GURTEJ SINGH L/H LT. AVTAR SINGH,PANCHKULA vs. ITO, PANCHKULA

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ITA 1103/CHANDI/2016Status: DisposedITAT Chandigarh01 March 2019AY 2007-085 pages
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What did the Tribunal hold?

The tribunal held that a notice under Section 148 must be issued in the name of a living person, and issuing it to a deceased individual renders it invalid. This is a foundational requirement for acquiring jurisdiction and cannot be cured by provisions like Section 292B or 292BB.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) heard an appeal concerning an assessment year where the original assessee had died five years prior to the issuance of a notice under Section 148 for reopening the assessment. The notice was issued in the name of the deceased assessee and served through affixation.

What were the issues?

The primary issue was the validity of a notice issued under Section 148 for reopening an assessment in the name of a deceased assessee. The tribunal also considered whether such an error could be rectified under Section 292B or 292BB.

Which sections of the Income-tax Act were involved?

Section 148,Section 292B,Section 292BB

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आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by Shri Gurtej Singh, legal heir of late Shri Avtar Singh, (deceased assessee) against the order dated 29.09.2016 of the Commissioner of Income Tax (Appeals), Panchkula [herein referred to as ‘CIT(A)’].

2.

Apart from contesting the additions made by the lower authorities on merits, the appellant has taken a legal ground regarding the validity of the assessment framed on the ground of issuing of notice u/s 148 of the Income-tax Act, 1961 (in short 'the Act') for reopening of the assessment in the name of the dead person i.e. deceased assessee.

ITA No. 1103/Chd/2016- Sh. Gurtej Singh, Panchkula 2

3.

None has come present on behalf of the assessee. We proceed to

decide the appeal after hearing the Ld. DR.

4.

The facts of the case in brief are that the original assessee had died

five years ago from the date of issuing of notice u/s 148 of the Act. Even,

the notice u/s 148 of the Act was served through affixation and not in a

regular mode of service. The notice was issued in the name of the deceased

assessee. The issue, in our view, is squarely covered by the various

decisions of the Hon'ble High Courts including the latest decision of the

Hon'ble Bombay High Court in the case of ‘Sumit Balkrishna Gupta Vs.

ACIT’ in Writ petition No. 3569 of 2018 vide order dated 15.2.2019,

wherein, the Hon'ble Bombay High Court has held that the issue of a notice

under Section 148 of the Act is a foundation for reopening of assessment.

The sine qua non for acquiring jurisdiction 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 to the

impugned notice being valid in law. Thus, a notice which has been issued

in the name of the dead person is also not protected either by provisions of

Section 292B or 292BB of the Act. This is so as the requirement of issuing

a notice in the name of correct person is the foundational requirement to

acquire jurisdiction to reopen the assessment. The Hon'ble High Court has

further observed that Section 148 of the Act requires that before a

proceeding can be taken up for reassessment, a notice be served upon the

assessee. The assessee on whom the notice must be sent must be a living

person i.e legal heir of the deceased assessee, for the same to be

ITA No. 1103/Chd/2016- Sh. Gurtej Singh, Panchkula 3

responded. That this in fact is the intent and purpose of the Act.

Therefore, Section 292B of the Act cannot be invoked to correct a

foundational / substantial error as it is meant so as to meet the

jurisdictional requirement. Therefore, both the impugned notices and the

impugned assessment order required to be quashed and set aside.

5.

Similarly, the Hon'ble Delhi High Court in the case of ‘Rajender

Kumar Sehgal Vs. ITO’ [2019] 101 taxmann.com 233 (Delhi) held that

where the notice seeking to reopen assessment was issued in the name of

deceased assessee, since she could not have been participated in

reassessment proceedings, provisions of section 292BB were not applicable

to the assessee’s case and as a consequence, reassessment proceedings

deserved to be quashed.

6.

At this stage, the Ld. DR has pointed out that the LR of the assessee

should have promptly come forward to apprise the Assessing officer that

the assessee had died so that notice could have been issued in the name of

legal representative of the assessee. We do not find any force in the

above contention of the Ld. DR. As noticed above, the notice was not

served through registered post / or by regular mode of service. The notice

in this case was allegedly served through substituted mode of the service

i.e. by affixation of the same at the door of the house of the assessee. Had

the Income-tax official actually gone to the house of the deceased assessee

and enquired from the villagers / family members about the whereabouts of

the assessee for the purpose of service of the notice, they could have easily

come to know about the death of the original assessee and would have

accordingly apprised the Assessing officer.

ITA No. 1103/Chd/2016- Sh. Gurtej Singh, Panchkula 4

7.

It is not believable that the Revenue officials had visited the house of the assessee and they could not get the information about the death of the assessee despite affixation of the notice which is also required to be witnessed by some independent / respectable of the village.

8.

In view of this, the issue is squarely covered by the decision of the Hon'ble Bombay High Court in the case of ‘Sumit Balkrishna Gupta Vs. ACIT’ (supra) and of the Hon'ble Delhi High Court in ‘Rajender Kumar Sehgal Vs. ITO’ (supra). The impugned notice issue u/s 148 of the Act, therefore, is held as ‘invalid’ and the consequent assessment proceedings, are, therefore, liable to be quashed. We order accordingly. In the result, the appeal of the appellant is hereby allowed.

Order pronounced in the Open Court on 01.03.2019

Sd/- Sd/- (अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member

Dated : 01.03.2019 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

ITA No. 1103/Chd/2016- Sh. Gurtej Singh, Panchkula

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