Hansaben Lalubhai Gokalbhai v. The Income Tax Officer Ward 2(2)(2), Surat

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 20842 of 2019 =========================================================HANSABEN LALUBHAI GOKALBHAI Versus THE INCOME TAX OFFICER WARD 2(2)(2), SURAT ============================================================== Appearance:MR B S SOPARKAR(6851) for the Petitioner(s) No. 1MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ============================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MR. JUSTICE ILESH J. VORAandHONOURABLE MR. JUSTICE ILESH J. VORA Date : 22/03/2021 ORAL ORDER (PER : HONOURABLE MR. JUSTICE ILESH J. VORA) 1. By filing this writ application under Article 226 of theConstitution of India, the writ applicant seeks to challengethe Notices dated 28.03.2019 (Annexure-A and B) issuedby the respondent under Section 148 of the Income TaxAct, 1961 (for short “the Act, 1961”) seeking to reopen thewrit applicant’s income tax assessment for the A.Y. 2012-13.Constitution of India, the writ applicant seeks to challengethe Notices dated 28.03.2019 (Annexure-A and B) issuedby the respondent under Section 148 of the Income TaxAct, 1961 (for short “the Act, 1961”) seeking to reopen thewrit applicant’s income tax assessment for the A.Y. 2012-13. 2. Brief facts of the case can be summarized as under: (i)Mr. Lalubhai Gokalbhai was non-filer for A.Y 2012-13. He died on 16.05.2014. The AO was in receipt of theinformation that, Lalubhai Gokalbhai had deposited cashamount of Rs.57,76,730/- in the bank accountsmaintained with HDFC Bank & Surat Dist. CooperativeBank and had purchased units of mutual funds for variouscompanies amounting to Rs.5,06,00,000/-. 13. He died on 16.05.2014. The AO was in receipt of theinformation that, Lalubhai Gokalbhai had deposited cashamount of Rs.57,76,730/- in the bank accountsmaintained with HDFC Bank & Surat Dist. CooperativeBank and had purchased units of mutual funds for variouscompanies amounting to Rs.5,06,00,000/-. (ii)On 28.01.2019, notice under Section 133 (6) of theIncome Tax Act for verification of transactions made byShri Lalubhai Gokalbhai for the A.Y. 2012-13 was issued; (iii)Pursuant to the notice dated 28.01.2019, the writapplicant being a wife of Lalubhai Gokalbhai had filedreply, stating inter alia that, her husband is died on16.05.2014 and also sought necessary details with respectto the cash deposition and the investment as mentioned inthe notice; (iv)Vide letter dated 18.02.2019, the writ applicant hadfurnished necessary details of the cash deposition assought for by the revenue vide its notice dated 28.01.2019; (v)The case was reopened in the name of legal heir Smt.Hansaben Lalubhai Gokalbhai - wife of the deceasedassessee and on 28.03.2019, the impugned noticesaddressed to Lalubhai Gokalbhai and Smt. HansabenLalubhai Gokalbhai, legal heirs of late Lalubhai Gokalbhaiwere issued under Section 148 of the Act on the groundthat, AO has ‘reason to believe’ that the cash depositionand investment made in the mutual funds is liable for taxand has escaped assessment; (vi)The writ applicant filed her objections against theimpugned notice, vide letter dated 24.04.2019, inter alia,contending that, the notice issued in the name of LalubhaiGokalbhai is bad in law since the reassessment noticecannot be issued in the name of deceased person andtherefore, the initiation of reassessment proceedings is badin law and against the provisions of the Act and notice under Section 148 is to be treated as invalid and requestedto drop the reassessment proceedings. (vii)The objections filed by the writ applicant came to berejected by the revenue vide order dated 17.09.2019observing as under: (vi)The writ applicant filed her objections against theimpugned notice, vide letter dated 24.04.2019, inter alia,contending that, the notice issued in the name of LalubhaiGokalbhai is bad in law since the reassessment noticecannot be issued in the name of deceased person andtherefore, the initiation of reassessment proceedings is badin law and against the provisions of the Act and notice under Section 148 is to be treated as invalid and requestedto drop the reassessment proceedings. (vii)The objections filed by the writ applicant came to