The two-judge bench of the Supreme court, recently ruled that assessment under secton 158BC of the Income Tax Act made in the name of a dead person cannot be held as invalid if no objection were raised at the time of notice.
The petitioner is the legal heir of the deceased-assessee against whom, the IT Department had issued a search warrant under section 132 of the Income Tax Act. The notice was duly received by the petitioner-legal heir of the deceased. Subsequently, a notice under section 158BC was issued against the assessee and the petitioner had duly participated in the proceedings and reported nil income. Thereafter, notice under Section 158BD of the Income Tax Act was issued to the present petitioner on the basis of information coming to light in the course of search.
The petitioner challenged the notice before the High Court wherein the Court dismissed the writ petition aggrieved by the order of the High Court, the petitioner preferred a Special Leave Petition before the Supreme Court.
Dismissing the petition, the bench comprising Justice Rajan Gogoi and Justice Navin Sinha said that “the point urged before us, shortly put, is that if the original search warrant is invalid the consequential action under Section 158BD would also be invalid. We do not agree. The issue of invalidity of the search warrant was not raised at any point of time prior to the notice under Section 158BD. In fact, the petitioner had participated in the proceedings of assessment initiated under Section 158BC of the Income Tax Act. The information discovered in the course of the search, if capable of generating the satisfaction for issuing a notice under Section 158BD, cannot altogether become irrelevant for further action under Section 158BD of the Income Tax Act.”
Read the full text of the order below.
