Alamelu Veerappan v. The Income Tax Officer, Noncorporate Ward 2(2), Chennai

In the High Court of Judicature at MadrasDated : 07.6.2018 Coram : The Honourable Mr.Justice T.S.SIVAGNANAMWrit Petition No.30060 of 2017 & WMP.No.32631 of 2017 Alamelu Veerappan...Petitioner Vs The Income Tax Officer, NonCorporate Ward 2(2), Chennai....Respondent PETITION under Article 226 of The Constitution of Indiapraying for the issuance of a Writ of Certiorarified Mandamus tocall for the records of the respondent contained in its noticeissued under Section 148 of the Income Tax Act, 1961 issued inthe name of S.Veerappan dated 30.3.2017, quash the same asarbitrary, unjust and illegal and consequently forbear therespondent from in any manner conducting any proceedings for re-assessment as set out in the said notice dated 30.3.2017 or passany orders consequent thereto under Section 147 of the IncomeTax Act, 1961 for the assessment year 2010-11. For Petitioner :Ms.Deepika SekarFor Respondent :Mrs.Hema Muralikrishnan, SPC ORDER Heard the learned counsel on either side. 2. The petitioner has filed this writ petition praying forthe issuance of a Writ of Certiorarified Mandamus to quash thenotice dated 30.3.2017 issued under Section 148 of the IncomeTax Act, 1961 (hereinafter called the Act) in the name of herdeceased husband one Mr.S.Veerappan and to forbear therespondent from in any manner conducting any proceedings for re-assessment as set out in the said notice dated 30.3.2017 orpassing any consequential orders thereto under Section 147 ofthe Act for the assessment year 2010-11. 3. The petitioner is the wife of the said Mr.S.Veerappan,who died on 26.1.2010 and this fact is not disputed by the https://hcservices.ecourts.gov.in/hcservices/ respondent. The petitioner claims to be a home maker and isliving with the support of her two daughters along with motherin law. The petitioner received a notice dated 30.3.2017addressed to her late husband – the said Mr.S.Veerappan. In thesaid notice, it was stated that certain income of the saidMr.S.Veerappan escaped assessment for the assessment year 2010-11 and that the respondent proposed to re-assess the income forthe said assessment year. The petitioner sent a reply dated04.4.2017 pointing out that her husband died on 26.1.2010 andenclosed a copy of the death certificate to establish the saidfact. 4. The petitioner would state that she was receivingfrequent telephone calls from the office of the respondentcalling upon her to appear before the officer in respect of thenotice dated 30.3.2017 issued in the name of her late husbandunder Section 148 of the Act. The petitioner's case is that shewas repeatedly harassed by way of telephone calls from theIncome Tax Office in spite of her clarification dated 04.4.2017.The petitioner would further state that though the petitionerspecifically stated that she is not aware of any of herhusband's business activities, she was directed to appear for anenquiry. Therefore, left with no option, the petitioner visitedthe office of the respondent on 13.11.2017. The petitioner wasinformed that she should submit all the documents pertaining toher husband's assessment including the details of bank accountstatements for the financial year 2009-10. The petitioner, inturn, informed the officer that she did not have any of thedocuments, which were sought for. In this background, thepetitioner has filed this writ petition challenging the impugnednotice. 5. The learned counsel for the petitioner submits that theimpugned notice is void and unenforceable in law, as it has beenissued to a dead person. The defect in issuing the notice in thename of a dead person goes to the root of the exercise ofjurisdiction under Section 147 of the Act and that the noticeunder Section 148 of the Act is, therefore, a nullity. 5. The learned counsel for the petitioner submits that theimpugned notice is void and unenforceable in law, as it has beenissued to a dead person. The defect in issuing the notice in thename of a dead person goes to the root of the exercise ofjurisdiction under Section 147 of the Act and that the noticeunder Section 148 of the Act is, therefore, a nullity. 