Facts of the Case

The original assessee Late Sh. Lal Chand Verma passed away on 30 July 2021. Subsequently, the Income Tax Officer issued a notice dated 30 March 2023 under Section 148A(b) of the Income Tax Act, 1961 for Assessment Year 2019-20, alleging that certain financial transactions amounting to ₹14,55,000 represented income escaping assessment.

The notice was issued in the name of the deceased assessee.

The legal heir (son) responded on 1 April 2023, informing the department about the death of the assessee and submitted the death certificate. Despite this information, the department proceeded to pass an order under Section 148A(d) and issued a reassessment notice under Section 148 to the deceased person.

Aggrieved by these actions, the legal heir filed a writ petition before the Delhi High Court seeking quashing of the impugned notices and consequential proceedings.

  

Issues Involved

  1. Whether a notice issued under Section 148A(b) or Section 148 of the Income Tax Act to a deceased assessee is valid in law.
  2. Whether reassessment proceedings initiated after the death of the assessee can continue without issuing notice to the legal representative under Section 159.
  3. Whether such jurisdictional defects can be cured under Section 292B of the Income Tax Act.

Petitioner’s Arguments

  • The notice issued under Section 148A(b) was addressed to a person who had already died, making the proceedings void ab initio.
  • The legal heir had informed the department of the death and submitted the death certificate, yet the authorities continued the proceedings.
  • The jurisdictional requirement of issuing notice to the correct person was not satisfied, therefore the entire reassessment process was invalid.
  • Section 159 could not be invoked since the proceedings were initiated after the death of the assessee.

 

Respondent’s Arguments

  • The Income Tax Department argued that the proceedings could continue against the legal representative of the deceased assessee.
  • It relied on Section 159 of the Income Tax Act, claiming that defects in issuing notice could be rectified and the proceedings could be treated as valid against the legal heir.

 

Court Findings

The Delhi High Court held that the jurisdictional requirement for reopening assessment is that notice must be issued to the correct person.

The Court emphasized that issuing a notice to a deceased person is legally invalid, and such defect cannot be cured through procedural provisions.

The Court observed that Section 159 applies only when proceedings were initiated during the lifetime of the assessee and continue after death, not when proceedings are initiated after death.

  • Savita Kapila v. Assistant Commissioner of Income Tax (2020 SCC OnLine Del 2540)
  • Dharamraj v. Income Tax Officer (2022 SCC OnLine Del 174)

Court Order

  • The notice issued under Section 148A(b) in the name of the deceased assessee is invalid and void ab initio.
  • The subsequent order under Section 148A(d) and the reassessment notice under Section 148 were also quashed.
  • All consequential proceedings arising from the impugned notice were set aside.

Important Clarification by the Court

  • Issuance of notice to the correct person is a mandatory jurisdictional requirement for reopening assessment.
  • Section 159 cannot validate proceedings initiated against a deceased person.
  • Section 292B cannot cure such jurisdictional defects since the notice itself is issued to a non-existent person.   

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS05012024CW165242022_114311.pdf

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