berejected by the revenue vide order dated 17.09.2019observing as under: “1. In this case, from the ITD System it was gathered thatthe assessee is non-filer for A.Y.2012-13, Further, it wasgathered from AIR/CIB information that the assesseehas deposited cash in bank account maintained withHDFC and Surat Dist. Co, Op. Bank for Rs.57,76,730/-.As per the said information, the assessee had alsopurchased units of Mutual Funds of various companiesfor Rs.5,06,00,000/-. These information were primarilyverified by issuing notices u/s. 133(6) of the I.T. Act. Theissue of cash deposit made by the assessee as well assource of purchases of mutual funds were remainedunverified during verification. Therefore, after recordingreason to. believe that income to_the extent ofRs,.5,63,76,730/has escaped the assessment forA.Y.2012-13 by reason of failure on the part of theassessee to file his return of income. It.is pertinent tomention here that during the verification process, Smt.Hansaben Lalu Gokalbhai, Wife of Lalu Gokalbhai hadreplied vide letter dated Nil received in this office on14.02.2019 that her husband Lalu Gokalbhai wasexpired on 16.05.2014. Therefore, the case was re-opened u/s. 147 of the I.T. Act in the name of legal heirafter taking approval 0320 petent authority vide letterNo. SRT/Pr.CIT 2/HQ/147/Wart-2(2)(2)/2018-19 dated28.03.2019 \and notice u/s. 148 was issued to Smt.Hansa Lalu Gokalbhai, L/h of Late Shri tak Albhai whichwas duly served upon the legal heir of the assessee. 2. Smt. Hansa Lalu Gokalbhai, Uh. of the. assessee videletter dated 24.04.2019 received in this office on26.04.2019 has raised objection mainly related to issuethat the assessee has expired on 16.05.2014 and noticeissued u/s. 148 of the Act to a deceased person is bad inlaw as reassessment notice cannot be issued in thename of deceased person. The assessee has also reliedupon the various judgments of the Hon'ble Courts. 3, The objections filed against reopening of the case bythe assessee have been gone through by the undersignedand duly considered. However, the same is not foundacceptable on merits. In this case, the case has been re-opened in the name of legal heir Smt. Hansa Lalu Gokalbhai, wife of the deceased assessee Late Shri LaluGokalbhai. Hence, the contention put forth by the legalheir of the deceased assessee is incorrect and notacceptable as per law. Moreover, it is important tomention that during the verification process, the legal heirSmt. Hansa Lalu Gokalbhai of the deceased assesseehas stated in her reply vide letter dated Nil received on14.02.2019 that she will provide the details to the bestpossible extent and raised no objection towards anyverification or proceedings to be initiated in future. 4. Considering the facts and circumstances of the case,the objections of the assessee against the re-opening ofthe case are hereby rejected. However, it may please beClarified that your submission/evidences will be dulyconsidered at the time of fresh assessment proceedingsand the fresh assessment will be made after evaluatingthe submission and evidences filed by you.” 4. Considering the facts and circumstances of the case,the objections of the assessee against the re-opening ofthe case are hereby rejected. However, it may please beClarified that your submission/evidences will be dulyconsidered at the time of fresh assessment proceedingsand the fresh assessment will be made after evaluatingthe submission and evidences filed by you.” 3. Being aggrieved by the impugned notices as well as theorder of disposing of the objections, the writ applicant hascome up before this Court with the present writ applicationand prayed to quash and set aside the impugned noticesdated 28.03.2019 at Annexure-A & B to this writapplication.order of disposing of the objections, the writ applicant hascome up before this Court with the present writ applicationand prayed to quash and set aside the impugned noticesdated 28.03.2019 at Annexure-A & B to this writapplication. 4. We have heard Mr. B.S.Soparkar, the learned counselappearing for the writ applicant and Mrs. Kalpana Raval,the learned Sr. Standing Counsel assisted by Mr. NikuntRaval, the learned counsel for the Revenue. appearing for the writ applicant and Mrs. Kalpana Raval,the learned Sr. Standing Counsel assisted by Mr. NikuntRaval, the learned counsel for the Revenue. 