Karnataka High Court
Suman Vijay Ambati vs Income Tax Officer Officer on 22 July, 2025
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NC: 2025:KHC-K:4121
WP No. 200780 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 22ND DAY OF JULY, 2025
BEFORE
THE HON'BLE MR. JUSTICE M.I.ARUN
WRIT PETITION NO.200780 OF 2025 (T-IT)
BETWEEN:
SUMAN VIJAY AMBATI
LEGAL HEIR OF SAIBABAGOUDA
GANGANAGOUDA PATIL,
AGED ABOUT 47 YEARS,
D/O LATE SAIBABAGOUDA GANGANAGOUDA PATIL,
NO.17, SHREE SANMAN CHS, JUHU LINK ROAD,
ANDHERI WEST, AZAD NAGAR SO
MUMBAI, MAHARASHTRA-400 053.
...PETITIONER
(BY SRI. SUDHEENDRA B. R., ADVOCATE)
Digitally signed
AND:
by VARSHA N
RASALKAR 1. INCOME TAX OFFICER
Location: HIGH WARD 1 & TPS, AAYAKAR BHAVAN,
COURT OF
KARNATAKA NEAR ALL INDIA RADIO, ATHANI ROAD,
VIJAYAPURA, KARNATAKA-586 104.
2. PRINCIPAL COMMISSIONER OF INCOME TAX,
CR BUILDING, NAVANAGAR,
HUBBALLI, KARNATAKA-580 025.
3. NATIONAL FACELESS ASSESSMENT CENTRE,
REP. BY ADDITIONAL/JOINT/DEPUTY/
ASSISTANT COMMISSIONER OF INCOME-TAX
/ INCOME-TAX OFFICER,
INCOME-TAX DEPARTMENT,
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NC: 2025:KHC-K:4121
WP No. 200780 of 2025
HC-KAR
MINISTRY OF FINANCE,
ROOM NO.401, 2ND FLOOR, E-RAMP,
JAWAHARLAL NEHRU STADIUM,
DELHI-110 003.
...RESPONDENTS
(BY SRI. THIRUMALESH M., ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
ISSUE A WRIT, ORDER OR DIRECTION(A) QUASHING THE
NOTICE UNDER SECTION 148A(B) DATED 19.03.2022 BEARING
DIN ITBA/AST/F/148A(SCN)/2021-22/1041030448(1) ISSUED
BY THE RESPONDENT NO.1 (ANNEXURE B1) (B) QUASHING
THE ORDER UNDER SECTION 148A(D) DATED 6.4.2022
BEARING DIN ITBA/AST/F/148A/2022-23/1042581333(1)
ISSUED BY THE RESPONDENT NO.1 (ANNEXURE B2) (C)
QUASHING THE NOTICE UNDER SECTION 148 DATED 7.4.2022
BEARING DIN ITBA/AST/S/148 1/2022-23/1042600609(1)
ISSUED BY THE RESPONDENT NO.1 (ANNEXURE B3) (D)
QUASHING THE ASSESSMENT ORDER PASSED UNDER
SECTION 147 RWS 144 RWS 144B OF THE INCOME TAX ACT,
1961 DATED 5.2.2024 BEARING DIN ITBA/AST/S/147/2023-
24/1060521587(1) ISSUED BY THE RESPONDENT NO.3
(ANNEXURE D1) E) QUASHING THE COMPUTATION SHEET
DATED 5.2.2024 BEARING DIN ITBA/AST/S/183/2023-
24/1060521682(1) ISSUED BY THE RESPONDENT NO.3
(ANNEXURE D2), F) QUASHING THE NOTICE OF DEMAND
UNDER SECTION 156 DATED 5.2.2024 BEARING DIN
ITBA/AST/S/156/2023-24/1060521652(1) ISSUED BY THE
RESPONDENT NO.3 (ANNEXURE-D3) G) QUASHING THE
NOTICE FOR PENALTY UNDER SECTION 274 RWS 271AAC(1)
OF THE INCOME TAX ACT, 1961 DATED 5.2.2024 BEARING DIN
ITBA/PNL/S/271AAC(1)/2023-24/1060521714(1) ISSUED BY
THE RESPONDENT NO.3 (ANNEXURE E1) H) QUASHING THE
PENALTY ORDER UNDER SECTION 271AAC(1) DATED
18.6.2024 BEARING DIN ITBA/PNL/F/271AAC(1)/2024
25/1065705158(1) ISSUED BY THE RESPONDENT NO.3
(ANNEXURE-F1) I) QUASHING THE COMPUTATION SHEET
DATED 18.6.2024 BEARING DIN 2024201840416538892T
ISSUED BY THE RESPONDENT NO.3 (ANNEXURE F2) J)
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NC: 2025:KHC-K:4121
WP No. 200780 of 2025
HC-KAR
QUASHING THE NOTICE OF DEMAND UNDER SECTION 156
DATED 18.6.2024 BEARING DIN ITBA/PNL/S/156/2024-
25/1065701893(1) ISSUED BY THE RESPONDENT NO.3
(ANNEXURE F3) AND ETC.,
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS
UNDER:
CORAM: HON'BLE MR. JUSTICE M.I.ARUN
ORAL ORDER
(PER: HON'BLE MR. JUSTICE M.I.ARUN) The petitioner is the daughter and legal heir of one late Sri.Saibabagouda Ganganagouda Patil. He is said to have expired on 24.07.2020. Petitioner is said to have inherited certain assets belonging to her late father. The respondents initiated proceedings under the provisions of Income Tax Act, 1961 for evasion of tax against late father of the petitioner by issuing show cause notices and the impugned orders have been passed. The notices and the impugned orders have been challenged on the ground that proceedings cannot be initiated under the provisions of Income Tax Act, 1961 posthumously against a dead person.
