SUJATA DEVI V. INCOME TAX OFFICER

WPC/5061/2022

AI Insights

The case involves Sujata Devi, the legal heir of the deceased Bidya Nand Chourasia, who challenged the assessment and penalty orders issued by the Income Tax Department against her deceased husband. The orders were based on notices issued under sections 147 and 148 of the Income Tax Act, 1961, for the assessment year 2015-16, despite the fact that Bidya Nand Chourasia had passed away on 14.02.2015. The petitioner argued that these actions were illegal as they were taken against a deceased person without involving his legal representative, as required under Section 159 of the Income Tax Act. The court found that the department had been duly informed about the death, and thus, the proceedings initiated against the deceased were void.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 673005 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 15-02-2024
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Ltd, Sandeep Chopra, son of late Bhim Sain Chopra, alias, Bhim Sen Chopra vs PCIT, Dhanbad and others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: R N SAHAY; ANURAG VIJAY
• Assessee Lawyers: MAHENDRA CHOWDHARY; PIYUSH PODDAR
• Keywords: Assessment Order; Dead person; Jurisdiction; Legal representative; Penalty order; Void ab initio
• Section: 147; 148; 144; 292BB; 271(1)(c); 271(1)(b); 271F; 144B; 292B; 159; 161(2); 167; 162

