Case Note & Summary
The petitioner, Shri Devendra S/o Vasudeo Jambhulkar, is the son and legal heir of late Vasudeo Damduji Jambhulkar, who was an income tax assessee with PAN AKAPJ7925K. The deceased assessee died on 08.07.2020. During his lifetime, he had filed his income tax return for Assessment Year 2016-17 declaring taxable income of Rs.5,57,090/- and exempt income from sale of agricultural land of Rs.9,31,12,500/- under Section 10(37) of the Income Tax Act, 1961. The return was processed under Section 143(1) with no tax payable or refundable. Subsequently, the respondent No.2 issued a notice under Section 148 of the Act dated 31.03.2021 in the name of the deceased assessee for reassessment. The petitioner, as legal heir, received the notice and filed a reply under protest stating that the notice was issued on a dead person and was without jurisdiction. Despite this, the respondents proceeded with reassessment and passed an ex-parte reassessment order dated 31.03.2022 under Section 147 read with Section 144 of the Act, raising a demand of Rs.5,89,18,411/-. The petitioner challenged the notice and the reassessment order by way of a writ petition. The court considered the legal issue whether a notice under Section 148 issued to a dead person is valid. The court held that the notice was void ab initio as it was issued to a person who was not in existence at the time of issuance. The court relied on the principle that proceedings against a dead person are a nullity and cannot be validated by the legal heir's participation under protest. The court also noted that the respondents had not substituted the legal heir before issuing the notice or passing the reassessment order. The court quashed the notice dated 31.03.2021 and the reassessment order dated 31.03.2022, and set aside the demand raised. The writ petition was allowed with no order as to costs.
Headnote
A) Income Tax - Reassessment Notice to Dead Person - Section 148, Income Tax Act, 1961 - Notice issued to deceased assessee is void ab initio - The court held that a notice under Section 148 issued in the name of a person who died before the issuance of the notice is without jurisdiction and cannot be validated by subsequent participation of legal heir under protest. The reassessment order passed on the basis of such notice is also a nullity. (Paras 2-15) B) Income Tax - Substitution of Legal Heir - Section 159, Income Tax Act, 1961 - Proceedings against dead person without substitution - The court held that where the assessee dies before initiation of reassessment, the notice must be issued to the legal representative. Failure to do so renders the entire proceedings void. The legal heir's participation under protest does not cure the defect. (Paras 16-20) C) Income Tax - Reassessment Order - Validity - Section 147, Income Tax Act, 1961 - Reassessment order passed on dead person - The court held that the reassessment order passed in the name of a deceased person is a nullity and cannot be enforced against the legal heir. The demand raised is without authority of law. (Paras 21-25)
Issue of Consideration
Whether a notice under Section 148 of the Income Tax Act, 1961 issued in the name of a deceased person and the consequent reassessment proceedings are valid and maintainable.
Final Decision
The court allowed the writ petition, quashed the notice dated 31.03.2021 under Section 148 and the reassessment order dated 31.03.2022 under Section 147 read with Section 144 of the Income Tax Act, 1961, and set aside the demand of Rs.5,89,18,411/-. No order as to costs.
Law Points
- Notice under Section 148 of Income Tax Act
- 1961 issued to a dead person is void ab initio
- Reassessment proceedings against a deceased assessee without substituting legal heir are without jurisdiction
- Legal heir can challenge such proceedings even if they participated under protest
- Principle that proceedings against a dead person are nullity