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2. Reliance is also placed on the judgment of a Division Bench of this Court in W.A.No.1407/2024 dated 22.01.2025.
3. Paragraph Nos.3 of the said judgment reads as under:
"3. Having heard the learned counsel appearing for the parties and having perused the Appeal papers, we decline indulgence in the matter broadly agreeing with the learned Single Judge that the Assessment Order and other proceedings taken up against the deceased are all null & void. The proceedings initiated against the Assessee by issuing notice after his demise cannot be continued against his/her legal representative. Had the proceedings been initiated against the Assessee during his life time, they could be continued against the legal representatives of the deceased Assessee. However, that is not the factual position here. Therefore, the order of the learned Single Judge cannot be faltered in quashing what were challenged before him.
3.1 The strong reliance placed by the learned Panel Counsel on the text of Sec.159(2)(a)(b)&(c) of the 1961 Act to alter the impugned judgment does not come to his aid. The text of Sec.159 in its entirety is reproduced for ease of reference:-5-
NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR "159. Legal representatives.
(1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.
(2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section
147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),-
(a)any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased;
(b)any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and
(c)all the provisions of this Act shall apply accordingly.-6-
NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR (3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.
(4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with.
(5)The provisions of sub-section (2) of section 161, section 162 and section 167 shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative.
(6)The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability."
3.2 The above provisions are as clear as Gangetic Waters; they inter alia indicate with clarity that the proceedings initiated against the Assessee during his lifetime can be continued against his Legal Representatives, and their liability could be co- extensive with the value of the estate of the deceased.
-7-NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR They do not admit the kind of interpretation sought to be placed by the Revenue to the effect that initiation of proceedings can be made against the deceased Assessee and orders passed therein would bind or can be enforced against the Legal Representatives. Without straining the language of the said provision, a construction in variance cannot be countenanced. We hasten to add that had the proceedings been initiated during the lifetime of the Assessee, but continued against his Legal Representatives, that could have been admissible in the scheme of the Act. However, that is not the case. If the Parliament intended that, a proceeding of the kind can be initiated against the Assessee posthumously and orders passed therein should bind his Legal Representatives, the language of the provision would have been much different. There is a strong presumption that the Parliament fully understands what public policy needs to be enacted and the text of language to be employed for such enactment. English is a foreign language, is a poor ground of rebuttal, especially when a plethora of legislations are in that language, although along with Hindi.
