Gujarat High Court
Laxmiben Ravji Rabadia Lr Of Late Ravji ... vs Income Tax Officer Ward -4, Gandhidham ... on 27 March, 2023
Author: N.V.Anjaria
Bench: N.V.Anjaria
NEUTRAL CITATION
C/SCA/3421/2022 ORDER DATED: 27/03/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3421 of 2022
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LAXMIBEN RAVJI RABADIA LR OF LATE RAVJI HARJI RABADIA
Versus
INCOME TAX OFFICER WARD -4, GANDHIDHAM (BHUJ 2) OR HIS
SUCCESSOR
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Appearance:
MR SN DIVATIA(1378) for the Petitioner(s) No. 1
MR. KARAN SANGHANI, ADV. WITH MRS KALPANAK RAVAL(1046) for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 27/03/2023
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned advocate Mr. S. N. Divatia for the petitioner and learned advocate Mr. Karan Sanghani with learned advocate Ms. Kalpana Raval for the respondent department.
2. By filling this petition under Article 226 of the Constitution, the petitioner has prayed to set aside notice dated 26.3.2021 issued by the respondent proposing to reopen the completed assessment in respect of Assessment Year 2016-2017. Other related prayers are also made.
3. Impugned notice dated 26.3.2021 under section 148 of the Income Tax Act, 1961 for the Assessment Year 2016-2017 came to be issued to one Ravji Harji Rabadia. The petitioner Laxmiben Ravji Rabadia is legal Page 1 of 7 Downloaded on : Sun Sep 17 23:03:12 IST 2023 NEUTRAL CITATION C/SCA/3421/2022 ORDER DATED: 27/03/2023 undefined heir of the late Ravji Harji Rabadia. The said Ravji Harji Rabadia Died on 10.4.2017. He was regularly assessed to tax under the Permanent Account Number. He did not file return of income in respect of the year under consideration. As the notice was issued to person who was dead, the petitioner informed the authorities by letter dated 13.7.2021 that she was wife of the said Ravji Harji Rabadia, who died on 10.04.2017. The death of the said Ravji Harji Rabadia was evidenced by death certificate produced on record by the petitioner.
3.1 It was the contention and main plank of challenge that notice under section 148 of the Act was issued to a dead person and that the Assessing Officer was informed about the death of deceased assessee. It was submitted that since the proceedings were against dead person, they were nullity. Thereafter, the petitioner approached this court by filling present Special Civil Application.
4. The respondent department filed affidavit-in-reply to contend that the death of said Ravji Harji Rabadia was not intimated nor the PAN was terminated. It was submitted that the notice was competent.
5. The factum of death of the person sought to be issued notice under section 148 of the Act is not in dispute. It also transpires from the record, in particular from communication dated 13.7.2021, that the petitioner wife and the heir of the deceased, had intimated about the death of said Ravji Harji Rabadia by sending the death certificate to the competent authority. The competent authority was requested to take note of the fact and close the proceedings.
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6. The issue that the assessment proceedings against a dead person are not competent and that the notice or orders issued by the Assessing Officer to a dead person are illegal and not liable to be acted upon, unless the heir has participated in the proceedings or submitted to the jurisdiction to the Assessing Officer taking certain positive steps, is no longer res integra.
6.1 Similar issue came up for consideration before the court in Mitesh Goradhandas Somaiya vs. Income Tax Officer Ward 6(1)(1) being Special Civil Application No. 5870 of 2022, in which the court relied on the decision of the Divsiion Bench of this court. The reasons recorded and conclusion arrived at in Mitesh Goradhandas Somaiya (supra), squarely apply to the facts of this case.
6.2 The following observations are the reproduction from order dated 1.8.2022 in Mitesh Goradhandas Somaiya (supra), which would apply to the case present case and the same reasons and conclusion shall apply to govern the present case also.
"5. The only issue to be considered in the present petition is whether the Assessment proceedings are maintainable against the dead person. Similar question had come up for consideration before this court in Himadri Kandarp Mehta L/H of Late Kandarp Yashshvibhai Mehta vs. The Income Tax Officer being Special Civil Application No. 16323 of 2019 decided on 1.8.2022.
