Case Note & Summary
The petitioner, Dhirendra Bhupendra Sanghvi, as the legal heir of Late Smt. Ushaben Bhupendra Sanghvi (the deceased assessee), filed a writ petition under Article 226 of the Constitution challenging reassessment notices issued under the Income Tax Act, 1961. The deceased assessee expired on 4 December 2019. She had filed her return of income for Assessment Year 2018-19 on 5 June 2018, declaring total income of ₹1,94,28,890 from capital gains and other sources. After her death, the petitioner applied for change of address and transfer of jurisdiction from Mumbai to Gandhinagar. However, on 19 March 2022, the Assistant Commissioner of Income Tax issued a notice under Section 148A(b) of the Act in the name of the deceased assessee. Subsequently, on 31 March 2022, an order under Section 148A(d) and a notice under Section 148 were also issued in the name of the deceased. The petitioner challenged these notices on the ground that they were issued after the death of the assessee and without substituting the legal heir. The court framed the issue of whether such notices are valid. The petitioner argued that the notices are void ab initio as they were issued to a dead person, relying on the principle that proceedings against a dead person are a nullity. The respondents contended that the defect was curable under Section 292B of the Act. The court analyzed Section 159 of the Act, which deals with the liability of legal representatives, and held that the Assessing Officer must first substitute the legal heir before issuing any notice. The court found that the notices were not mere procedural irregularities but fundamental defects, as they were not issued to the correct person. The court distinguished the case from those where the notice was issued before death but served after, or where the legal heir participated in proceedings. The court held that Section 292B cannot cure such a fundamental defect. Consequently, the court quashed the notice dated 19 March 2022 under Section 148A(b), the order dated 31 March 2022 under Section 148A(d), and the notice dated 31 March 2022 under Section 148, all issued in the name of the deceased assessee. The court also set aside the approval granted on 30 March 2022 by the Principal Commissioner. The petition was allowed with no order as to costs.
Headnote
A) Income Tax - Reassessment - Notice to Deceased Assessee - Sections 148A(b), 148A(d), 148, 159, 292B of Income Tax Act, 1961 - Validity of notice issued in name of deceased person - The court considered whether reassessment proceedings initiated against a deceased assessee after her death, without substituting the legal heir, are valid. Held that such notices are invalid and void ab initio as they are not issued to the correct person. The legal heir must be brought on record before issuing any notice. The court relied on the principle that proceedings against a dead person are a nullity. (Paras 1-9) B) Income Tax - Substitution of Legal Heir - Section 159 of Income Tax Act, 1961 - Duty of Assessing Officer - The court held that under Section 159, the legal representative is liable to be assessed but only after being properly substituted. The Assessing Officer must first substitute the legal heir and then issue notices. Issuing notices in the name of the deceased is not a mere procedural irregularity but a fundamental defect. (Paras 5-9) C) Income Tax - Curable Defect - Section 292B of Income Tax Act, 1961 - Applicability - The court held that Section 292B cannot cure a notice issued to a dead person as it is not a mistake, defect, or omission in the notice but a fundamental jurisdictional error. The notice is not in substance and effect in conformity with the Act. (Paras 8-9)
Issue of Consideration
Whether reassessment notices under Section 148A(b) and Section 148 of the Income Tax Act, 1961 issued in the name of a deceased assessee after her death, without substituting the legal heir, are valid and sustainable in law.
Final Decision
The court allowed the petition and quashed the notice dated 19 March 2022 under Section 148A(b), the order dated 31 March 2022 under Section 148A(d), and the notice dated 31 March 2022 under Section 148, all issued in the name of the deceased assessee. The approval granted on 30 March 2022 by the Principal Commissioner was also set aside. No order as to costs.
Law Points
- Reassessment notice issued in name of deceased assessee is invalid
- Legal heir must be substituted before issuing notice
- Section 148A(b) notice and Section 148 notice must be addressed to correct person
- Proceedings against dead person are nullity
