The notice issued under Section 148A(d) to a deceased person was void ab initio: Delhi HC




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The notice issued under Section 148A(d) to a deceased person was void ab initio: Delhi HC

 

The Delhi High Court in a write petition in the case of Late Sh. Lal Chand Verma (Through His Legal Heir) vs. Union of India & Anr. [W.P. (C) 8184/2023 & CM APPL. 31377/2023 (Stay)] quashed the reassessment proceedings, holding that the notice issued under Section 148A(d) to a deceased person was void ab initio.

Let us have a Short Overview of the case:

Facts of the Case:
1. Demise of the Assessee: Late Sh. Lal Chand Verma passed away on 30th July 2021.

2. Notice Issued Post-Death:
The Income Tax Officer (ITO) issued a notice under Section 148A(b) dated 30th March 2023 to the deceased assessee, alleging escaped income for the Assessment Year 2019-2020.
The notice pertained to financial transactions amounting to ₹14,55,000.

3. Response by Legal Heir:
The deceased’s legal heir (son) responded on 1st April 2023, informing the ITO of the assessee’s demise and submitted a death certificate.
He argued that the notice was invalid as it was issued to a deceased individual.
4. Proceedings Continued:
Despite being informed, the ITO passed an order under Section 148A(d) on 13th April 2023 and issued a reassessment notice under Section 148 to the deceased.

Legal Issues:
1. Validity of Notice Issued to a Deceased Person:
Can a reassessment notice under Section 148 be issued to a deceased assessee after their death?
2. Compliance with Section 159 of the Income Tax Act, 1961:
Whether the tax authorities should have issued a notice to the legal representative under Section 159(2)(b) instead of the deceased person?

3. Applicability of Section 292B:
Can procedural defects, such as issuing a notice to a deceased person, be cured under Section 292B of the Act?

Court Ruling
The court has held as under:
1. The notice issued under Section 148A(d) to a deceased person was void ab initio.
2. The ITO failed to comply with Section 159, as no notice was issued to the legal representative.
3. Section 292B could not cure the jurisdictional defect of issuing a notice to a non-existent person.

Precedents Relied Upon:
Savita Kapila v. Assistant Commissioner of Income Tax (2020 SCC OnLine Del 2540):
The court held that issuing a notice to a deceased person is unsustainable in law. Even under Section 292B, such a defect cannot be cured.
Dharamraj v. Income Tax Officer (2022 SCC OnLine Del 174):
A notice issued under Section 148 to a deceased person is invalid, as the jurisdictional requirement of serving notice to the correct person is not met.
Calcutta Discount Co. Ltd. v. ITO (1961) 41 ITR 191 (SC):
The Supreme Court underscored the importance of strict compliance with statutory procedural requirements, which form the basis for jurisdiction.
Sumit Balkrishna Gupta v. ACIT (2019) 414 ITR 292 (Bom):
The Bombay High Court held that reopening proceedings under Section 148 against a deceased assessee without issuing notice to the legal heir was invalid.

The Copy of the order is as under:

61008012025CW81842023_110828




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