6. Relying upon the decision of the Hon'ble Supreme Courtin the case of CIT Vs. Amarchand N.Shroff [reported in AIR 1963SC 1448], it is submitted that no income tax assessment can bemade in the name of a dead person and that the observations madeby the Hon'ble Supreme Court will equally apply to the noticesissued under Section 148 of the Act. It is further submittedthat the petitioner, being the wife of the deceasedMr.S.Veerappan, to whom, the notice under Section 148 of the Actwas issued, cannot be made liable to participate in the re-assessment proceedings. 7. In this regard, she also relies upon the decision of the HighCourt of Madhya Pradesh in the case of Shaikh Abdul Kadar Vs.ITO [reported in AIR 1959 M.P. 101]. Further, relying upon thedecision in the case of Mrs. Kesar Devi Vs. CIT [2010 (321) ITR 341(Raj.)], it is submitted that the notice issued under Section148 of the Act to a dead person is illegal. 8. Much reliance has been placed on the decision of theHigh Court of Delhi in the case of Vipin Walia Vs. ITO [reportedin (2016) 382 ITR 19], which was followed by the High Court ofGujarat at Ahmedabad in the case of Rasid Lala Vs. ITO [SpecialLeave Application No.18987 of 2016 dated 29.11.2016]. 9. Therefore, it is submitted by the learned counsel forthe petitioner that the impugned notice is liable to be quashed.It is further submitted that the defect, which has occurred, isnot curable and that the Revenue cannot place reliance onSection 292B of the Act in support of their stand, as the saidprovision has no applicability to the facts of this case. On theabove grounds, the learned counsel for the petitioner has soughtfor quashing the impugned proceedings. 10. However, the learned Senior Panel Counsel for the Revenuesubmits that though the Revenue does not dispute the factum ofdeath of the said Mr.S.Veerappan on 26.1.2010, as evidenced fromthe death certificate, the factum of death was not reported bythe petitioner to the Department and that the PAN registrationin the name of the dead person has not been cancelled.Therefore, the Department was fully justified in issuing thenotice in the name of the deceased assessee and that the notice,having been issued before the end of the period of limitation,i.e. 30.3.2017, is valid in the eye of law. 11. It is further submitted by the learned Senior Panel Counselthat the Department, after having knowledge of the death of theassessee, as intimated by the petitioner, issued notice to thepetitioner and directed her to produce the documents and tocooperate in the reopening proceedings. It is also submittedthat there is no defect in the issuance of the notice dated30.3.2017 and in any event, even assuming without conceding thatthe notice is defective, the same is a curable defect, which wascured by the issue of the proceedings in the name of the writpetitioner in her capacity as the legal heir of the deceased –the said Mr.S.Veerappan. It is submitted that the impugnednotice under Section 148 of the Act was issued within the periodof limitation and thereafter, on coming to know of the death ofthe assessee, the impugned proceedings continued in the name ofthe legal heirs by issuing the notice under Section 142 ascontemplated under the Act. 12. The learned Senior Panel Counsel for the Revenue has alsorelied upon the decision of the High Court of Delhi in the caseof Sky Light Hospitality LLP Vs. AC (CT) [reported in (2018) 90Taxmann.Com 413]. By referring to this decision, she has https://hcservices.ecourts.gov.in/hcservices/ 12. The learned Senior Panel Counsel for the Revenue has alsorelied upon the decision of the High Court of Delhi in the caseof Sky Light Hospitality LLP Vs. AC (CT) [reported in (2018) 90Taxmann.Com 413]. By referring to this decision, she has https://hcservices.ecourts.gov.in/hcservices/ submitted that the High Court of Delhi considered the decisionin the case of Spice Entertainment Ltd. Vs. CST [reported in(2011) SCC Online Del. 3210] and held that the notice issued inthe case of Sky Light Hospitality LLP was a nullity and thaterrors and mistakes can be corrected. Therefore, it is submittedthat the petitioner should respond to the notice, file herobjections and participate in the proceedings. 13. This Court has carefully considered the submissionsmade by the learned counsel on either side and perused therecords. 