MARAPPAN BALASUBRAMANIAM (DECEASED), REP BY LEGAL HEIR KAVITHA BALASUBRAMANIAN (WIFE),KARUVALLUR ROAD, COIMBATORE vs. INCOME TAX OFFICER, WARD-1(2), TIRUPPUR, INCOME TAX OFFICE, TIRUPPUR

This Court has carefully considered the submissions made by the learned counsel on either side and perused the records. 14. 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

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 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

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. 23. 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 Taxman 186 it has been held that the provisions of Section 292B of the Act are not applicable and that framing of assessment against a non-existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect, as there cannot be any assessment against a dead person.

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. 26. For all the above reasons, this court holds that the impugned notice is wholly without jurisdiction and cannot be enforced against the petitioner. 27. Accordingly, the writ petition is allowed as prayed for. No costs. Consequently, the connected WMP is closed.

In the present case, the 1st respondent issued notice under Section 148 of the Income Tax Act on 31.03.2022 against the dead person, who is the husband of the petitioner. Upon the receipt of the notice, the petitioner in the capacity as the legal representative participated in the proceeding. Since she participated in the proceeding, the respondents continued the proceedings and passed assessment order in the name of dead person, accordingly initiated penalty proceedings. It is the settled principle of law that no order can be passed against the dead person and the same is non-est in law. 10. The Hon'ble Division Bench of this Court in the case of Commissioner of Income-Tax-VII, Chennai vs.M.Hemanathan reported in [2016] 67 taxmann.com 22 (Madras) has held as follows: “29............ A notice sent to a dead person is actually a nullity. There is only one exception in so far as civil proceedings are concerned, which could be traced to Order XXII Rule 4. Section 159 of the Income Tax Act also carves out an exception. Since service of notice on the legal heir of a dead person falls under the category of an exception to the general rule, the same cannot overtake the rule in the absence of a specific provision.”

In the present case, it is admitted that the impugned order was passed in the name of a dead person since the proceedings were initiated subsequent to the death of the original assessee. In terms of the provisions of Section 159(2)(b) of the Income Tax Act, any proceedings of the deceased person, subsequent to death, can be initiated against his legal representative. Though the present case was initiated subsequent to the death of the assessee, it was initiated in the name of the dead person and the assessment order was also passed in the name of a dead person, though his legal representative had participated in the proceedings. 12. Therefore, the department is supposed to have substituted the legal representative in the place of a dead person. However, they had not done the same and no order can be sustainable if it is passed in the name of a dead person. Further, as discussed above, in the case of Commissioner of Income-Tax-VII, Chennai vs.M.Hemanathan, the Hon’ble Division Bench of this Court had held that no proceedings can be initiated against a dead person. 13. For all these reasons, this Court is of the considered view that the impugned orders are not sustainable and the same are liable to be set aside. Accordingly, the impugned assessment order dated 21.03.2023 and the penalty proceedings dated 23.09.2023 are set aside. However, the liberty is granted to the respondent to initiate the proceedings against the legal representative of the deceased assessee in accordance with law. 14.With the above observations, these writ petitions are allowed. No costs. Consequently, connected miscellaneous petitions are closed. 7. In view of the undisputed facts that the assessee had expired on 26.07.2018 and that the Assessing Officer was duly informed of the said fact, we find that the notice issued under section 148 of the Act and the consequent assessment proceedings were initiated and completed in the name of a deceased person. No notice under section 159 of the Act was issued to the legal representatives, nor were the proceedings ever validly initiated against them. Mere participation of one of the legal heirs in the assessment proceedings cannot cure this fundamental jurisdictional defect. Such a defect is not curable under section 292B of the Act.