Income Tax Dept Cannot Issue Notice in Name of Deceased When Earlier Court Order Recognised Legal Heir: Calcutta HC [Read Order]

In a recent decision, the Calcutta High Court held that the Income Tax Department cannot issue a notice in the name of a deceased person when the legal heir has already come forward and been recognised in an earlier court order.

Narendra Kumar Agarwal, the petitioner, filed a writ petition challenging a notice issued under Section 148A(b), the subsequent order under Section 148A(d), and the reassessment notice under Section 148 of the Income Tax Act, 1961, for the assessment year 2020-21.

The petitioner argued that all three proceedings were issued in the name of Chiranjilal Agarwala, who had passed away on 28 April 2021. The petitioner referred to a previous Calcutta High Court order dated 6 June 2022 in WPA 8838 of 2022, which had already quashed a similar notice issued for the assessment year 2018-19 on the ground that it was served to the same deceased person.

Despite this, the department issued a fresh notice for a later assessment year in the name of the deceased. The petitioner argued that he had already identified himself before the court as the legal heir in the earlier case and had also tried to register himself on the portal, but was unable to do so due to system restrictions. The counsel submitted that the department should have issued the notice to him instead.

The department’s counsel argued that the notice was issued in the deceased’s name because the assessing officer did not have access to documents identifying the legal heirs. The counsel argued that no information was uploaded by the legal heirs on the portal, and therefore, the officer had no option but to proceed in the name of the deceased.

The bench comprising Justice Raja Basu Chowdhury pointed out that this explanation was not acceptable. The court stated that since the earlier order in 2022 had been passed in the name of the petitioner and had acknowledged the death of Chiranjilal Agarwala, the assessing officer ought to have proceeded against the legal heir instead of repeating the same mistake.

The court also explained that the legal heir could not be expected to upload documents on behalf of a deceased person unless properly recognised in the system. The court held that the notice under Section 148A(b) dated 28 March 2024, the order under Section 148A(d) dated 19 April 2024, and the reassessment notice issued under Section 148, along with all related proceedings, could not be sustained in law.

The court quashed all three impugned actions and disposed of the writ petition. No order as to costs was made.

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