the case of Sky Light Hospitality LLP case (supra) is clearly distinguishable on facts and it does not support the case of the Revenue.

For all the above reasons, this court holds that the impugned notice is wholly without jurisdiction and cannot be enforced against the petitioner.

Accordingly, the writ petition is allowed as prayed for. No costs. Consequently, the connected WMP is closed.

The Hon’ble High Court judgment in the case of Smt. Madhuben Kantilal Patel Vs UOI 452 ITR 17 (Guj) held that where the legal heirs of the assessee deceased had supplied information of death to the revenue and despite reopening notice issued subsequently u/s 148 in the name of deceased was illegal and thus liable to be set aside. Similarly, Hon’ble Delhi High Court in the case of Savita Kapila Vs ACIT (2020) 426 ITR 502:273 Taxman148: 118 Taxmann.com 46 (Del) has quashed the notice u/s 148 of the Act on a dead person.

In present case, I find that the AO in first instance has erred in issuing notice u/s. 148 of the Act in the name of a dead person and thereafter, has erred in framing assessment in the name of deceased without substituting the name of legal representatives of deceased. We, respectfully following the judgment of the Hon’ble Supreme Court and Hon’ble High Courts referred supra, set aside the notice dated 31.03.2022 issued under section 148 of the Act on deceased assessee and declare

In the result, the appeal filed by legal representative of the assessee is allowed.