14. The issue, which falls for consideration, is as towhether the impugned notice under Section 148 of the Act issuedin the name of the dead person - the said Mr.S.Veerappan isenforceable in law and the subsidiary issue being as to whetherthe petitioner, being the wife of the said Mr.S.Veerappan, canbe compelled to participate in the proceedings and respond tothe impugned notice. The fact that the said Mr.S.Veerappan diedon 26.1.2010 is not in dispute. If this fact is not disputed,then the notice issued in the name of the dead person isunenforceable in the eye of law. 15. The Department seeks to justify their stand bycontending that they were not intimated about the death of theassessee, that the legal heirs did not take any steps to cancelthe PAN registration in the name of the assessee and thattherefore, the Department was justified in directing thepetitioner to cooperate in the proceedings pursuant to theimpugned notice. 16. The settled legal principle being that a notice issuedin the name of the dead person is unenforceable in law. If suchis the legal position, would the Revenue be justified incontending that they, having no knowledge about the death of theassessee, are entitled to plead that the notice is notdefective. In my considered view, the answer to the questionshould be definitely against the Revenue. 17. This Court supports such a conclusion with thefollowing reasons :Admittedly, the limitation period for issuance of noticefor reopening expired on 31.3.2017. The impugned notice wasissued on 30.3.2017 in the name of the dead person. On beingintimated about the death, the Department sent the notice to thepetitioner - his spouse to participate in the proceedings. Thisnotice was well beyond the period of limitation, as it has beenissued after 31.3.2017. If we approach the problem sanscomplicated facts, a notice issued beyond the period oflimitation i.e. 31.3.2017 is a nullity, unenforceable in law and https://hcservices.ecourts.gov.in/hcservices/ without jurisdiction. Thus, merely because the Department wasnot intimated about the death of the assessee, that cannot, byitself, extend the period of limitation prescribed under theStatute. Nothing has been placed before this Court by theRevenue to show that there is a statutory obligation on the partof the legal representatives of the deceased assessee toimmediately intimate the death of the assessee or take steps tocancel the PAN registration. https://hcservices.ecourts.gov.in/hcservices/ without jurisdiction. Thus, merely because the Department wasnot intimated about the death of the assessee, that cannot, byitself, extend the period of limitation prescribed under theStatute. Nothing has been placed before this Court by theRevenue to show that there is a statutory obligation on the partof the legal representatives of the deceased assessee toimmediately intimate the death of the assessee or take steps tocancel the PAN registration. 18. In such circumstances, the question would be as towhether Section 159 of the Act would get attracted. The answerto this question would be in the negative, as the proceedingsunder Section 159 of the Act can be invoked only if theproceedings have already been initiated when the assessee wasalive and was permitted for the proceedings to be continued asagainst the legal heirs. The factual position in the instantcase being otherwise, the provisions of Section 159 of the Acthave no application. 19. The Revenue seeks to bring theircase under Section 292 of the Act to state that the defect is acurable defect and on that ground, the impugned notice cannot bedeclared as invalid. 20. The language employed in Section 292 of the Act iscategorical and clear. The notice has to be, in substance andeffect, in conformity with or according to the intent andpurpose of the Act. Undoubtedly, the issue relating tolimitation is not a curable defect for the Revenue to invokeSection 292B of the Act. 21. All the above reasons are fully supported by thedecision in the case of Vipin Walia. In that case, the noticedated 27.3.2015 was issued under Section 148 of the Act to theassessee, who died on 14.3.2015. The validity of the said noticewas put to challenge. The Income Tax Officer took a stand thatsince the intimation of death of the assessee on 14.3.2015 wasnot received by her, the notice was issued on a dead person.However, the fact regarding the death