Facts of the Case

The petitioner, Vivek Jain, is the legal representative of Late Mahavir Prasad Jain, who expired on 7 August 2020. The fact of death was duly intimated to the Income Tax Department on 18 March 2021.

Despite such intimation, the Income Tax Department issued a notice dated 29 July 2022 under Section 148 of the Income-tax Act, 1961, seeking to reopen the assessment in the name of the deceased assessee.

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 involving identical issues concerning 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 under Section 159 of the Income-tax Act. 

Petitioner’s Arguments

  • Issuance of a notice under Section 148 to a deceased person is a jurisdictional defect rendering the entire reassessment proceedings void ab initio.
  • Once the death of the assessee had been duly intimated, the Revenue was required to proceed strictly in accordance with Section 159 by issuing notice to the legal representative.
  • Such a fundamental defect cannot be cured by 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 enables continuation or initiation of proceedings against legal representatives of a deceased assessee.
  • The reassessment proceedings should not be invalidated merely on technical grounds.
  • The Department retained the power to proceed against the estate of the deceased. 

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, irrespective of whether the PAN continues to remain active.
  • Section 159 enables assessment or reassessment against legal representatives, but such power can be exercised only after issuing a valid 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 notify the legal representative renders the reassessment proceedings unsustainable.

 Important Clarification

The Court clarified that while Section 159 permits 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 29 July 2022 issued under Section 148 and all consequential proceedings, holding them to be void ab initio. The Court, however, granted liberty to the Revenue to proceed afresh against the legal representative, if otherwise permissible in law and in strict compliance with statutory provisions.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1772176653_VIVEKJAINLEGALREPRESENTATIVEOFLATEMAHAVIRPRASADJAINVsDEPUTYCOMMISSIONEROFINCOMETAXOFFICERCIRCLE281ANR..pdf  

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