MITESH GORADHANDAS SOMAIYA LHS OF LATE GORADHANDAS MADHAVJI SOMAIYA V. INCOME TAX OFFICER WARD 6(1)(1)

SCA/5870/2022

AI Insights

The case revolves around a notice issued by the Income Tax Officer to Goradhandas Madhavji Somaiya, who had passed away on August 20, 2019, regarding the assessment for the year 2017-2018. The notice was issued on March 30, 2021, and was challenged by his legal representative, Mitesh Goradhandas Somaiya, under Article 226 of the Constitution. The primary legal question was whether assessment proceedings can be maintained against a deceased person. The court referenced a similar case, Himadri Kandarp Mehta L/H of Late Kandarp Yashshvibhai Mehta vs. The Income Tax Officer, and other precedents, to conclude that such proceedings are not maintainable unless the legal representatives have participated in them.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 747237 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 01-08-2022
• Assessment Year: misc
• Other Referred Cases: Himadri Kandarp Mehta L/H of Late Kandarp Yashshvibhai Mehta vs. The Income Tax Officer, Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M R BHATT; KARAN SANGHANI
• Assessee Lawyers: TUSHAR HEMANI; VAIBHAVI PARIKH
• Keywords: Deceased assessee; Income Tax; Jurisdictional defect; Legal representative; Re-assessment
• Section: 148; 292B

