Notice Issued to Deceased Person Invalid When Legal Heir Details Available.
Issue: Is a notice issued under Section 148A(b) of the Income-tax Act, 1961, for income escaping assessment, valid when it is addressed to a deceased person, and their legal heir is already registered as such with the Income Tax Department and has filed the deceased’s income tax return?
Facts:
- The assessee was the widow and legal heir of one Mr. Y.
- The assessee had registered herself as the legal heir of the deceased Mr. Y on the Income Tax portal.
- The assessee, in her capacity as the legal heir, had also filed the income tax return of the deceased Mr. Y for the assessment year 2020-21.
- For the assessment year 2019-20, the respondent issued a notice under Section 148A(b) in the name of the deceased husband of the assessee, Mr. Y.
- Aggrieved by this notice, the assessee filed a petition challenging its validity.
Decision: The court held in favor of the assessee. It was established that the impugned notice under Section 148A(b) was indeed issued in the name of Mr. Y, who had already passed away. The court noted that the assessee was already registered as the legal heir of the deceased Mr. Y, and in that capacity, had also filed the income tax return for a subsequent assessment year. Therefore, the court concluded that the impugned notice under Section 148A(b), the order passed under Section 148A(b), as well as the subsequent notice issued under Section 148, were not sustainable as they were issued against a deceased person.
Key Takeaways:
- A notice issued under Section 148A(b) for income escaping assessment is invalid if it is addressed to a deceased person, especially when the Income Tax Department is aware of and has on record the details of the legal heir.
- The registration of a legal heir on the Income Tax portal and the filing of the deceased’s income tax return by the legal heir constitute sufficient information for the department to issue notices to the correct legal representative.
- Issuing notices to a deceased person, despite having information about their legal heir, is a procedural irregularity that can render the notice and subsequent proceedings invalid. The department is expected to take appropriate steps to serve notices on the legal representatives of the deceased assessee.
HIGH COURT OF GUJARAT
Dharmistha Yogesh Joshi
v.
Deputy Commissioner of Income-tax
BHARGAV D. KARIA and D.N. Ray, JJ.
R/SPECIAL CIVIL APPLICATION NO. 16121 of 2024
MARCH 20, 2025
Jignesh P. Parikh for the Petitioner. Varun K. Patel for the Respondent.
ORDER
Bhargav D. Karia, J.- By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:
“7. The Petitioner, therefore, prays that this Hon’ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to:
| (a) | quash and set aside the impugned notices u/s 148A(b) dated 28.03.2023 at Annexure-‘A1’, order u/s 148A(d) dated 24.04.2023 at Annexure-‘A2’, and notice u/s 148 dated 24.04.2023 at Annexure-‘A3’ to this petition; |
| (b) | pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the order and notice at Annexure-A2 and A3 to this petition and stay further proceedings for assessment for A.Y. 2019-20; |
| (c) | any other and further relief deemed just and proper be granted in the interest of justice; |
| (d) | to provide for the cost of this petition.” |
2. Brief facts of the case are as under:
2.1. The petitioner is the widow and legal heir of Shri Yogesh Somalal Joshi who passed away on 09/06/2020. The petitioner thereafter got herself registered on the portal of the Income Tax as legal heir on 30/12/2020 and filed return of the income of the deceased as legal heir for Assessment Year 2020-2021 on 30/12/2020.
2.2. Thereafter on 16/12/2021, the petitioner electronically filed the return of income of the deceased for Assessment Year 2021-2022. The respondent issued notice under Section 148A(b) on 28/03/2023 in the name of deceased husband of the petitioner in name of Shri Yogesh Somalal Joshi. The petitioner therefore could not respond to the notice which culminated into the order under Section 148A(d) dated 24/04/2023 along with the notice under Section 148 of the Act of the same date.
3. Being aggrieved, the petitioner has preferred this petition.
4. Learned advocate Mr. Jignesh Parikh for the petitioner submitted that the notice issued in the name of the dead person by the respondent authority and the order passed under Section 148A(d) of the Act is without jurisdiction more particularly, when the petitioner registered herself as a legal heir of the her late husband Shri Yogesh Somalal Joshi who passed away on 09/06/2020.
5. In support of his submissions, reliance is placed upon the following decisions:
| (a) | Smt. Madhuben Kantilal Patel v. Union of India reported in (Gujarat). |
| (b) | Utpala Pradeep Jain v. Assistant Commissioner of Income-tax (Gujarat). |
| (c) | Nishant Daxeshbhai Mehta v. Income-tax Officer (Gujarat). |
| (d) | Income-tax Officer v. Bhupendra Bhikhalal Desai |
| (e) | Savita Kapila v. Asstt. CIT (Delhi). |
| (f) | Chandreshbhai Jayantibhai Patel v. ITO. |
6. Referring to above decisions, it was submitted that impugned notice and order passed by respondent no.2 are liable to be quashed and set aside.
