Mr. Dharan v. J U D G M E N T

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 10163 OF 2022 Dhirendra Bhupendra Sanghvi,](legal heir of Late Smt. Ushaben ]Bhupendra Sanghvi having PAN] ) an individual, aged]49 years, residing at A-25 Sahaj,]Amba Township Sector 1, Behind]Simandhar City, Near Trimandir,]Adalaj, Gandhinagar – 382421]… PetitionerV/s.1. Assistant Commissioner of ]Income Tax Cirlce – 27(3),]Mumbai, 423, Tower No. 6,]Vashi Railway Station]Commercial Complex Vashi,]Navi Mumbai – 400703]2. Principal Commissioner of ]Income-tax 27, Mumbai, Tower]No. 6, Vashi Railway Station]Commercial Complex, Vashi,]Navi Mumbai – 400703]3. National Faceless Assessment] Centre, 2[nd] Floor, E-Ramp,]Jawaharlal Nehru Stadium, Delhi]- 110003.] 4. Union of India, Through TheSecretary, Department OfRevenue, Ministry of Finance,Government of India, NorthBlock, New Delhi – 110 001. ]]]] ] … Respondents … Mr. Dharan V. Gandhi for the Petitioner. Mr. Devvrat Singh for the Respondents. … CORAM: DHIRAJ SINGH THAKUR ANDKAMAL KHATA, JJ. PRONOUNCED ON: 27TH JUNE, 2023. J U D G M E N T [PER: KAMAL KHATA, J.] 1At the request of the parties, this Petition is taken up forfinal disposal at the admission stage. 2Being aggrieved by the notice dated 19[th] March 2022 undersection (u/s) 148A(b) of the Income Tax Act, 1961 (‘Act’) theorder dated 31[st] March 2022 u/s 148A(d) and the notice datedwp.10163.22wadhwa 31[st] March 2022 issued u/s 148 all in the name of Late Smt. UshaB. Sanghvi (‘the deceased assessee’) and the approval granted on30[th] March 2022 by the Respondent No.2 to Respondent No.1 tore-open the assessment of the deceased, the Petitioner being thelegal heir has filed the present Petition under Article 226 of theConstitution in the circumstances mentioned hereunder: FACTS: 3The Petitioner is the legal heir of the deceased assessee whoexpired on 4[th] December 2019 at Gandhinagar. It is stated that thedeceased assessee had filed her return of income u/s 139(1) of theAct on 5[th] June 2018 declaring her total income of 1,94,28,890/-₹earned from capital gains and income from other sources as thedeceased was an investor in shares. 4It is stated that the deceased and her family had applied forchange of address in PAN as well as transfer of jurisdiction onaccount of shift in residence from Mumbai to Gandhinagar by herletter dated 9[th] January 2019 addressed to (i) Asst Commissionerof Income Tax Circle – 27(3) Mumbai (Respondent No.1), (ii)Additional/Joint Commissioner of Income Tax, Circle – 27(3), (iii)Principal Commissioner of Income-tax 27 (Respondent No.2), (iv)Commissioner of Income-Tax, Gandhinagar Circle and (v) Deputywp.10163.22wadhwa Commissioner of Income-Tax Gandhinagar Circle. It is stated thatwhereas the file of the deceased was not transferred, files of otherfamily members were transferred to Gandhinagar for the reasonsbest known to the Respondents. 5Upon death of the deceased, Petitioner’s request for beingregistered as the legal heir dated 11[th] April 2020 sent along withcopy of (i) the death certificate, (ii) the Will, and (iii) PAN Cardwas approved on 13[th] April 2020. On 20[th] July 2020, as the legalheir of the deceased, the Petitioner, filed the return of income ofthe deceased assessee for AY 2020-21. On 4[th] February 2021 thereturn of income was processed u/s 143(1) of the Act with ‘nodemand’. 6Since the PAN of the deceased was not cancelled, emailsdated 13[th] December and 15[th] December 2021 were sent to theRespondent once again and a grievance was also filed on the portalon 15[th] December 2021 intimating about the death of thedeceased. On 29[th] January 2022, the Respondents reverted on theportal seeking (i) indemnity bond (ii) original pan card to bedeleted (iii) legal heir documents and other relevant documents.Thus, the Respondents were aware of the death of the assesseeLate Smt. Usha B Sanghvi.wp.10163.22wadhwa 6Since the PAN of the deceased was not cancelled, emailsdated 13[th] December and 15[th] December 2021 were sent to theRespondent once again and a grievance was also filed on the portalon 15[th] December 2021 intimating about the death of thedeceased. On 29[th] January 2022, the