Reassessment – Death of assessee – Validity of notice of reassessment – Sections 147, 148, 159, 292BB – Notice issued to deceased person is not valid – Not a defect curable by section 292BB – Representative assessee – Legal representative – Scope of section 159 – No legal requirement that legal representatives should report death of assessee to income-tax department

21. Savita Kapila vs. ACIT [2020] 426 ITR 502 (Del.) Date of order: 16^th July, 2020 A.Y.: 2012-13

Reassessment – Death of assessee – Validity
of notice of reassessment – Sections 147, 148, 159, 292BB – Notice issued to
deceased person is not valid – Not a defect curable by section 292BB –
Representative assessee – Legal representative – Scope of section 159 – No
legal requirement that legal representatives should report death of assessee to
income-tax department

The assessee,
‘MPK’, expired on 21^st December, 2018. A notice dated 31^st
March, 2019 u/s 148 was issued in his name. The notice could not be served on
‘MPK’. Nor was it served on his legal representatives. An assessment order was
passed in the name of one of his legal representatives on 27^th
December, 2019.

The Delhi High
Court allowed the writ petition filed by the legal representative to challenge
the notice and the order and held as under:

‘i)    The issuance of a notice u/s 148 is the
foundation for reopening of an assessment. Consequently, the sine qua
non for acquiring jurisdiction to reopen an assessment is that such notice
should be issued in the name of the correct person. This requirement of issuing
notice to the correct person and not to a dead person is not merely a
procedural requirement but a condition precedent to the notice being valid in
law.

ii)    Section 159 applies to a situation where
proceedings are initiated or are pending against the assessee when he is alive,
and after his death the legal representative steps into the shoes of the
deceased-assessee. There is no statutory requirement imposing an obligation
upon the legal heirs to intimate the death of the assessee.

iii)   Issuance of notice upon a dead person and
non-service of notice does not come under the ambit of mistake, defect or
omission. Consequently, section 292B does not apply. Section 292BB is
applicable to an assessee and not to the legal representatives.

iv)   The notice dated 31^st March, 2019
u/s 148 was issued to the deceased-assessee after the date of his death, 21^st
December, 2018, and thus inevitably the notice could never have been served
upon him. Consequently, the jurisdictional requirement u/s 148 of service of
notice was not fulfilled.

v)   No notice u/s 148 was ever issued to the
petitioner during the period of limitation and proceedings were transferred to
the permanent account number of the petitioner, who happened to be one of the
four legal heirs of the deceased-assessee by letter dated 27^th
December, 2019. Therefore, the assumption of jurisdiction qua the
petitioner for the relevant assessment year was beyond the period prescribed
and, consequently, the proceedings against the petitioner were barred by
limitation in accordance with section 149(1)(b)’.