5. Mr. B.S.Soparkar, the learned counsel appearing for thewrit applicant would submit that, the impugned Noticesare absolutely bad in law and against the provisions ofstatute, more particularly under Section 147 of the Act;that the proceedings under Section 147 of the Act havebeen initiated against the dead person as deceased wasexpired prior to the issuance of the notice under Section148 of the Act; that the action of the respondent is withoutwrit applicant would submit that, the impugned Noticesare absolutely bad in law and against the provisions ofstatute, more particularly under Section 147 of the Act;that the proceedings under Section 147 of the Act havebeen initiated against the dead person as deceased wasexpired prior to the issuance of the notice under Section148 of the Act; that the action of the respondent is without jurisdiction in issuing the impugned notice against adeceased person; that the revenue was aware about thedeath of the assessee as the writ applicant had informedabout the same vide her letter dated 14.02.2019 andenclosed the death certificate and therefore, notice againstthe dead person is invalid; that merely supplying ofinformation by the writ applicant does not confer thejurisdiction upon the respondent to issue notice as the writapplicant has never participated in the assessment afterthe issuance of the notice; that no notice issued in thename of the writ applicant and only one notice issued inthe name of Lalubhai Gokalbhai (deceased); that it appearsthat, there is no distinct notices and the attempt on thepart of the revenue to paste on the notice issued in thename of Lalubhai Gokalbhai replacing his name to the writapplicant is absolutely deplorable. 6. In view of the aforesaid contentions raised by the learnedCounsel appearing for the writ applicant, it is submittedthat, the impugned notice issued in the name of thehusband of the writ applicant (Lalu Gokalbhai) is the onlynotice issued by the revenue and therefore, notice issuedon the name of dead person is required to be quashed andset aside. Counsel appearing for the writ applicant, it is submittedthat, the impugned notice issued in the name of thehusband of the writ applicant (Lalu Gokalbhai) is the onlynotice issued by the revenue and therefore, notice issuedon the name of dead person is required to be quashed andset aside. 6. In view of the aforesaid contentions raised by the learnedCounsel appearing for the writ applicant, it is submittedthat, the impugned notice issued in the name of thehusband of the writ applicant (Lalu Gokalbhai) is the onlynotice issued by the revenue and therefore, notice issuedon the name of dead person is required to be quashed andset aside. Counsel appearing for the writ applicant, it is submittedthat, the impugned notice issued in the name of thehusband of the writ applicant (Lalu Gokalbhai) is the onlynotice issued by the revenue and therefore, notice issuedon the name of dead person is required to be quashed andset aside. 7. On the other hand, Mrs. Kalpana Raval, the learned Sr.Standing Counsel appearing for the Revenue opposed thewrit application contending that the action taken by the AOis just, legal and proper and does not warrant anyinterference. It was submitted that, deceased was non-filerfor the A.Y. 2012-13 and the explanation furnished by theStanding Counsel appearing for the Revenue opposed thewrit application contending that the action taken by the AOis just, legal and proper and does not warrant anyinterference. It was submitted that, deceased was non-filerfor the A.Y. 2012-13 and the explanation furnished by the writ applicant was not satisfactory and the transactionsremained unverified during the verification proceedingsand therefore, the case was reopened in the name of legalheir after taking approval from the competent authorityand notice issued under Section 148 of the Act in the nameof Smt. Hansaben Lalubhai, legal heirs of late ShriLalubhai Gokalbhai, which was duly served upon her. 8. In view of the aforesaid contentions, the learned counselfor the revenue submits that, there being no merits in thewrit application, the same deserved to be dismissed.for the revenue submits that, there being no merits in thewrit application, the same deserved to be dismissed. 