Facts of the Case

The petitioner, Dharmendra Deo Mishra, is the legal heir of Late Smt. Kamal Mishra, who expired on 18 April 2017. The death of the original assessee was duly intimated to the Income Tax Department on 28 March 2018.

Despite such intimation, the Income Tax Department issued a notice dated 20 July 2022 under Section 148 of the Income-tax Act, 1961 in the name of the deceased assessee, proposing to reopen the assessment.

Aggrieved by the initiation of reassessment proceedings against a deceased person, the petitioner approached the Delhi High Court. The writ petition was heard as part of a batch of matters raising identical issues relating to reassessment notices issued to deceased assessees.

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 representative in accordance with Section 159 of the Income-tax Act.

Petitioner’s Arguments

  • Issuance of a notice under Section 148 to a dead person is a jurisdictional defect, rendering the reassessment proceedings void ab initio.
  • Once the death of the assessee had been duly intimated, the Revenue was statutorily required to proceed only by invoking Section 159 and issuing notice to the legal heir.
  • Such a fundamental defect cannot be cured under Section 292B, as it goes to the root of jurisdiction.
  • Continuation of proceedings against a non-existent person reflects complete non-application of mind.

Respondent’s Arguments

  • The statute empowers the Department to continue or initiate proceedings against legal representatives of a deceased assessee.
  • Reassessment proceedings should not fail merely on technical grounds.
  • The Department retained the authority to assess the income of the deceased through legal heirs.

Court Order / Findings

  • A notice under Section 148 is a jurisdictional notice, and issuance of such notice to the correct person is a sine qua non for valid assumption of jurisdiction.
  • A notice issued in the name of a deceased assessee is null and void, even if the PAN remains active.
  • Section 159 permits assessment or reassessment against legal representatives, but such proceedings can be undertaken only after issuing a formal notice to the legal heir.
  • Section 292B does not cure issuance of notice to a dead person, as the defect is substantive and not procedural.
  • The Revenue’s failure to invoke Section 159 and formally place the legal representative on notice renders the reassessment proceedings unsustainable.

Important Clarification

The Court clarified that although Section 159 enables assessment or reassessment of the income of a deceased assessee through legal representatives, strict compliance with jurisdictional requirements is mandatory. Issuance of notice to the legal heir is not a procedural formality but a substantive legal requirement, and reassessment proceedings cannot be sustained without fulfilling this condition.

Final Outcome

The writ petition was allowed. The Delhi High Court quashed the notice dated 20 July 2022 issued under Section 148 along with all consequential proceedings, holding them 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 strict compliance with statutory requirements.

Link to download the order - https://www.mytaxexpert.co.in/uploads/1772176013_DHARMENDRADEOMISHRALEGALHEIROFLATESMT.KAMALMISHRAVsINCOMETAXOFFICERWARD711NEWDELHIORS..pdf  

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