Gujarat High Court
Bhaveshbhai Gopalbhai Patel vs Income Tax Officer, Ward 3(3)(1) on 27 June, 2023
Author: Vipul M. Pancholi
Bench: Vipul M. Pancholi
C/SCA/7964/2023 ORDER DATED: 27/06/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7964 of 2023
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BHAVESHBHAI GOPALBHAI PATEL
Versus
INCOME TAX OFFICER, WARD 3(3)(1)
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Appearance:
MR ASHUTOSH S DAVE(8865) for the Petitioner(s) No. 1
MR JYOTINDRASINH J VALA(10975) for the Petitioner(s) No. 1
MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE VIPUL M. PANCHOLI
and
HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 27/06/2023
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE DEVAN M. DESAI) [1] By way of the present petition filed under Articles 226, 14 and 19(1)(g) of the Constitution of India, the petitioner has prayed for the following reliefs:
"7 The petitioner, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or appropriate writ, direction or order and be pleased to;
(a) Quash and set aside the impugned order and the notice dated 24.03.2023 passed/issued under section 148A and section 148 of the Act at Page 1 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 ANNEXURE A by declaring that the proceedings in the present set of facts initiated against the dead person is non-est and void-ab-initio;
(b) Pending admission, hearing and final disposal of the present application, to stay the operation, implementation and execution of impugned notice dated 24.03.2023 issued by the Respondent at ANNEXURE A;
(c) Any other or further relief deemed just and proper be granted in the interest of justice;
(d) Cost of the present petition.
[2] Heard the learned advocate Mr.Ashutosh Dave for the petitioner and learned advocate Mr.Hirak Shah for learned advocate Mrs. Kalpna Raval appearing for the respondent.
[3] Rule. Learned advocate Mr.Hirak Shah waives service of notice of rule for and on behalf of respondent. [4] At the request of learned advocates for the parties, the present petition has been taken-up for final hearing.
[5] Learned advocate for the petitioner has submitted that the deceased - assessee was issued a Page 2 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 notice under Section 148A(a) of the Income Tax Act, 1961 on 09.02.2023 for the Assessment Year 2016-17. Learned advocate for the pertioner further submits that after issuance of the said notice dated 09.02.2023, the petitioner immediately registered on the income tax portal, as an heir of deceased Assessee and thereafter on 03.03.2023, the petitioner conveyed to the respondent authority via income tax portal that the deceased - assessee namely Bhaveshbhai Gopalbhai Patel has expired on 22.05.2018 and requisite details were provided to the respondent.
5.1 It is submitted by the learned advocate for the petitioner that in the case of Kundanben Bhaveshbhai Patel, mother of the present petitioner, similar type of notice was issued by the revenue and the revenue by order passed under Section 148A(d) of the Income Tax Act, 1961 on 29.03.2023, dropped the proceedings by observing that it is not a fit case to issue notice under Section 148A of the Income Tax Act, 1961 for the Assessment Year 2016-17. However, the revenue issued the impugned notice in the name of the deceased person for the same Assessment Year.
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C/SCA/7964/2023 ORDER DATED: 27/06/2023 5.2 It is further submitted that the death certificate of the deceased - assessee was also submitted by the petitioner. However, on 03.03.2023, the request of the petitioner was rejected by the revenue. Another request was again made by the petitioner on 10.03.2023, however, the second request was also rejected by the revenue. The respondent thereafter proceeded with the proceedings and the impugned order under Section 148A(d) of the Act was passed on 24.03.2023 without having considered the factum of death of the assessee. 5.3 It is also submitted by learned advocate for the petitioner that the reopening as well as the initiation of the proceedings against the dead person is null and void and against the provisions of law. It is further submitted by learned advocate for the petitioner that the petitioner had never taken part in the proceedings of the reassessment which triggered upon by virtue of a notice dated 09.02.2023. Learned advocate for the petitioner has also relied upon the decision of the Co-ordinate Bench of this Court in the case of Bachuji Balaji Thakor Vs. Income- tax Officer reported in (2023) 146 taxmann.com 440 (Gujarat) , wherein the similar facts were involved in that case. Page 4 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023
C/SCA/7964/2023 ORDER DATED: 27/06/2023 [6] Per contra, learned advocate for the respondent has relied upon the contentions and averments made in the Affidavit-in-reply and mainly contended that the petitioner has an alternative efficacious remedy available under the law. It is further submitted by learned advocate for the respondent that the assessment pursuant to the said notice is yet to be framed. It is also submitted by the learned advocate for the respondent that the notice under Section 148A for the Assessment Year 2016-17 is legal and valid. The factum of death of late Bhaveshbhai was never informed to the Revenue prior to issuance of impugned notice. Therefore, all the contentions raised by the petitioner, are baseless and has prayed for dismissal of the petition.
