The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) quashed the order passed by the assessing officer against a deceased person by issuing notice under section 148 of the Income Tax Act,1961 for reassessment.
ShankarMukund Shenai,theappellant assessee filed a return of income. Later the assessing officer reopened the returns under the section 147 of the Income Tax Act, by issuance of notice under section 148 of the Income Tax Act.
The assessee’s daughter filed a letter informing the assessing officer that the assessee (Shri Shankar Mukund Shenai) had expired and she is the daughter of the deceased/legal heir. She objected to reopen the assessment by stating that the “Notice issued on deceased person was void ab initio and the law was very clear that notice cannot be served on the deceased person”. However, the assessing officer rejected the same by issuing an order.
Thus, the legal heir of the assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for confirming the order passed by the assessing officer.
Puru Jain and Rajendrakumar Jain, the counsels for the assessee contended that the assessee’s daughter informed the assessing officer about the death of her father and enclosed a copy of the Death Certificate.
Additionally stated that, she objected the reassessment stating that the issuance of notice to a deceased person was invalid in the eyes of the law. According to her, all the proceedings consequent to it were null in the eyes of law.
Anil K. Das, the counsel for the revenue contended that the assessing officer proceeded to frame the reassessment without first dropping the re-assessment action against the deceased person and thereafter, issued fresh notice under section 148 of the Income Tax Act, on the legal heir and then proceeded to frame re-assessment in her name on behalf of deceased assessee.
Further, the reopening of the assessment against the legal heir of the deceased person is valid as per the law.
The two-member bench comprising Aby T.Varkey(Judicial) and Om Prakash Kant (Accountant) held that impugned notice for reopening the assessment under section 148 of the Income Tax Act was issued in the name of the deceased assessee; and despite knowing that the assessee had passed away and proceeded to frame re-assessment, without first dropping the proceedings initiated by the issuance of the impugned notice.
Additionally, it was determined that the notice to reopen issued under section 148 of the Income Tax Act against the deceased assessee was improper and should be invalidated while admitting the assessee’s appeal.
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