INCOME TAX OFFICER, WARD-1, RATNAGIRI, RATNAGIRI vs. LATE SHRI SUBHASH SHANKAR WAINGANKAR, THROUGH LEGAL HEIR SHRI RUSHIKESH SUBHASH WAINGANKAR , RATNAGIRI

आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: These are two appeals Revenue and cross objection C.O. No.11/PUN/2024 filed by the legal heir of Assessee; are directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC] u/sec.250 of the Act, dated 07.08.2023 emanating from the assessment order u/s.147 r.w.s 144B of the Income Tax Act, 1961 dated 03.03.2022. The Revenue has raised the following grounds of appeal : “i. The Ld.CIT(Appeals) erred In accepting the self-serving documents not corroborated by evidence and which had not stood the test of enquiries in assessment proceedings.

Submission of Ld.AR : 2. Ld.AR filed a paper book. The Ld.AR demonstrated that the notice u/s 148 was issued in the name of the dead individual as assessee had already died. The Ld.AR relied on decision of Hon’ble Bombay High Court, Gujarat High Court and Delhi High Court.

Submission of Ld.DR : 3. Ld.Departmental Representative(ld.DR) for the Revenue submitted that assessee participated in the assessment proceedings hence as per Section 292BB assessee is precluded from challenging the validity of notice and order. Ld.DR also submitted that Legal Heirs of the assessee never informed the Assessing Officer about death of the assessee.

Findings and Analysis: 4. We have heard representatives of both the parties and perused the records.

4.1 In this case, Legal representative of the Assessee filed cross objection Cross Objection No.11/PUN/2024. Legal ground has been raised in the Cross Objection that since Mr.Subhash Shankar Waingankar had died on 07/10/2020 and notice u/s 148 was issued in the name of deceased the entire proceeding and the assessment order is void.

We take up the Legal Ground first.

4.2 We will first reproduce the basic facts of the case relevant for the legal issue. Date of Death of Mr. Subhash S Waingankar 07/10/2020 Date of issue of Notice u/s 148 in the name of 31/03/2021 Subhash Shankar Waingankar Date of Order u/s 148 in the name of Subhash 03/03/2022 Shankar Waingankar 4.2.1 Thus, it is an admitted fact that Mr.Subhash Shankar Waingankar died on 07/10/2020. The Ld.AR has filed copy of the death certificate. The copy of the death certificate was also filed before the Ld.CIT(A).

4.2.2 It is also a fact that the Notice u/sec.148 was issued in the name of Mr. Subhash Shankar Waingankar on 31/03/2021. We have perused the copy of the notice which is filed in the paper book. Thus, the notice u/s 148 was issued in the name of a dead person. It was claimed by the revenue that notice was served by electronic mode. The notice u/sec.148 is a Jurisdictional Notice as the Assessing Officer assumes jurisdiction through the notice for reassessment. Therefore, the notice u/sec.148 should be issued and served on a living person. Since in this case the assessee had already died, there is no question of service of notice on the deceased assessee. Thus, in this case there was no valid notice and no valid service.

4.3 Section 159 of the Income tax Act gives the procedure for issuing notice where the assessee is dead. The Section 159 of the Income tax Act is reproduced here as under : Legal representatives. 159. (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),— (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly.”

4.3.1 Thus, as per Section 159(2) (b) any proceedings which could have been taken against the deceased if he would have been surviving, may be taken against the Legal representative. In this case since the assessee was already dead at the time of issue of notice u/s 148, as per Section 159 of the Act it was mandatory for the Income tax Authorities to issue the notice u/s 148 in the name of the Legal representative. However, in this case the notice u/s 148 has been issued in the name of the deceased assessee. Income Tax Act has adopted the definition of Legal Representative as defined in Section 2(11) of Code of Civil Procedure 1908.

4.4 The Hon’ble Bombay High Court in the case Devendra Vs. Addl.CIT 461 ITR 463 (Bombay)[13-07-2023] has held as under : Quote “ 17. The issue which falls for consideration is as to whether the impugned notice under section 148 of the I.T. Act, 1961 is issued in the name of dead person said Shri Vasudeo Jambhulkar is enforceable in law. The fact that Shri Vasudeo Jambhulkar died on 8- 7-2020 is not disputed. The notice issued in the name of the dead person is unenforceable in the eye of law. 1

It is also observed by the Delhi High Court in Savita Kapila (supra) as under: "32. This Court is of the view that in the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department. After all, there may be cases where the legal representatives are estranged from the deceased assessee or the deceased assessee may have bequeathed his entire wealth to a charity. Consequently, whether PAN record was updated or not or whether the Department was made aware by the legal representatives or not is irrelevant."

"7. 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. This is evident from section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must 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 responded. 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."

4.4.1 Thus, the Hon’ble Bombay High Court held that a Notice u/sec.148 issued in the name of Dead individual is null & void. The reassessment order passed in the name of dead individual is null & void. The Hon’ble Bombay High Court also held that Section 292B or 292BB will not be able to cure this defect.

4.5 Therefore, respectfully following the Hon’ble Jurisdictional High Court (supra), we hold that the impugned Notice under section 148 dated 31/03/2021 and the Order u/s 148 dated 03/03/2022 is void ab initio.

6.1 Since, we have held that the notice u/sec.148 and the order u/sec.148 was void ab-initio, the grounds raised by the Revenue becomes academic in nature. Accordingly, the grounds raised by the revenue are dismissed as unadjudicated being academic in nature.