In a recent ruling, the Madras High Court quashed an income tax order against a Hindu Undivided Family (HUF) citing non-compliance due to the death of the Karta and the issuance of notices to an outdated address. The court directed the authorities to reconsider the matter.
S. Santhakumari, the petitioner challenged an income tax assessment order dated 29.09.2021 under Section 147 read with Section 144 of the Income Tax Act, 1961. The petitioner represented a Hindu Undivided Family (HUF) who was Karta, Mr. M. Subramanian passed away on 15.01.2013.
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The petitioner filed income tax returns for the last two months of the assessment year 2013-2014 after the death of the Karta. The Income Tax Department issued notices under Section 148 of the Income Tax Act, 1961 for reopening the assessment due to the non-filing of returns for that year.
Notices were issued to an outdated email address before the petitioner updated the email details with the department on 01.10.2021. The petitioner claimed that neither she nor her son, Mr. S. Radhakrishnan received any of the notices sent by the department.
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The respondent argued that the HUF did not dissolve with the death of the Karta and that it was the responsibility of the remaining coparceners to respond to the notices. The respondent alleged that the family intentionally avoided receiving communications despite being aware of the tax obligations.
The petitioner sought leniency citing the death of the Karta and disruptions caused by the COVID-19 pandemic.
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The court observed that the petitioner faced challenges due to the death of the Karta. The court recognized the extraordinary circumstances created by the COVID-19 pandemic which may have caused extra delay in the petitioner’s ability to respond to the notices.
The court observed that the son of the petitioner was a practicing advocate so the court directed that the reassessment should proceed under the faceless assessment scheme to eliminate any bias or procedural irregularities.
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The court quashed the assessment order and remanded the matter to the Income Tax Department for reassessment under the faceless assessment scheme. The writ petition was allowed.
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