3.3 The second contention of the learned Panel Counsel that liberty ought to have been reserved to the Revenue for initiating fresh proceedings against the Legal Representatives of the Assessee, once -8- NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR proceedings taken up against the deceased Assessee are set at naught, again does not impress us even in the least. This contention is structured on a premise that the Legal Representatives i.e., persons who hold estate of the deceased Assessee in their hands are under a legal obligation to inform the Revenue as to the death of the Assessee. To support such a premise, no provision of law in general and no section of 1961 Act in particular are brought to our notice. Clause (b) of Section 159(2) enables proceedings being taken against Legal Representatives of the deceased, is true. However, that is subject to such proceedings being capable of being taken against the deceased. If the statutorily prescribed time limit has expired as against the deceased himself, as has happened in this case then no proceedings can be taken against his LRs. This view gains support from Kanga and Palkivala's The Law and Practice of INCOME TAX, 11th Edition (LexisNexis), Page - 2768-69. The same is as under:
"Assessment on Legal Representative.- If the assessee died before the proceedings for assessment were completed, it is incumbent on the AO to bring the legal representative of the deceased on record and proceed from the stage where it was left at the time of death of the deceased.?" Where the death occurs between the conclusion of the hearing and the making of the assessment order, the non-issuance of notices to the legal -9- NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR representatives does not invalidate the order, and at best it is a defect liable to be corrected. This principle would not apply when the assessee is already dead at the time of issuance of the notice. If, on the date of death of the deceased, a return of income had not been made under s 139(1) and a notice under ss 142(1)(i) or 148, as the case may be, had not been served on him, the AO should first issue the notice under s 142(1)(i) or 148 to the legal representative of the deceased and then proceed to assess the income of the deceased in the hands of the representative as if the representative were the assessee. In other words, notice cannot be issued in the name of a dead person and such notice would be null and void, and proceedings cannot thereafter be continued against the legal representatives. Notice under the relevant sections should be, issued qua the legal representative within limitation period prescribed under the relevant section under which notice is issued."
3.4 Learned Single Judge at Paragraph Nos. 9, 10 & 11 of the impugned judgment, has rightly observed as under:
"In light of the above, question of continuing with fresh proceedings against the deceased which liberty is sought of by the learned counsel for the revenue would be permissible only if proceedings could have been taken against the deceased if he had survived. The
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NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR present proceedings under Section 148 of the act are as regards the assessment year 2016-17, the time limit for the proceedings under Section 148 would be in terms of Section149(1)(b) proviso. In terms of the proviso there is a bar for issuance of notice under Section 148 in a case for a relevant assessment year before 01.04.20121 and in the present case as the assessment year 2016-17 falls within the applicability of the proviso, and proceedings would have been initiated within 31.03.2023 within the outer limit of 6 years from the end of assessment year 2016-17 as against the legal representative. Accordingly, at this stage while setting aside the notice under Section 148 of the Act, question of granting liberty would be contrary to the mandate of time prescribed under Section 149(1) (b) proviso."
4. Learned counsel for respondents is not in a position to dispute the above mentioned facts and the proposition of law.
5. Under the circumstances, the proceedings initiated against the dead person in the instant case is liable to be set aside.
6. Hence, the following:
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NC: 2025:KHC-K:4121
WP No. 200780 of 2025
HC-KAR
ORDER
i. Writ petition is allowed.
ii. The notice dated 19.03.2022 bearing DIN ITBA/ AST/ F/ 148A(SCN)/ 2021-22/ 1041030448(1) (Annexure-B1 to the writ petition) issued by the respondent No.1;
Order dated 06.04.2022 bearing DIN ITBA/AST/F/148A/2022-23/ 1042581333 (1) (Annexure-B2 to the writ petition) issued by the respondent No.1; Notice dated 07.04.2022 bearing DIN ITBA/AST/S/ 148_1/ 2022-23/1042600609(1) (Annexure-B3 to the writ petition) issued by Respondent No.1; Assessment order dated 05.02.2024 bearing DIN ITBA/AST/ S/147/2023-24/1060521587(1) (Annexure-
D1 to the writ petition) issued by the respondent No.3; Computation sheet dated 05.02.2024 bearing DIN ITBA/AST/S/183/
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NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR 2023-24/1060521682(1) (Annexure-D2 to the writ petition) issued by the respondent No.3; Notice of demand dated 05.02.2024 bearing DIN ITBA/AST/S/156 /2023-24/ 1060521652(1) (Annexure-D3 to the writ petition) issued by the respondent No.3;
Notice for penalty dated 05.02.2024 bearing DIN ITBA/PNL/S/271AAC (1)/2023- 24/1060521714(1) (Annexure-E1 to the writ petition) issued by the respondent No.3; Penalty order dated 18.06.2024 bearing DIN ITBA/ PNL/ F/ 271AAC(1)/ 2024-25 / 1065705158(1) (Annexure-F1 to the writ petition) issued by the respondent No.3; Computation sheet dated 18.06.2024 bearing DIN 2024201840416538892T (Annexure-F2 to the writ petition) issued by the respondent No.3; and the Notice of demand dated 18.06.2024 bearing DIN
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NC: 2025:KHC-K:4121 WP No. 200780 of 2025 HC-KAR ITBA/PNL/ S/156/2024-25/ 1065701893(1) (Annexure-F3 to the writ petition) issued by the respondent No.3 are hereby quashed.
Sd/-
(M.I.ARUN) JUDGE VNR List No.: 1 Sl No.: 48 CT:SI