Facts of the Case

The petitioner, Narendra Mann, legal heir of the deceased assessee Laxmi Devi, filed a writ petition challenging the assessment order dated 30.03.2022 and the consequential demand notice issued for Assessment Year 2014–15. The challenge was premised on the fact that the impugned assessment order and the preceding notices were issued in the name of the deceased assessee, who had expired on 08.03.2020.

The deceased assessee had filed her return of income for AY 2014–15 on 31.07.2014. After her demise, the petitioner applied to be recorded as the legal heir, and the Income Tax Department accepted the request on 27.02.2021 after verifying the death certificate, PAN details, and bank nominee certificate.

Despite this, a notice dated 31.03.2021 under Section 148 was issued in the name of the deceased assessee. Thereafter, notices dated 25.01.2022 and 21.02.2022 under Section 142(1) were also issued in the name of the deceased, culminating in the assessment order dated 30.03.2022, which too was passed in the name of the deceased assessee.

Issues Involved

Whether reassessment proceedings initiated by issuing notice under Section 148 in the name of a deceased assessee are valid, whether such a jurisdictional defect can be cured on the ground that notices were sent to the email address of the legal heir, and whether the assessment order framed pursuant to such invalid notice can be sustained.

Petitioner’s Arguments

The petitioner contended that issuance of notice under Section 148 in the name of a deceased person is void ab initio and strikes at the root of jurisdiction of the Assessing Officer. It was argued that once the Department had accepted the petitioner as the legal heir, proceedings, if any, could have been initiated only against the legal representative in accordance with law. The petitioner submitted that all subsequent proceedings, including the assessment order, were liable to be quashed.

Respondent’s Arguments

The Revenue did not dispute that notices and the assessment order were issued in the name of the deceased assessee. However, it was argued that since the notices were sent to the correct email address of the petitioner, the petitioner was aware of the proceedings and could not claim prejudice or ignorance.

Court Order / Findings

The Delhi High Court rejected the contention of the Revenue and held that the defect went to the very root of jurisdiction. The Court observed that no proceedings can be instituted against a deceased assessee in their name. Issuance of a valid notice under Section 148 is a jurisdictional requirement, and absent such a notice, the Assessing Officer lacks authority to assume jurisdiction for reopening the assessment.

The Court noted that although the petitioner had already been registered as the legal representative, no notice was issued to him in that capacity. The mere fact that notices were sent to the petitioner’s email address could not cure the fundamental illegality of issuing notices and framing assessment in the name of a deceased person.

Important Clarification

The Court clarified that issuance of a notice under Section 148 is at the root of jurisdiction and any defect therein cannot be overlooked. Proceedings initiated against a deceased assessee are null and void, notwithstanding knowledge of proceedings by the legal heir. However, the Court clarified that the Revenue is not precluded from initiating fresh proceedings in accordance with law, if otherwise permissible.

Final Outcome

The writ petition was allowed. The Delhi High Court set aside the assessment order dated 30.03.2022, the consequential demand notice, and all notices issued in the name of the deceased assessee for Assessment Year 2014–15. It was clarified that the Assessing Officer may initiate fresh proceedings in accordance with law, if otherwise permissible.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1769676720_LAXMIDEVISINCEDECEASEDTHROUGHLEGALHEIRNARENDRAMANNVsASSISTANTCOMMISSIONERINCOMETAXDEPARTMENT.pdf

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