29 Chandreshbhai Jayantibhai Patel vs. ITO.; 413 ITR 276 (Guj) Date of order: 10th
December, 2018 A.Y.: 2011-12
Sections 147, 148,159 and 292B of ITA, 1961 –
Reassessment – Valid notice – Notice issued in name of dead person – Effect of
sections 159 and 292B – Objection to notice by legal representative – Notice
not valid
The
petitioner is the son of the late Mr. Jayantibhai Harilal Patel who passed away
on 24th June, 2015. The AO issued notice u/s. 148 of the Income-tax
Act, 1961 dated 28th March, 2018 in the name of the deceased for
reopening the assessment for the A.Y. 2011-12. In response to the said notice,
the petitioner vide communication dated 27th April, 2018 objected to the
initiation of reassessment proceedings and informed that his father had passed
away on 24th June, 2015 and urged the AO to drop the reassessment
proceedings. The petitioner maintained the objections in the subsequent
proceedings. By an order dated 14th August, 2018, the AO rejected
the objections and held that in the absence of knowledge about the death of the
petitioner’s father, it cannot be said that the notice of reassessment is bad
in law and that the reassessment proceedings may be carried out in the name of
the legal heirs of the late father of the petitioner. Being aggrieved, the petitioner
filed a writ petition before the High Court and challenged the order.
The
Gujarat High Court allowed the writ petition and held as under:
“i) A notice u/s. 148 is a jurisdictional notice
and existence of a valid notice u/s. 148 is a condition precedent for exercise
of jurisdiction by the Assessing Officer to assess or reassess u/s. 147.
ii) Clause (b) of sub-section (2) of section 159
of the Act provides that any proceeding which could have been taken against the
deceased if he had survived may be taken against the legal representative.
Section 292B, inter alia, provides that no notice issued in pursuance of
any of the provisions of the Act shall be invalid or shall be deemed to be
invalid merely by reason of any mistake, defect or omission in such notice if
such notice, summons is in substance and effect in conformity with or according
to the intent and purpose of the Act.
iii) A notice issued u/s. 148 of the Act against a
dead person is invalid, unless the legal representative submits to the jurisdiction
of the Assessing Officer without raising any objection. Therefore, where the
legal representative does not waive his right to a notice u/s. 148, it cannot
be said that the notice issued against the dead person is in conformity with or
according to the intent and purpose of the Act which requires issuance of
notice to the assessee, whereupon the Assessing Officer assumes jurisdiction
u/s. 147 of the Act and consequently, the provisions of section 292B of the Act
would not be attracted.
iv) The case fell within the ambit of section
159(2)(b) of the Act. The notice u/s. 148, which was a jurisdictional notice,
had been issued to a dead person. Upon receipt of such notice, the legal
representative had raised an objection to the validity of such notice and had
not complied with it. The legal representative not having waived the
requirement of notice u/s. 148 and not having submitted to the jurisdiction of
the Assessing Officer pursuant to the notice, the provisions of section 292B of
the Act would not be attracted and hence, the notice u/s. 148 of the Act had to
be treated as invalid.”