Judgement Text

"1 IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 5061 of 2022 Sujata Devi ..… Petitioner Versus 1. Income Tax Officer, Ward 2(1) Dhanbad having its office at Aaykar Bhawan, Luby Circular Road, Dhanbad. 2. National Faceless Assessment Centre Delhi. .....Respondents --------- CORAM: Hon’ble Mr. Justice Rongon Mukhopadhyay Hon’ble Mr. Justice Deepak Roshan --------- For the Petitioner : Mr. Mahendra Kr. Chowdhary, Adv. Mr. Piyush Poddar, Adv. For the Res. Resp. : Mr. R. N. Sahay, Sr.S.C., Adv. Mr. Anurag Vijay, Jr. S.C. --------- CAV on :-29.11.2023 Pronounced on:- 15/02/2024 Per Deepak Roshan, J. The instant writ application has been preferred by the petitioner praying for quashing and setting aside the Assessment Order passed u/s 147 read with section 144 read with section 144B of the Income Tax Act,1961 dated 13.03.2022 raising tax demand of Rs. 24,72,813/- (Annexure- 4 & 4/1) and consequential penalty order u/s 271(1)(c) dated 31.08.2022 imposing penalty of Rs.9,40,287/-(Annexure-5 & 5/1), penalty order u/s 271(1)(b) dated 18.08.2022 imposing penalty of Rs. 20,000/- (Annexure-6 & 6/1) and penalty order u/s 271F dated 12.08.2022 imposing penalty of Rs. 5,000/- (Annexure-7 & 7/1), in pursuance to alleged notice u/s 148 issued on 30.03.2021 (Annexure-2) for the Assessment year 2015-16, by the ITO, Ward - 2(1), Dhanbad, since the same has been issued on a dead person i.e. Late Bidya Nand Chourasia who expired on 14.02.2015 (Annexure-3/1), which 2 are wholly without jurisdiction, void ab-initio since passed on the dead person, even after the counsel of the Petitioner informed the Respondent No.1, the Jurisdictional Assessing officer, on 28.02.2022 (Annexure-3& 3/1) about the death of the Assessee Bidya Nand Chourasia with a copy of his Death Certificate. 2. The brief facts of the case as would appear from the writ application is that the husband of the petitioner, Bidya Nand Chourasia, was assessed to income tax since long at Dhanbad having PAN : ABUPC9210H and filed his return of income up to Assessment year 2014-15. He expired on 14.02.2015. On 30.03.2021, the Respondent No 1 issued a notice U/s 148 in the name of deceased Bidya Nand Chourasia which was never served upon the assessee or the petitioner. On 18.06.2021, a postal envelope from ITO, Ward-2(1), Respondent No. 1 was received at the residence of the petitioner by post which was duly received stating in the Acknowledgment that the addressee Bidya Nand Chourasia is dead and as such the notice is being received by his legal heir. It contained a notice U/s 142(1) dated 18/06/2021 issued by the Respondent No.1, the jurisdictional Assessing officer in the name of Bidya Nand Chourasia. Thereafter, the Inspector of the Verification Unit of the IT Department at Dhanbad, came to the house of the 3 Petitioner physically along with a notice bearing No. INSIGHT/ VER/ 02/ Service Letter /2014-15/ 491410678823001 dated 14.02.2022 for serving this notice physically upon the Assessee and conducting the enquiry. He was also informed that the Assessee has expired long back on 14.02.2015 and a copy of the death certificate was also handed over to him. He has said that he will be preparing a Report and will be sending the same to the National Faceless Assessment Centre along with the death certificate. The Petitioner was also told that the proceedings on a dead person is non-est in the eye of law. Thereafter, as an abundant precaution and as advised, a petition in reply to the aforesaid notice u/s 142(1) dated 18.06.2021 (Annexure-2) was also filed by her through her counsel before the ITO, Ward-2(1), Dhanbad, the jurisdictional AO (Respondent No 1) on 28.02.2022. Again, a postal envelope from the Respondent No.1 in the name of Bidya Nand Chourasia was received at the residential address of the Petitioner which was refused, stating at the envelope that the addressee is dead and as such being not received. The Petitioner thereafter did not receive any further notice or communication from the IT department, as such she was under impression that the proceedings initiated were dropped. Subsequently, when the old mobile number of her 4 deceased husband was re-charged, it was seen that there are SMS’ of Income Tax Department. Thereafter, it was found from IT portal that an order has been passed against the dead person. As a matter of fact, an ex-parte Assessment order U/s 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 dated 13.03.2022 was found uploaded in the e-proceedings portal, raising income tax and interest demand of Rs. 24,72,813/- in the name of Bidya Nand Chourasia, by the National Faceless Assessment Centre (in short NFAC), Delhi (Respondent No.2). 3. Learned counsel for the petitioner submits that three ex-parte penalty orders were uploaded at the IT Portal of petitioner’s husband, passed in the name of Bidya Nand Chourasia by the ITO, Dhanbad as under:- (i) Penalty u/s 271(1)(c) of Rs.9,40,287/- imposed by Respondent No.1 on 31.08.2022. (ii) Penalty u/s 271(1)(b) of Rs. 20,000/- imposed by Respondent No.1 18.08.2022. (iii) Penalty u/s 271F of Rs. 5,000/- imposed by Respondent No.1 on 12.08.2022. On 28.06.2023, the Petitioner filed an application before the Respondent No.1 for certified copies but the same has not been issued till date. On 07.08.2023, the Petitioner filed application before the Verification unit for certified copy of their report sent to assessment unit, by Speed Post but the same has not been issued till date. 5 4. Learned counsel for the petitioner submits that no notices and/or orders can be passed legally on dead/non- existence person under the provisions of section 159 of the IT Act, 1961, without initiating the proceedings against the legal representative. He also relied various judgments of the Hon'ble Supreme Court, this High Court and Other High Courts. Learned counsel strenuously contended that since the notices were issued and orders were passed in the year 2021 i.e., much after the death of the Assessee-Bidya Nand Chourasia (husband of the Petitioner) who died on 14.02.2015, in the name of the deceased person without bringing on record the legal heir/legal representative u/s 159 of the Income Tax Act, 1961; the same are liable to be quashed and set aside. He further submits that even if it is presumed that the alleged petition of the Petitioner dated 28.02.2022 informing the death of the Assessee-Bidya Nand Chourasia was not received by the Department; even then no order can be passed on the deceased person. He contended that Section 292B or 292BB of the Act are not applicable as has been held by Hon'ble Apex Court in the case of Principal Commissioner of Income Tax, New Delhi Vs. Maruti Suzuki India Ltd reported in reported in (2020) 18 SCC 331 : [2019] 416 ITR 613 (SC) He further 6 submits that the assessment order and consequential penalty orders are wholly without jurisdiction, non-est and void in view of the decision of Hon'ble Apex Court in the case of Maruti Suzuki India Ltd (supra) and other decisions of this High Court. 