[7] The issues involved in the present case is no more res-integra in light of the decision of Bachuji Balaji Thakor (supra), wherein para 5, this Court has observed as under:-
"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 Page 5 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 Special Civil Application No. 16323 of 2019 decided on 1.8.2022.
5.1 Extracting the relevant part of the decision in 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 Page 6 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 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, "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 Page 7 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 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 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, reverting back to the facts of the present case, Bachuji Balaji Thakor died on 22.10.2018. Notice under section 148 of the Income Page 8 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 Tax Act came to be issued on 31.3.2021 and the Assessment Order was passed under section 147 of the Act read with section 144 of the Act on 23.3.2022. The total income of the said deceased assessee was determined to be Rs. 7,70,00,000/- and the tax demand of Rs. 4,47,68,708/- was raised.
5.3 Not only that the assessment order came to be passed after four years from the death of the assessee, noticeably it transpires from the record that on 22nd March, 2022, the legal heir of the deceased Bachuji Balaji Thakor intimated the Income Tax authorities about the death of the assessee. The same was received by the authority concerned on 23.3.2022. On the very date, the order of Assessment came to be passed. Request of the heir of the deceased assessee prayed as above, was rejected by the authority. In the meantime, the Assessment Order was passed. Be as it may. The fact which stands established is that the authority concerned had the knowledge about the death of the assessee, yet it proceeded to pass the assessment order without paying heed to the intimation given by the heir as above.
[8] In the present case, the assessee Bhaveshbhai Gopalbhai Patel has expired on 22.05.2018 and when the notice under Section 148A(a) dated 09.02.2023 came to be issued, the petitioner vide reply dated 03.03.2023 specifically intimated about the death of Bhaveshbhai Gopalbhai Patel and alongwith the said objection, the petitioner also submitted death certificate of the deceased Page 9 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 Bhaveshbhai Gopalbhai Patel. However, without considering the aforesaid facts, the said notice under Section 148A(a) was culminated into the order under Section 148A(d) of the Income Tax Act, 1961 on 24.03.2023. It is a settled principle of law that any proceedings initiated against the dead person is nullity, much less, any order passed against the dead person is null and void. Issuance of a notice or initiation of re- assessment proceedings against the dead person is null and void and the said notice as well as order could not be sustained against the dead assessee. The petitioner has never taken part in the proceeding. This crucial aspect cannot be given a go by.
[9] The impugned notice was issued in the name of dead person which is unenforceable and invalid. It is well settled principle that any proceedings against dead person is a nullity. Pursuant to such invalid and unenforceable notice, any order passed below the impugned notice becomes illegal and unenforceable and it is required to be set aside.
[10] In the totality of facts, the present petition Page 10 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023 C/SCA/7964/2023 ORDER DATED: 27/06/2023 deserves to be allowed. Accordingly, notice dated 24.03.2023 issued under Section 148A and under Section 148 of the Income Tax Act, 1961, are hereby quashed and set aside and the order passed under Section 148A(d) of the Income Tax Act, is also hereby quashed and set aside. This petition is hereby allowed. Rule is made absolute.
(VIPUL M. PANCHOLI, J) (D. M. DESAI,J) MANOJ Page 11 of 11 Downloaded on : Tue Jul 04 20:30:37 IST 2023