Smt. Sowmya S., Legal Representative of Deceased Smt. Ashwathkate Prabhushamappa Sandhya V. Income Tax Officer, Ward 7 (2) (1), Bangalore and Principal Chief Commissioner of Income Tax, Karnataka and Goa and State Bank of India, Jayanagar 5th Block Branch

WP/25728/2023

AI Insights

The case involves a writ petition filed by Smt. Sowmya S., the legal representative of the deceased Smt. Ashwathkate Prabhushamappa Sandhya, challenging various orders issued by the Income Tax Department against the deceased. The petitioner contested the validity of the assessment order, computation sheet, demand notices, and penalty order, all of which were issued after the death of the petitioner. The court found that these orders, being issued against a deceased person, amounted to a nullity and thus required setting aside. The court also addressed the procedural requirements under Section 159(2)(a) of the Income Tax Act, which allows proceedings to continue against the legal representative of a deceased assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 805351 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-06-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: DILIP; RAVI RAJ
• Assessee Lawyers: SANDEEPANI NEGLUR
• Keywords: Assessment Order; Deceased; Ex-parte; Income Tax; Legal representative; Nullity; Set aside; Writ petition; De-freezing of Accounts
• Section: 147; 148; 144; 148A(d); 226; 159(2)(a)

Judgement Text

" - 1 - NC: 2024:KHC:21896 WP No. 25728 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 25728 OF 2023 (T-IT) BETWEEN: SMT. SOWMYA S., AGED ABOUT 40 YEARS, LEGAL REPRESENTATIVE OF DECEASED SMT. ASHWATHKATE PRABHUSHAMAPPA SANDHYA, RESIDING AT NO. 1234/A/01, 26A MAIN ROAD, 4TH BLOCK, JAYANAGAR, BANGALORE-560 041. …PETITIONER (BY SRI. SANDEEPANI NEGLUR, ADVOCATE FOR SRI. SANDEEP HUILGOL, ADVOCATE) AND: 1. INCOME TAX OFFICER, WARD 7 (2) (1), BANGALORE, BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA, BENGALURU-560 095. 2. PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KARNATAKA AND GOA, BCR BUILDING, PRO SECTION, GROUND FLOOR, QUEENS ROAD, VASANTH NAGAR, BENGALURU, KARNATAKA-560 001. Digitally signed by V KRISHNA Location: High Court of Karnataka - 2 - NC: 2024:KHC:21896 WP No. 25728 of 2023 3. STATE BANK OF INDIA, JAYANAGAR 5TH BLOCK BRANCH, NO. 35/18, 11TH MAIN, 5TH BLOCK, JAYANAGAR, NEAR RAGHAVENDRASWAMY, BANGALORE-560 041, REPRESENTED HEREIN BY ITS MANAGER. …RESPONDENTS (BY SRI. DILIP M., JUNIOR STANDING COUNSEL A/W SRI. RAVI RAJ Y. V., SENIOR STANDING COUNSEL FOR R1 AND R2; VIDE ORDER DATED 24.01.2024, NOTICE TO R3 IS DISPENSED WITH) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ASSESSMENT ORDER DATED 18/03/2023 BEARING DIN AND ORDER NO. ITBA/AST/S/147/2022-23/1050937437(1) PASSED BY R1 UNDER SECTION 147 READ WITH SECTION 144 OF THE INCOME-TAX ACT, 1961 (ANNEXURE-A1) AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has called in question the validity of the assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961 (for short 'the Act') at Annexure-'A1', validity of computation sheet at - 3 - NC: 2024:KHC:21896 WP No. 25728 of 2023 Annexure-'A2', demand notice at Annexures-'A3' and B. The petitioner has also called in question the validity of the penalty order at Annexure-'C1', computation sheet at Annexure-'C2', the order passed under Section 148A(d) of the Act at Annexure-'E1' and the notice issued under Section 148 of the Act at Annexure-'E2'. The petitioner has also sought for direction for de-freezing of accounts as a consequential relief. 2. The admitted facts being that the petitioner has stated to have died on 21.05.2022 as evidenced by the Death Certificate. It is not in dispute that as on the date of issuance of notice under Section 148A(b) of the Act and the order at Annexure-'E1' passed under Section 148A (d) of the Act as well as the notice under Section 148 of the Act dated 31.03.2022, the petitioner was alive. It is during the proceedings for assessment, subsequent to the notice issued under Section 148 of the Act, the petitioner has passed away on 21.05.2022. The assessment order at Annexure-'A1' is passed against a dead person. - 4 - NC: 2024:KHC:21896 WP No. 25728 of 2023 3. It is further not in dispute that the proceedings have progressed ex-parte. In light of the assessee being dead as on the date of passing the assessment order under Section 147 read with Section 144 of the Act, the order against the dead person amounts to nullity and accordingly, requires to be set aside. 4. The procedure prescribed when the assessee dies during pendency of the proceedings is in terms of Section 159(2)(a) of the Act which provision reads as hereunder: \"Section 159. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of sub-section (1),- (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased.\" - 5 - NC: 2024:KHC:21896 WP No. 25728 of 2023 5. In light of the same when the assessee dies during pendency of the proceedings, proceedings are to be continued through the legal representatives of the deceased. Accordingly, the order at Annexure-'A1' as well as computation sheet at Annexure-'A2', demand notice at Annexure-'A3', demand proceedings at Annexure-'B' and penalty proceedings at Annexures-'C1' and 'C2' are set aside. 6. Consequent to allowing the writ petition and setting aside of the assessment order, the order of freezing the bank account as evidenced at Annexure-'K' is set aside. Matter is remitted to the stage post to the notice issued under Section 148 of the Act. Revenue to take steps in accordance with Section 159(2)(a) of the Act. 7. Upon such steps being taken, the petitioner is at liberty to file their reply to the notice issued under Section 148 of the Act. - 6 - NC: 2024:KHC:21896 WP No. 25728 of 2023 8. Accordingly, petition is disposed off. All other contentions are kept open. Sd/- JUDGE MCR "