9. Mr. B.S.Soparkar, learned counsel for the writ applicantraised the substantial issue with regard to the valid noticeas the notice is the foundation of validity of assessment.Reliance was placed upon the decision of this Court in thecase of Chandreshbhai Jayantibhai Patel Vs. IncomeTax Officer to submit that, theimpugned notice which is jurisdictional notice, has beenissued to a dead person and the impugned notice (atAnnexure-B) served upon the writ applicant bearingidentical notice number, wherein, on the name of assessee,an additional piece of paper is pasted bearing the name ofthe writ applicant, which cannot be said to be two distinctnotices and the defect in the notice goes to the root of thevalidity of the notice and is not an inadvertent error to cureunder Section 292B of the Act and therefore, the noticealleged to have issued in the name of the writ applicant aslegal heir be required to be quashed and set aside. 10.On the other hand, the stance of the revenue is that, thenotices are distinct and the notice (at Annexure-B) wasserved to the writ applicant and therefore, by virtue of sub-section (3) of Section 159 of the Act, the writ applicantshall for the purposes of the Act, be deemed to be anassessee and in view of Section 292B of the Act, the noticeserved upon the writ applicant is valid and legal. notices are distinct and the notice (at Annexure-B) wasserved to the writ applicant and therefore, by virtue of sub-section (3) of Section 159 of the Act, the writ applicantshall for the purposes of the Act, be deemed to be anassessee and in view of Section 292B of the Act, the noticeserved upon the writ applicant is valid and legal. 11.We have considered the submissions advanced by learnedcounsel for the respective parties and perused the casepapers.counsel for the respective parties and perused the casepapers. 11.We have considered the submissions advanced by learnedcounsel for the respective parties and perused the casepapers.counsel for the respective parties and perused the casepapers. 12.In the present case, we find that, impugned notice dated28.03.2019 under Section 148 of the Act addressed toLalubhai Gokalbhai was issued to a dead person. Thereason is that, the revenue had served notice dated28.01.2019 under Section 133(6) of the Act which was inthe name of Lalubhai Gokalbhai and the same was repliedby the writ applicant vide her letter dated 14.12.2019 interalia stating that, her husband Lalubhai Gokalbhai died on16.05.2014, therefore, the revenue was aware that, prior tothe issuance of impugned notice, the assessee LalubhaiGokalbhai died. Record indicates that, the writ applicantbeing a legal representative of the deceased raised theobjection and did not have filed any return of income.Under such circumstances, we have no hesitation to holdthat, the impugned notice dated 28.03.2019, issued in thename of Lalubhai Gokalbhai (at Annexure-A) was issued toa dead person and is liable to be quashed and set aside. 28.03.2019 under Section 148 of the Act addressed toLalubhai Gokalbhai was issued to a dead person. Thereason is that, the revenue had served notice dated28.01.2019 under Section 133(6) of the Act which was inthe name of Lalubhai Gokalbhai and the same was repliedby the writ applicant vide her letter dated 14.12.2019 interalia stating that, her husband Lalubhai Gokalbhai died on16.05.2014, therefore, the revenue was aware that, prior tothe issuance of impugned notice, the assessee LalubhaiGokalbhai died. Record indicates that, the writ applicantbeing a legal representative of the deceased raised theobjection and did not have filed any return of income.Under such circumstances, we have no hesitation to holdthat, the impugned notice dated 28.03.2019, issued in thename of Lalubhai Gokalbhai (at Annexure-A) was issued toa dead person and is liable to be quashed and set aside. 