The Madras High Court has set aside an assessment order and consequential penalty proceedings initiated under the Income Tax Act, 1961 by the Income Tax Department against a deceased individual citing the timely intimation of the death of the assessee to the Income Tax Officer.
The case revolved around the assessment proceedings initiated against Mr. Veeraraghavan, who had passed away on November 21, 2015. Despite his demise, the Income Tax Department initiated reassessment proceedings against him, prompting his legal heir, V. Purushothaman, to challenge the validity of the proceedings through a writ petition under Article 226 of the Indian Constitution.
The petitioner, represented by Ms. Hema Muralikrishnan contended that notices issued by the Income Tax Department were invalid as they failed to account for the demise of Mr. Veeraraghavan. Both in response to the initial notice dated February 16, 2023 and the subsequent show cause notice dated September 4, 2023, the petitioner duly informed the authorities of Mr. Veeraraghavan’s demise. The petitioner argued that the proceedings against a deceased individual are legally untenable.
To substantiate the claim of Mr. Veeraraghavan’s demise, the petitioner presented a death certificate dated September 7, 2023, which confirmed the date of his passing. Additionally, a legal heirship certificate dated January 6, 2016, was produced, demonstrating that the petitioner was among the legal heirs of the deceased.
The respondents, Income Tax Officer and others, represented by Mrs. S. Premalatha, argued that since the assessment was conducted by the National Faceless Assessment Unit, postal communications were not considered.
The court emphasised that such technicalities could not override the fundamental principle that proceedings against a deceased individual are unsustainable.
The court highlighted that the petitioner had timely communicated the death of Mr. Veeraraghavan to the Income Tax Department. The court further noted that the assessment order and penalty proceedings, being directed towards a deceased person, lacked legal validity.
Consequently, the single bench of Justice Senthilkumar Ramamoorthy quashed the assessment order and penalty proceedings against Mr. Veeraraghavan, leaving it open for the Income Tax Department to initiate proceedings against his legal heirs in accordance with the law.
The bench stressed the significance of timely communication between taxpayers and tax authorities, particularly in cases involving the demise of the assessee.
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