of the assessee could notbe disputed by the Department. The Department continued theproceedings under Section 147/ 148 of the Act and at that stage,the son of the deceased approached the High Court of Delhi. TheHigh Court of Delhi pointed out that what was sought to be doneby the Income Tax Officer was to initiate proceedings underSection 147 of the Act against the deceased assessee for theassessment year 2008-09, for which, the limitation for issuanceof notice under Section 147/148 of the Act was 31.3.2015 and on02.7.2015 when the notice was issued, the assessee was alreadydead and if the Department intended to proceed under Section 147of the Act, it could have done so prior to 31.3.2015 by issuingthe notice to the legal heirs of the deceased and beyond thatdate, it could not have proceeded in the matter even by issuing notice to the legal representatives of the assessee. Thedecision in Vipin Walia fully supports the case of thepetitioner herein. 22. The decision in the case of Vipin Walia was followed inthe decision of the High Court of Gujarat in the case of RasidLala, in which, the re-assessment proceedings were initiatedagainst the dead person, that too, after a long delay. The Courtpointed out that even if the provisions of Section 159 of theAct are attracted, in that case also, the notice was required tobe issued against and in the name of the heirs of the deceasedassessee and under the said circumstances, Section 159 of theAct shall not be of any assistance to the Revenue. notice to the legal representatives of the assessee. Thedecision in Vipin Walia fully supports the case of thepetitioner herein. 22. The decision in the case of Vipin Walia was followed inthe decision of the High Court of Gujarat in the case of RasidLala, in which, the re-assessment proceedings were initiatedagainst the dead person, that too, after a long delay. The Courtpointed out that even if the provisions of Section 159 of theAct are attracted, in that case also, the notice was required tobe issued against and in the name of the heirs of the deceasedassessee and under the said circumstances, Section 159 of theAct shall not be of any assistance to the Revenue. 23. In the decision of the Delhi High Court in the case ofSpice Entertainment Ltd., one of the questions, which fell forconsideration, is as to whether such framing of assessmentagainst a non existing entity or a dead person could be broughtwithin the ambit of Section 292B of the Act and after referringto the decisions on the point including the decision of theAllahabad High Court in the case of Sri Nath Suresh Chand RamNaresh Vs. CIT [reported in (2006) 280 ITR 396], it has beenheld that the provisions of Section 292B of the Act are notapplicable and that framing of assessment against a non existingentity/person goes to the root of the matter, which is not aprocedural irregularity, but a jurisdictional defect, as therecannot be any assessment against a dead person. 24. The learned Senior Standing Counsel for the Revenue hassought to distinguish the decision in the case of SpiceEntertainment Ltd., by referring to Sky Light Hospitality LLP. 25. On a perusal of the factual position therein, the Courtcame to the conclusion that the defect was curable because itwas held that the notice was not addressed to the correct nameand that the PAN mentioned was also incorrect. The factualbackground was taken into consideration and the Court held thaterrors and mistakes cannot and should not nullify theproceedings, which are otherwise valid and that no prejudice hadbeen caused, as this being the mandate of Section 292B of theAct. The decision in the case of Sky Light Hospitality LLP isclearly distinguishable on facts and it does not support thecase of the Revenue. 26. For all the above reasons, this court holds that theimpugned notice is wholly without jurisdiction and cannot beenforced against the petitioner. 27. Accordingly, the writ petition is allowed as prayedfor. No costs. Consequently, the connected WMP is closed. Sd/-Assistant Registrar(CS III) //True copy// Sub Assistant Registrar ToThe Income Tax Officer,Non Corporate Ward 2(2), Chennai.+1cc to Mr.Hema Muralikrishnan, Advocate SR.No.35585+1cc to Mr.Arun karhik Mohan, Advocate SR.No.35527RSWP.No.30060 of 2017&WMP.No.32631 of 2017GN(18/06/2018)