Income Tax Reassessment Notice u/s 148 against Dead Person is Null and Void: ITAT [Read Order]
Noting that the notice under Section 148 was issued to an individual who had already passed away, the Tribunal ruled that the reassessment proceedings were null and void in the eyes of law.
Income Tax Reassessment - Dead - ITAT - taxscan
Income Tax Reassessment - Dead - ITAT - taxscan
The Kolkata Bench Income Tax Appellate Tribunal (ITAT) held that the reassessment proceedings initiated against a deceased person were bad in law and all consequent actions were null and void.
Sulochana Devi Bagaria (assessee) had died on November 26, 2015, but the notice under Section 148 of the Act, which initiates reassessment proceedings, was issued on March 31, 2021.
The appeal was filed by the assessee’s legal representative against the order of the Commissioner of the Income Tax (appeals)[CIT(A)].
The counsel for the assessee argued that the entire reassessment proceedings were bad in law as the notice was issued to a dead person, and the orders passed by the Assessing Officer (AO) and confirmed by the CIT(A) were also against a deceased individual, making them a nullity in the eyes of law.
The Legal Representative (LR) of the assessee had brought the fact of the death to the knowledge of the CIT(A) when filing the appeal, but the order was still passed against the dead person.
On the other Hand, the counsel for the Revenue submitted that the proceedings should stand because the Legal Representative failed to inform the department about the death of the assessee.
The two-member bench, comprising Rajesh Kumar (Accountant Member) and Shri Pradip Kumar Choubey (Judicial Member) observed a similar case decided by the Coordinate Kolkata Bench, Ajay Goel (Legal Heir of Late Manju Goel) vs. Assessing Officer.
The Coordinate Bench's order, which was considered in the present case, had relied on the judgment of the Hon'ble Delhi High Court in Savita Kapila vs. ACIT. The Delhi High Court had explicitly stated that there is no statutory obligation on the part of legal representatives to immediately intimate the death of the assessee to the Revenue or take steps to cancel the PAN registration.
Therefore, whether the PAN record was updated or if the department was informed by the legal representatives was deemed irrelevant. The High Court had further held that the issuance of a notice upon a dead person does not come under the ambit of mistake, defect, or omission.
Therefore, the tribunal followed the established precedents and held that since Sulochana Devi Bagaria died before the Section 148 notice was issued, the notice was bad in law, and the reassessment proceedings initiated by the AO were null and void.
The Tribunal noted that the CIT(A) also did not take steps to initiate proceedings against the legal representative as prescribed under Section 159 of the Act. The tribunal set aside the reassessment proceedings. The appeal of the assessee was allowed.
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