Facts of the Case                                                                         

  • The deceased assessee, Late Smt. Rukmani Sehgal, had regularly filed income tax returns.
  • Return for AY 2010–11 was processed normally.
  • The assessee passed away on 17.01.2015.
  • Subsequently, a notice dated 29.03.2017 under Section 148 was issued in the name of the deceased assessee.
  • The petitioner, being the legal representative, challenged the reassessment proceedings.
  • The Revenue later attempted to justify the notice by issuing a “clarification” claiming a typographical error in the “reasons to believe.”

 Issues Involved

  1. Whether a reassessment notice issued under Section 148 to a deceased person is valid in law.
  2. Whether such defect can be cured under Section 292BB of the Act.
  3. Whether reassessment proceedings are valid without issuance of notice under Section 143(2).
  4. Whether “reasons to believe” can be corrected after issuance of notice.

Petitioner’s Arguments

  • The reassessment notice issued to a deceased person is null and void as the Act does not permit such initiation.
  • Proceedings cannot continue without issuing notice to legal representatives as per Section 159.
  • The “reasons to believe” were incorrect and lacked application of mind.
  • The subsequent “clarification” was an attempt to cover up errors.
  • No notice under Section 143(2) was issued, rendering reassessment invalid.
  • Reliance placed on Vipin Walia vs ITO (2016).

Respondent’s Arguments

  • The defect of issuing notice to a deceased person is curable under Section 292BB.
  • Reliance placed on:
    • Sky Light Hospitality LLP v. ACIT (2018)
    • Pankajbhai Rameshbhai Zalavadiya vs Jethabhai Kalabhai Zalavadiya (2017)
  • It was argued that procedural defects should not invalidate assessment.

Court Findings / Judgment

  • Notice issued to a deceased person is invalid and unenforceable.
  • Section 159 permits proceedings against legal representatives only if initiated correctly.
  • The department failed to issue notice to legal representatives within limitation.
  • Section 292BB cannot cure a jurisdictional defect such as notice to a dead person.
  • The Court rejected the Revenue’s argument that the defect was procedural.
  • The “clarification” changing the entity name in reasons to believe was held to be non-genuine and indicative of non-application of mind.
  • Absence of notice under Section 143(2) renders reassessment void.
  • Reliance placed on ACIT v. Hotel Blue Moon (2010).

Important Clarifications by Court

  • Jurisdictional defects (like notice to deceased) are not curable under Section 292BB.
  • Reassessment must strictly comply with statutory provisions.
  • “Reasons to believe” must reflect proper application of mind and cannot be altered later.
  • Legal representatives can only be proceeded against if valid notice is issued to them within limitation. 

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:7125-DB/SRB11112018CW112552017.pdf      

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