Page 3 of 7 Downloaded on : Sun Sep 17 23:03:12 IST 2023 NEUTRAL CITATION C/SCA/3421/2022 ORDER DATED: 27/03/2023 undefined 5.1 Extracting the discussion from Himadri Kandarp Mehta
(supra) which would apply and cover the present case, "5. The Division Bench of this Court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3) [(420) ITR 226], addressed the very issue. The Court considered various decisions of the Supreme Court and the High Court, touching the aspects of the issue, held that there cannot be any assessment against a dead person. In that case also, notice was issued to the dead assessee under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the "Act").
5.1 While holding that the proceedings would be nullity against the dead assessee, the rider was provided that in cases where legal representatives participate in the assessment or re- assessment proceedings, the proceedings may be maintained and continued. It was at the same time held that mere intimation by the legal representative to the assessing officer that the noticee is dead, would not amount to legal representation on participation in that proceedings.
5.2 In Urmilaben Anirudhhasinji Jadeja (supra), while the revenue raised various contentions seeking a proposition that the proceedings against the dead assessee would be maintained, the Court negatived them all.
5.3 One of the contention was based on Section 292B of the Act. The said provision contemplates that the notice shall be deemed to be valid in certain circumstances. It mentions that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to assessment or re-assessment, it shall be deemed that a notice required to be served under the Act has been duly served upon him. Such, it is provided, shall be precluded by taking any objection about the service of the service of the notice and manner of the service.
5.4 The Division Bench held that the said provision would not apply in cases where notices are gone to the dead assessee and the proceedings are started against a dead assessee. It was observed and held in paragraph 23 thus, Page 4 of 7 Downloaded on : Sun Sep 17 23:03:12 IST 2023 NEUTRAL CITATION C/SCA/3421/2022 ORDER DATED: 27/03/2023 undefined "The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. To put it in other words, the notice should be in conformity with and in accordance with the intent and purpose of the Act. In our opinion, a case in which notice is issued to a dead person could be termed as nullity. It is something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor."
5.4.1 The continuation of proceedings pursuant to notice under Section 148 of the Act was held to be without authority of law by the Court stating thus -
"...the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained."
5.5 Thus, the law is well settled that unless the heirs and legal representatives of the deceased assessee could be said to have been submitted to the jurisdiction of the assessing officer and have participated in the assessment or re-assessment proceedings, notice to the dead assessee and commencement of assessment or reassessment proceedings against dead person is rendered null and void.
5.6 The attempt on the part of the income tax authorities to start proceedings for assessment or re-assessment against the Page 5 of 7 Downloaded on : Sun Sep 17 23:03:12 IST 2023 NEUTRAL CITATION C/SCA/3421/2022 ORDER DATED: 27/03/2023 undefined dead person is viewed not merely as procedural irregularity but it is stated as jurisdictional defect.
5.7 There cannot be an assessment against the dead person. As noticed above, the provisions of Section 292B of the Act are also not applicable and no assessment can be framed against a nonexisting entity or a person who has died."
5.2 In light of the above law, reverting back to the facts of the present case, assessee-Gordhandas Madhavji Somaiya died on 20.08.2019. Notice under section 148 of the Income Tax Act came to be issued on 30.3.2021, that is after about nineteen months from the death of the assessee.
5.3 Noticeably, it transpires from the record that the petitioner herein who happens to be the legal representative of the deceased assessee, intimated to the Income Tax officer concerned on 16.2.2022 by addressing letter that the noticee Gordhandas Madhavji Somaiya had died long back and that the notice was without jurisdiction. The Income Tax authorities did not pay heed to the said intimation.
5.4 The facts of the case did not offer any fact or circumstances to suggest that the legal representative of the deceased assessee in any manner submitted to the jurisdiction of the income tax authorities or in any way participated in the proceedings to persuade the court to hold otherwise. On the contrary, communication dated 16.2.2022 was sent to the Income Tax officer by the legal representative that the noticee Goradhandas Madhavji Somaiya had died.
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6. In view of the above, the present petition deserves to be allowed. It is hereby allowed by holding that the impugned notice, which was against the dead assessee, could not be sustained. Resultantly, the notice dated 30.3.2021 received in the name of Goradhandas Madhavji Somaiya, as a dead person, by the Income Tax department is held to be illegal."
7. Resultantly, the notice dated 26.03.2021 issued by the Income Tax authorities is set aside. The Income Tax authorities shall not proceed against the said deceased assessee. The petition stands allowed accordingly.
(N.V.ANJARIA, J) (NIRAL R. MEHTA,J) C.M. JOSHI Page 7 of 7 Downloaded on : Sun Sep 17 23:03:12 IST 2023