13.We have carefully examined the impugned notice dated28.03.2019 (at Annexure-B) which was issued in the nameof Hansaben Lalubhai – legal representative of thedeceased, the writ applicant. It has been vehementlysubmitted by learned advocate Mr. B.S.Soparkar that, thenotice issued in the name of Gokalbhai Lalubhai wasserved upon the writ applicant replacing the name of herhusband by pasting the paper as the notice number of botthe notices are same. We are not convinced with thesubmission of the learned counsel Mr. Soparkar. We havecarefully examined the case record. It is true that, thenotice number of both the notices (at Annexures-A & B) aresame. It appears from the record that, the notice atAnnexure-A had been uploaded on web portal, whereas,the notice at Annexure-B addressed to the writ was servedupon the writ applicant. A bare perusal of the orderdisposing of the objections against reopening of theassessment, it was observed by the AO that, the case hasbeen reopened in the name of legal heir Smt. HansabenLalubhai Gokalbhai, wife of the deceased assessee as theassessee did not have filed his return of income for theyear under consideration and the income ofRs.5,63,76,730/- is liable for tax, has escaped assessment.In this context, we are of the considered view that, afteruploading the impugned notice at Annexure-A on the webportal, the revenue took corrective measure as providedunder Section 292B of the Act and issued a fresh notice (atAnnexure-B) to the writ applicant as legal heir of thedeceased. 14.Section 292B of the Income Tax Act is required to bereferred which reads as under:-referred which reads as under:- 14.Section 292B of the Income Tax Act is required to bereferred which reads as under:-referred which reads as under:- “Section 292B. - Return of income, etc., not to be invalid oncertain grounds No return of income, assessment, notice,summons or other proceeding, furnished or made or issued ortaken or purported to have been furnished or made or issuedor taken in pursuance of any of the provisions of this Act shallbe invalid or shall be deemed to be invalid merely by reason ofany mistake, defect or omission in such return of income,assessment, notice, summons or other proceeding if suchreturn of income, assessment, notice, summons or otherproceeding is in substance and effect in conformity with oraccording to the intent and purpose of this Act.”certain grounds No return of income, assessment, notice,summons or other proceeding, furnished or made or issued ortaken or purported to have been furnished or made or issuedor taken in pursuance of any of the provisions of this Act shallbe invalid or shall be deemed to be invalid merely by reason ofany mistake, defect or omission in such return of income,assessment, notice, summons or other proceeding if suchreturn of income, assessment, notice, summons or otherproceeding is in substance and effect in conformity with oraccording to the intent and purpose of this Act.” 15.In view of the facts and circumstance of the present caseand the legal provisions as referred to above, we are of theconsidered view that the notice at Annexure-B dated28.03.2019 is a distinct and fresh notice and has beenrightly issued to the writ applicant as legal heir andrepresentative of the deceased and therefore, the noticeissued under Section 148 of the Act cannot be said to beinvalid and bad in law. It is also pertinent to note that, thePrincipal Commissioner of Income Tax had perused thereasons recorded by the AO and relevant facts andinformation available on record and was satisfied that it isa fit case for issuanee of Notice under Section 148 of theAct. and the legal provisions as referred to above, we are of theconsidered view that the notice at Annexure-B dated28.03.2019 is a distinct and fresh notice and has beenrightly issued to the writ applicant as legal heir andrepresentative of the deceased and therefore, the noticeissued under Section 148 of the Act cannot be said to beinvalid and bad in law. It is also pertinent to note that, thePrincipal Commissioner of Income Tax had perused thereasons recorded by the AO and relevant facts andinformation available on record and was satisfied that it isa fit case for issuanee of Notice under Section 148 of theAct. 16.In view of the foregoing reasons, the writ application isallowed in part. The notice dated 28.03.2019 at Annexure-A is hereby quashed and set aside. allowed in part. The notice dated 28.03.2019 at Annexure-A is hereby quashed and set aside. J. B. PARDIWALA, J) (ILESH J. VORA,J)