Legal Heirs Of Smt. Sneh Lata Bhandari, Through v. Income Tax Officer, Ward 3(1), Jodhpur

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 9985/2023 Legal Heirs Of Smt. Sneh Lata Bhandari, Through (1) Smt. Richa Jain W/o Shri Naresh Jain, Daughter OfLate Shri Suresh Chand Bhandari And Late Smt. SnehLata Bhandari, Aged About 50 Years, Resident Of 601, G-5, Vastu Heights, Sundervan Complex, Lokhadwala Road,Andheri West, Mumbai 400053. ----Petitioners Versus 1. Income Tax Officer, Ward 3(1), Jodhpur. 2. The Joint Commissioner Of Income Tax, Range 3, Jodhpur. 3. The Principal Chief Commissioner Of Income Tax, NewCentral Revenue Building, Bhagwan Dass Road, Jaipur302005.Central Revenue Building, Bhagwan Dass Road, Jaipur302005. 4. Legal Heirs Of Smt. Snehlata Bhandari, Through(a) Smt. Swapna Patawari W/o Shri Manoj Patawari,Daughter Of Late Shri Suresh Chand Bhandari And LateSmt. Sneh Lata Bhandari, Resident Of 12, Roop RajatSarovar, Pal Link Road, Jodhpur 342003.(a) Smt. Swapna Patawari W/o Shri Manoj Patawari,Daughter Of Late Shri Suresh Chand Bhandari And LateSmt. Sneh Lata Bhandari, Resident Of 12, Roop RajatSarovar, Pal Link Road, Jodhpur 342003. (b) Manoj Bhandari S/o Late Shri Suresh Chand BhandariAnd Late Smt. Sneh Lata Bhandari, Aged About 54 Years,Resident Of 262, Hari Nagar, Jhanwar Road, Jodhpur342001 (Rajasthan).And Late Smt. Sneh Lata Bhandari, Aged About 54 Years,Resident Of 262, Hari Nagar, Jhanwar Road, Jodhpur342001 (Rajasthan). ----Respondents For Petitioner(s): Mr. Sheetal Kumbhat For Respondent(s): Mr. Sunil Bhandari for respondents No.1 to 3 Mr. Tapendra Sankhla for respondentsNo.4(a) and 4(b)No.4(a) and 4(b) HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI HON'BLE MR. JUSTICE MUNNURI LAXMAN Order 27/02/2024 1.The present petition has been preferred with the following prayers:- “(a) by an appropriate writ, order and/or direction, the show cause Notice under Section 148 dated 30.03.2023 (Annexure-3) issued upon the deceased assessee and consequential proceedings in furtherance thereto including Letter/Order dated 19.04.2023(Annexure–6),Noticedated 21.04.2023 (Annexure-7) and order dated21.04.2023 (Annexure-8) passed under Section 148A(d) of the Income Tax Act, 1961 may kindly be quashed and set aside; and (b) any other appropriate writ, order or direction which this Hon’ble Court consider just and properin the facts and circumstances of the case may bepassed in favour of the petitioners.” 2.Brief facts as noticed by this Court are that the assessee Smt. Sneh Lata Bhandari passed away way back on 16.05.2018,but a show cause notice was issued to her under Section 148A(b)of the Income Tax Act, 1961 (hereinafter referred to as “the Act of1961”) on 30.03.2023. 3.Mr. Sheetal Kumbhat, learned counsel for the petitionersubmits that the show cause notice could not have been issued toa dead person and by the time such order was passed, the legalrepresentatives of the deceased Smt. Sneh Lata Bhandari werebrought on record and a decision was taken to proceed underSection 148 of the Act of 1961 and without complying themandatory provisions of Section 148A of the Act of 1961, a notice(Annexure-7) was issued to her on 21.04.2023. 4.Upon being asked, Mr. Sunil Bhandari, learned counsel forthe respondents submitted that the Section 159 of the Act of 1961creates almost the same liability upon the legal heirs as he stepinto the shoes of assessee for the purpose of assessment orreassessment upon the legal representatives of the deceased assessee. Thus the Department was entitled to proceed againstthe legal representatives. 5.This Court has heard the submissions from both the sides. 6.Sections 148A and 159 of the Act of 1961 reads thus:- -148A.Conductinginquiry,providingopportunity before issue of notice underSection 148.—The Assessing Officer shall, beforeissuing any notice under Section 148,— 4.Upon being asked, Mr. Sunil Bhandari, learned counsel forthe respondents submitted that the Section 159 of the Act of 1961creates almost the same liability upon the legal heirs as he stepinto the shoes of assessee for the purpose of assessment orreassessment upon the legal representatives of the deceased assessee. Thus the Department was entitled to proceed againstthe legal representatives. 5.This Court has heard the submissions from both the sides. 6.Sections 148A and 159 of the Act of 1961 reads thus:- -148A.Conductinginquiry,providingopportunity before issue of notice underSection 148.—The Assessing Officer shall, beforeissuing any notice under Section 148,— (a) conduct any enquiry, if required, with the priorapproval of specified authority, with respect to theinformation which suggests that the incomechargeable to tax has escaped assessment; (b) provide an opportunity of being heard tothe assessee, [***], by serving upon him anotice to show cause within such time, as maybe specified in the notice, being not less than sevendays and but not exceeding thirty days from thedate on which such notice is issued, or such time,as may be extended by him on the basis of anapplication in this behalf, as to why a noticeunder Section 148 should not be issued on thebasis of information which suggests thatincome chargeable to tax has escapedassessmentin his case for the relevantassessment year and results of enquiry conducted,if any, as per clause (a); (c) consider the reply of assessee furnished, if any,in response to the show-cause notice referred to inclause (b); (d) decide, on the basis of material available onrecord including reply of the assessee, whether ornot it is a fit case to issue a notice under Section 148, by passing an order, with the prior approval ofspecified