Facts of the Case

The petitioner, Chanchal Singh, is the legal heir of Late Rajeshwari Singh, who passed away on 24 May 2021. The fact of death was duly intimated to the Income Tax Department on 27 July 2021.

Despite such intimation, the Income Tax Department issued a notice dated 29 July 2022 under Section 148 of the Income-tax Act, 1961 in the name of the deceased assessee for initiation of reassessment proceedings.

Aggrieved by the initiation of reassessment proceedings against a deceased person, the petitioner approached the Delhi High Court by way of a writ petition. The matter was heard along with several connected petitions raising identical issues.

 Issues Involved

Whether reassessment proceedings initiated by issuing a notice under Section 148 in the name of a deceased assessee, despite prior intimation of death to the Department, are valid in law, and whether such proceedings can be sustained without issuing notice to the legal representatives under Section 159 of the Income-tax Act.

 Petitioner’s Arguments

The petitioner submitted that issuance of a notice under Section 148 to a dead person is a jurisdictional defect rendering the entire reassessment proceedings void ab initio. It was contended that once the death of the assessee had been intimated, the Revenue was statutorily required to issue notice to the legal representative in accordance with Section 159.

Respondent’s Arguments

The Revenue contended that Section 159 of the Act empowers the Department to proceed against legal representatives and that reassessment proceedings should not be quashed merely on technical grounds. It was argued that the statute permits continuation or initiation of proceedings against legal heirs and that the reassessment should therefore be upheld.

Court Order / Findings

  • A notice under Section 148 is a jurisdictional notice, and issuance of such notice to the correct person is a condition precedent for valid assumption of jurisdiction.
  • A notice issued in the name of a deceased assessee is null and void, irrespective of whether the PAN remains active.
  • Section 159 permits assessment or reassessment against legal representatives, but such proceedings must be formally initiated by issuing notice to the legal heirs.
  • Section 292B does not cure the defect, as issuance of notice to a dead person is not a procedural irregularity but a substantive illegality.
  • The Revenue’s action reflected non-application of mind, particularly when the death had already been intimated.

Important Clarification

The Court clarified that while Section 159 of the Income-tax Act enables assessment or reassessment of the income of a deceased person through legal representatives, strict compliance with jurisdictional requirements is mandatory. Issuance of notice to the legal heirs is not a mere formality but a substantive safeguard ensuring the legality and validity of reassessment proceedings.

Final Outcome

The writ petition was allowed. The Delhi High Court quashed the notice dated 29 July 2022 issued under Section 148 in the name of the deceased assessee, holding the reassessment proceedings to be void ab initio. The Court, however, granted liberty to the Revenue to proceed afresh against the legal heirs, if otherwise permissible in law and in accordance with statutory requirements.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1772175937_CHANCHALSINGHLEGALHEIROFRAJESHWARISINGHVsINCOMETAXOFFICERWARD361DELHI.pdf 

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