Judgement Text

"C/SCA/5870/2022 ORDER DATED: 01/08/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 5870 of 2022 ========================================================== MITESH GORADHANDAS SOMAIYA LHS OF LATE GORADHANDAS MADHAVJI SOMAIYA Versus INCOME TAX OFFICER WARD 6(1)(1) ========================================================== Appearance: MR. TUSHAR HEMANI, SR. ADV. WITH MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MR. M.R.BHATT, SR. ADV. WITH MR. KARAN SANGHANI, ADV. FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1,2 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 01/08/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned senior advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh for the petitioner and learned senior advocate Mr. M. R. Bhatt with learned advocate Mr. Karan Sanghani for the respondents. 2. The petitioner is a legal representative of the assessee-deceased Goradhandas Madhavji Somaiya. By filling this petition under Article 226 of the Constitution, the petitioner has prayed to quash and set aside the notice dated 30.3.2021 issued by the respondent authorities to the deceased Goradhandas Madhavji Somaiya under section 148 of the Income Tax Act, 1961, whereby the authorities proposed to assess/re- assess the income/loss of the deceased Goradhandas Madhavji Somaiya Page 1 of 6 C/SCA/5870/2022 ORDER DATED: 01/08/2022 for the Assessment Year 2017-2018. 3. Deceased Goradhandas Madhavji Somaiya was an individual. He passed away on 20.08.2019. His death is evidenced by the death certificate produced on record of this petition at Annexure B. Thereafter, after a gap of about nineteen months, the respondents issued notice dated 30.3.2021 under section 148 of the Income Tax Act to the said deceased Goradhandas Madhavji Somaiya seeking to re-open the case for year under consideration. 4. Pursuant to the said notice dated 30.3.2021, the petitioner addressed a letter dated 16.2.2022 raising objections against the re- opening wherein it was categorically stated that the assessee- Goradhandas Madhavji Somaiya had passed away. Despite this correspondence, the respondents failed to respond which let the petitioner to file the present petition. 5. The only issue to be considered in the present petition is whether the Assessment proceedings are maintainable against the dead person. Similar question had come up for consideration before this court in Himadri Kandarp Mehta L/H of Late Kandarp Yashshvibhai Mehta vs. The Income Tax Officer being Special Civil Application No. 16323 of 2019 decided on 1.8.2022. 5.1 Extracting the discussion from Himadri Kandarp Mehta (supra) which would apply and cover the present case, “5. The Division Bench of this Court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3) [(420) ITR 226], addressed the very issue. The Court considered various decisions of the Supreme Court and the High Court, touching the aspects of the issue, held that there cannot be any Page 2 of 6 C/SCA/5870/2022 ORDER DATED: 01/08/2022 assessment against a dead person. In that case also, notice was issued to the dead assessee under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the \"Act\"). 5.1 While holding that the proceedings would be nullity against the dead assessee, the rider was provided that in cases where legal representatives participate in the assessment or re-assessment proceedings, the proceedings may be maintained and continued. It was at the same time held that mere intimation by the legal representative to the assessing officer that the noticee is dead, would not amount to legal representation on participation in that proceedings. 5.2 In Urmilaben Anirudhhasinji Jadeja (supra), while the revenue raised various contentions seeking a proposition that the proceedings against the dead assessee would be maintained, the Court negatived them all. 5.3 One of the contention was based on Section 292B of the Act. The said provision contemplates that the notice shall be deemed to be valid in certain circumstances. It mentions that where an assessee has appeared in any proceedings or cooperated in any inquiry relating to assessment or re-assessment, it shall be deemed that a notice required to be served under the Act has been duly served upon him. Such, it is provided, shall be precluded by taking any objection about the service of the service of the notice and manner of the service. 5.4 The Division Bench held that the said provision would not apply in cases where notices are gone to the dead assessee and the proceedings are started against a dead assessee. It was observed and held in paragraph 23 thus, \"The purport of Section 292B of the Act is that in the event of any mistake, defect or omission in the notice or other proceedings, if the same is in conformity with or according to the intent and purpose of the Act, the notice cannot be termed as invalid. To put it in other words, the notice should be in conformity with and in accordance with the intent and purpose of the Act. In our opinion, a case in which notice is issued to a dead person could be termed as nullity. It is Page 3 of 6 C/SCA/5870/2022 ORDER DATED: 01/08/2022 something like a safeguard passing a decree against a dead person which cannot be executed through the legal representatives of the judgment-debtor.\" 5.4.1 The continuation of proceedings pursuant to notice under Section 148 of the Act was held to be without authority of law by the Court stating thus - \"...the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 of the Act has to be treated as invalid. In the absence of a valid notice, the Assessing Officer has no authority to assume the jurisdiction under section 147 of the Act and, hence, continuation of the proceeding under section 147 of the Act pursuant to such invalid notice, is without authority of law. The impugned notice as well as the proceedings taken pursuant thereto, therefore, cannot be sustained.\" 5.5 Thus, the law is well settled that unless the heirs and legal representatives of the deceased assessee could be said to have been submitted to the jurisdiction of the assessing officer and have participated in the assessment or re-assessment proceedings, notice to the dead assessee and commencement of assessment or re- assessment proceedings against dead person is rendered null and void. 5.6 The attempt on the part of the income tax authorities to start proceedings for assessment or re-assessment against the dead person is viewed not merely as procedural irregularity but it is stated as jurisdictional defect. 5.7 There cannot be an assessment against the dead person. As noticed above, the provisions of Section 292B of the Act are also Page 4 of 6 C/SCA/5870/2022 ORDER DATED: 01/08/2022 not applicable and no assessment can be framed against a non- existing entity or a person who has died.” 5.2 In light of the above law, reverting back to the facts of the present case, assessee-Gordhandas Madhavji Somaiya died on 20.08.2019. Notice under section 148 of the Income Tax Act came to be issued on 30.3.2021, that is after about nineteen months from the death of the assessee. 5.3 Noticeably, it transpires from the record that the petitioner herein who happens to be the legal representative of the deceased assessee, intimated to the Income Tax officer concerned on 16.2.2022 by addressing letter that the noticee Gordhandas Madhavji Somaiya had died long back and that the notice was without jurisdiction. The Income Tax authorities did not pay heed to the said intimation. 5.4 The facts of the case did not offer any fact or circumstances to suggest that the legal representative of the deceased assessee in any manner submitted to the jurisdiction of the income tax authorities or in any way participated in the proceedings to persuade the court to hold otherwise. On the contrary, communication dated 16.2.2022 was sent to the Income Tax officer by the legal representative that the noticee Goradhandas Madhavji Somaiya had died. 6. In view of the above, the present petition deserves to be allowed. It is hereby allowed by holding that the impugned notice, which was against the dead assessee, could not be sustained. Resultantly, the notice dated 30.3.2021 received in the name of Goradhandas Madhavji Somaiya, as a dead person, by the Income Tax department is held to be illegal. Page 5 of 6 C/SCA/5870/2022 ORDER DATED: 01/08/2022 7. Accordingly, the notice dated 30.03.2021 issued by the Income Tax authorities is set aside. The Income Tax authorities shall not proceed against the said dead assessee. Rule is made absolute to the aforesaid extent. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) C.M. JOSHI/pps Page 6 of 6 "