authority, within one month from the endof the month in which the reply referred to inclause (c) is received by him, or where no suchreply is furnished, within one month from the endof the month in which time or extended timeallowed to furnish a reply as per clause (b) expires:Provided that the provisions of this section shall notapply in a case where,— (a) a search is initiated under Section 132 or booksof account, other documents or any assets arerequisitioned under Section 132-A in the case ofthe assessee on or after the 1st day of April, 2021;or (b) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any money, bullion, jewellery orother valuable article or thing, seized in a searchunder Section 132 or requisitioned under Section132-A, in the case of any other person on or afterthe 1st day of April, 2021, belongs to the assessee;or (c) the Assessing Officer is satisfied, with the priorapproval of the Principal Commissioner orCommissioner that any books of account ordocuments, seized in a search under Section 132 orrequisitioned under Section 132-A, in case of anyother person on or after the 1st day of April, 2021,pertains or pertain to, or any information containedtherein, [relate to, the assessee; or (d) the Assessing Officer has received anyinformation under the scheme notified underSection 135-A pertaining to income chargeable to tax escaping assessment for any assessment yearin the case of the assessee. Explanation.—For the purposes of this section,specified authority means the specified authorityreferred to in Section 151. 159. Legal representatives.—(1)Where aperson dies, his legal representative shall beliable to pay any sum which the deceasedwould have been liable to pay if he had notdied,in the like manner and to the same extent asthe deceased. (2) For the purpose of making an assessment(including an assessment, reassessment orrecomputation under Section 147) of the income ofthe deceased and for the purpose of levying anysum in the hands of the legal representative inaccordance with the provisions of sub-section (1),— tax escaping assessment for any assessment yearin the case of the assessee. Explanation.—For the purposes of this section,specified authority means the specified authorityreferred to in Section 151. 159. Legal representatives.—(1)Where aperson dies, his legal representative shall beliable to pay any sum which the deceasedwould have been liable to pay if he had notdied,in the like manner and to the same extent asthe deceased. (2) For the purpose of making an assessment(including an assessment, reassessment orrecomputation under Section 147) of the income ofthe deceased and for the purpose of levying anysum in the hands of the legal representative inaccordance with the provisions of sub-section (1),— (a) any proceeding taken against the deceasedbefore his death shall be deemed to have beentaken against the legal representative and may becontinued against the legal representative from thestage at which it stood on the date of the death ofthe deceased; (b) any proceeding which could have been takenagainst the deceased if he had survived, may betaken against the legal representative; and (c) all the provisions of this Act shall applyaccordingly. (3) The legal representative of the deceasedshall, for the purposes of this Act, be deemedto be an assessee. (4) Every legal representative shall be personallyliable for any tax payable by him in his capacity as legal representative if, while his liability for taxremains undischarged, he creates a charge on ordisposes of or parts with any assets of the estate ofthe deceased, which are in, or may come into, hispossession, but such liability shall be limited to thevalue of the asset so charged, disposed of or partedwith. (5) The provisions of sub-section (2) of Section161, Section 162 and Section 167, shall, so far asmay be and to the extent to which they are notinconsistent with the provisions of this section,apply in relation to a legal representative. (6) The liability of a representative under thissection shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to theextent to which the estate is capable of meeting theliability.” 7.This Court is of the firm opinion that the proceedings underthe liability created against the legal representatives of thedeceased assessee can be initiated against the petitioner but onlyafter compliance of mandatory provisions under Section 148A (b)of the Act of 1961. It is writ large on the record and the replythat the provision of Section 148A(b) of the Act of 1961 has notbeen complied against the legal representatives of the deceasedSmt. Sneh Lata Bhandari. 8.In limited nature of adjudication, the impugned notice dated21.04.2023 (Annexure-7) under Section 148A of the Act of 1961and the order dated 21.04.2023 (Annexure-8) passed underSection 148A(d) of the Act of 1961 are hereby quashed and setaside. 9.However, the respondents shall be free to reinitiate theproceedings against the legal representatives of the deceasedSmt. Sheh Lata Bhandari, while strictly complying with theprovisions of the Section 148A(b) and 159 of the Act of 1961. 10.Both the parties shall be free to proceed strictly inaccordance with law. 11.Since, the liberty has been given to the respondent-Department to reinitiate the proceedings under Section 148A(b)and Section 159 of the Act of 1961, the limitation period betweenthe filing of the writ petition and till its disposal shall be excludedfor the purpose of computation of limitation period for initiatingsuch proceedings. 12.The writ petition stands disposed of accordingly. (MUNNURI LAXMAN),J (DR.PUSHPENDRA SINGH BHATI),J 292-Ramesh/BhumikaP/-