7. On the other hand, learned Senior Standing Counsel Mr.Varun K. Patel for the respondent referred to and relied upon the following averments made in the affidavit-in-reply filed on behalf of respondent:
“5. With reference to para 3.1 and 3.2, the Respondent denies each and every allegation, averment and/or contention raised in these paras. It is submitted that the petitioner’s case was pushed through Insight Portal relating to unexplained transaction made by the petitioner during the F.Y. 2018-19 relevant to AY 201920 under the risk management strategy formulated by the Hon’bel Central Board of Direct Taxes. It is further submitted that in present case, information was received that the assessee has benefitted from accommodation entry in the form of bogus donations to the extent of Rs.2,00,000/- to Rashtriya Samajwadi Party (Secular).
It is submitted that the Income Tax Return for the Assessment Year 2019-20 was filed in the name of the assessee, Shri Yogesh Somalal Joshi.
It is further submitted that even as on today no legal heir details have been reflected on the ITBA portal. The screenshot evidencing the legal heir status on ITBA
Portal and event details of PAN on ITBA portal have been annexed herewith as Annexure-R/1.
Therefore, since legal heir details are not reflected on ITBA portal, the then assessing officer might have issued the show-cause notice u/s. 148A(b) of the Act on 28.03.2023 and the order passed u/s. 148A(d) of the act on 24.04.2023 in the name of late assessee.
It is further submitted that during the reopening proceedings-initiated u/s. 147 of the Act, no response was submitted by the assessee with respect to the legal heir, despite the show-cause notice issued u/s 148A(b) of the Act dated 28.03.2023 and the order passed u/s. 148A(d) of the Act on 24.04.2023.
It is further submitted that since no response was received from the petitioner, the order u/s 148A(d) of the Act was passed after taking approval from the competent authority and subsequently, the case was reopened by issuing notice u/s 148 of the Act for the A.Y.2019-20. It is therefore denied that impugned order u/s 148A(d) & impugned notice u/s 148 of the Act are without jurisdiction.
It is further submitted that the reliance is placed is placed upon by the assessee on Nishat Daxeshbhai Mehta v. Income-tax Officer [2023] 3)and Himadri Kandarp Mehta v. Income-tax Officer/[2023] 457 ITR 92 (Gujarat) are misplaced as in the case of Nishant (supra) the assessee has responded to the notice u/s 148A(b) of the Act thereby brought to the notice of the Assessing Officer the demise of the assessee, however, in the present case neither response was received from the assessee nor any letter was submitted to JAO. It is submitted that the judgment in the case of Himadri Kandarp Mehta is applicable for un-amended provision of section 147/148/149/151 of th Act as after the amendment new section 148A of the Act has been inserted wherein a show cause notice is issued u/s 148A(b) of the Act providing opportunity of being heard to the assessee and subsequently determining whether the case is fit case or not.
7. With reference to para 3.4, the Respondent denies each and every allegation, averment and/or contention raised in this para. It is submitted that the phrase “if required” in section 148A(a) suggests that the prior inquiry is not mandatory. It is further submitted that the proceedings u/s 148A of the Act are summary proceedings. In this regard reliance is placed upon the judgment of the Hon’ble High Court of Allahabad in Writ Tax No.479 of 2024 in the case of Ravindra Pratap Singh v. Union of India and other wherein the Hon’ble High Court has observed that proceedings u/s 148A of the Act are summary proceedings and has also observed that
“18. Therefore, the fact that the Assessing Authority has been drawn into the discussion to deal with the replied filed by the petitioner may not alter the status of the proceedings as a summary proceedings as may only give rise to jurisdiction to reassess. At this stage, no detailed finding is either required or permissible in law. The Assessing Authority may have done well to pass a short order to briefly deal with the objections raised to disclose his decision – that it as a “fit case” to initiate reassessment proceedings”.
8. Referring to the above averments, it was submitted that the case of the petitioner is covered under Clause-(i) of explanation to Section 148 of the Act as the information has been received in accordance with the risk management strategy formulated by the board from time to time and the respondent Assessing Officer has therefore rightly exercised the jurisdiction vested in him under the provisions of Section 147 read with Section 148 of the Act as the information was received from the investigation wing. It was therefore, submitted that no interference may be called for in the impugned order as well as notice by this Court while exercising extra ordinary jurisdiction under Article 226 of the Constitution of India.
9. Having heard the learned advocates for the respective parties and considering the facts emerging from the record, it is not in dispute that impugned notice under Section 148A(b) is issued in name of Shri Yoghesh Somalal Joshi who had already expired on 09/06/2020. The petitioner is already registered as legal heir of late Shri Yoghesh Somalal Joshi. The order under Section 148A(d) is also passed in name of the deceased Shri Yoghesh Somalal Joshi as well as the notice under Section 148 of the Act is also issued in his name. Therefore, impugned notice under Section 148A(b) and the order under Section 148A(b) as well as the notice under Section 148 of the Act are not sustainable as the same are issued against the deceased person.
10. This petition is accordingly allowed. The impugned notice under Section 148A(b) dated 28.03.2023 at Annexure-‘A1’, order u/s 148A(d) dated 24.04.2023 at Annexure-‘A2’, and notice u/s 148 dated 24.04.2023 at Annexure-‘A3’ to this petition are hereby quashed and set aside. However, it is open for the respondent to issue notice to initiate proceedings against the petitioner as a legal heir if permissible in accordance with law. No order as to costs.