5. Learned counsel for the respondents submits that the alleged petition of the Petitioner dated 28.02.2022 informing the respondent No.1 about the death of Bidya Nand Chourasia with death certificate are not in possession of the Department and was not received in the office of the Respondent No.1. Rather it is an absolute lie and is an afterthought, backdated and a fabricated document. As a matter of fact, the Petitioner should have immediately applied for the closure of PAN. As such the department could not know about the fact of death. Learned counsel for the Revenue further submits that there is no dispute on this fact that no notice can be issued on a dead person and no orders can be passed thereafter. But here is a case where no information about the death of the Assessee was given. The provisions of section 161(2), 162 and 167 will apply in relation to a legal representative. Even if it is presumed that the objection was made by the Petitioner on 28.02.2022, it was much after the issue of Notice u/s 148 and 142(1), therefore objection raised by Petitioner cannot sustain in the eyes of law. 7 Learned counsel for the Revenue further contended that as regards ‘Verification unit”, same comes under Faceless Assessment Centre and the Respondent No.1 cannot make any comments on the contentions made by the Petitioner. The entire assessment and imposition of penalties cannot be declared as null and void as the defect, if any, can be cured under section 292B of the Act. 6. Having heard learned counsel for the parties and after going through the averments made in the respective affidavits and the documents annexed therein along with the impugned orders, it transpires that the husband of the Petitioner, namely, Bidya Nand Chourasia, who was an old Assessee of IT Department expired on 14.02.2015. The Petitioner has received a notice under Section 142(1) dated 18.06.2021 by post. In the Acknowledgement while receiving the envelop, the Petitioner has written that the addressee is dead and as such the same is being received by his legal heir (Annexure-1). On checking the IT Portal, it was found that a notice u/s 148 dated 30.0.2021 was uploaded there (Annexure-2). The Petitioner complied with the notice of verification unit dated 14.02.2022 (Annexure-12 of rejoinder) by handing over the Death Certificate of the Assessee. The Petitioner had also filed a petition dated 28.02.2022 before the Respondent no. 1 informing about the death of the Assessee along with death certificate and requested to drop the proceedings. (Annexure- 8 3 & 3/1). Afterward, the Petitioner found that the assessment order u/s 147 r.w.s. 144 r.w.s. 144B dated 13.03.2022 was passed in the name of the deceased Assessee (Annexure-4 & 4/1) raising income tax demand of Rs. 24,72,813/-. Thereafter, three penalties were also imposed (Annexure-5 & 5/1, 6 & 6/1, 7 & 7/1). 7. The main plea of the petitioner in this case is that the ex-parte assessment order and consequential three penalty orders passed on a dead person in pursuance to alleged notice u/s 148 issued on a dead person, Bidya Nand Chourasia, who expired on 14.02.2015, for AY 2015-16 are wholly without jurisdiction, non-est and void. 8. The law in this regard is no more res integra, inasmuch as, no notices and/or orders can be passed legally on dead/non-existence person under the provisions of section 159 of the IT Act, 1961, without initiating the proceedings against the legal representative. Since the notices were issued and orders were passed in the year 2021 i.e., much after the death of the Assessee- Bidya Nand Chourasia (husband of the Petitioner) who died on 14.02.2015, in the name of the deceased person without bringing on record the legal heir/legal representative u/s 159; the same are liable to be quashed and set aside. As a matter of fact, the documents reveal that the petitioner had duly informed to the Department regarding the 9 death of the Assessee by acknowledging the notice sent by the Department and also to the verification team. 9. In the case of Maruti Suzuki India Ltd (supra) it has been held as under: “Para 36. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a coordinate Bench of two learned Judges which dismissed the appeal of the Revenue in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] on 2-11- 2017. The decision in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353] has been followed in the case of the respondent while dismissing the special leave petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment [CIT v. Spice Enfotainment Ltd., (2020) 18 SCC 353].” 10. The issue involved in the instant case has also been considered by this Court in the case Sandeep Chopra, son of late Bhim Sain Chopra, alias, Bhim Sen Chopra vs PCIT, Dhanbad and others W.P.(T) No. 2972 of 2022 Dt. of decision 09.02.2023 wherein it has been held as under:- “Para 11. Having regard to the discussions made hereinabove, notice issued under Section 148 for initiation of reassessment proceeding in the name of the deceased assessee (Bhim Sen Chopra) on his PAN and not in the name of his legal representative is held to be illegal and bad in law. Consequently, since the notice itself has been declared to 10 be null and void, the order passed pursuant to the said notice is also null and void. As a result, the notice dated 18.3.2020 issued under Section 148 of the Act and all consequential orders, passed pursuant to the notice, is non est and void ab initio and accordingly quashed and set aside”. 11. At this stage, it is also profitable to indicate that the law has now also been well settled with regard to the issue that merely because the Department was not intimated about the death of the Assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased Assessee to immediately intimate the death of the Assessee or take steps to cancel the PAN registration. 12. So far as contention of the Revenue regarding applicability of Section 292B or 292BB of the IT Act is concerned; the law is well settled in the case of Maruti Suzuki India Ltd (supra) “Para 32 - …………………… In this case, the notice under Section 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B.” 13. Having regard to the aforesaid discussions and settled legal position, the assessment order and consequential 11 penalty orders deserves to be quashed and set aside. Accordingly, the Assessment Order passed u/s 147 read with section 144 read with section 144B of the Income Tax Act,1961 dated 13.03.2022 raising tax demand of Rs. 24,72,813/- (Annexure-4 & 4/1) and consequential penalty order u/s 271(1)(c) dated 31.08.2022 imposing penalty of Rs.9,40,287/- (Annexure-5 & 5/1), penalty order u/s 271(1)(b) dated 18.08.2022 imposing penalty of Rs. 20,000/- (Annexure-6 & 6/1) and penalty order u/s 271F dated 12.08.2022 imposing penalty of Rs. 5,000/- (Annexure-7 & 7/1), in pursuance to alleged notice u/s 148 issued on 30.03.2021 (Annexure-2) for the Assessment year 2015-16, are hereby, quashed and set aside. 14. As a result, the instant writ application stands allowed and pending I.A., if any, is also closed. (Rongon Mukhopadhyay, J.) (Deepak Roshan, J.) Fahim/- AFR- "