Respondents reverted on theportal seeking (i) indemnity bond (ii) original pan card to bedeleted (iii) legal heir documents and other relevant documents.Thus, the Respondents were aware of the death of the assesseeLate Smt. Usha B Sanghvi.wp.10163.22wadhwa 7The learned counsel for the Petitioner submitted that inspiteof being aware, the Respondent No.1 on 19[th] March 2022 issuednotice under section 148A(b) of the Act in the name of thedeceased. He pointed out that though the notice was dated 19[th]March 2022 it could be evinced that it was signed on 26[th] March2022 and the deceased assessee was asked to reply by 28[th] March2022; consequently, less than seven days’ time was given incontravention to the provisions of section 148A of the Act. Hesubmitted that the Petitioner filed a reply on 27[th] March 2022giving all reasons and details to substantiate that there was nocase to issue notice. On 31[st] March 2022 the Respondent No. 1passed an order disposing off the objections u/s 148A(d) of the Actwith the prior approval of Respondent No. 2 taken on 30[th] March2022. On the same day a notice u/s 148 was issued in the name ofthe deceased assessee requiring her to file return of income within30 days. On 8[th] April 2022 the Petitioner as the legal heir, filed thereturn of income under protest and also sought copy of thereasons recorded for reopening the assessment. On 28[th] April2022 the Respondent No.1 reverted reiterating the contents of thenotice to which the Petitioner filed detailed objection on 29[th] April2022. The learned counsel submitted that apprehending hugeadditions and consequently demands the present Petition wasfiled.wp.10163.22wadhwa 8Mr. Singh the learned counsel for the Respondents inresponse submitted that an alternate remedy was available beforethe Assessing Officer (AO) to the Petitioner as the AssessmentOrder has not been passed. He submitted that the case has beenreopened after following the due process of law. He submitted thatthe Petitioner has not challenged the intimation order u/s 143(1)in the name of the deceased assessee by the CPC, ITD. Hesubmitted that the Petitioner had failed to file the indemnity bondas required to register himself as the Legal Heir. He furthersubmitted that having accepted the Intimation order u/s143(1)passed by the CPC the Petitioner cannot complain about thereassessment proceedings in the name of the deceased. In supportof his contention he relied upon the judgment of the Gujarat HighCourt in the case of Chandreshbhai Jayantibhai Patel v IncomeTax Officer[1]. He however, fairly pointed out the averment inparagraph 20 of the reply which states as under: “20. Thus, it is respectfully and humbly stated that theAO was aware that the assessee Smt. Usha BhupendraSanghvi had passed away. However, since the ITBASystem also is undergoing a change and is beingupdated, with new functionalities and modalities beingintroduced for the convenience of the assessee as wellas the Department and the fact that the Legal Heiralso could not upload and update the data in thesystem, the notices had been issued in the name of theassessee Late Smt. Usha Bhupendra Sanghvi.Wherever possible, the AO had tried to mention it inthe body of the order and notices that the proceedingsAO was aware that the assessee Smt. Usha BhupendraSanghvi had passed away. However, since the ITBASystem also is undergoing a change and is beingupdated, with new functionalities and modalities beingintroduced for the convenience of the assessee as wellas the Department and the fact that the Legal Heiralso could not upload and update the data in thesystem, the notices had been issued in the name of theassessee Late Smt. Usha Bhupendra Sanghvi.Wherever possible, the AO had tried to mention it inthe body of the order and notices that the proceedings 1(2019) 413 ITR 276wp.10163.22wadhwawp.10163.22wadhwa are in the name of the Legal Heir but where theproceedings are system generated, then they areassociated and linked to a particular PAN and thename and details associated to than PAN and nochanges are possible.” He therefore submitted that the Petitioner should avail hisremedy before the AO. Conclusion: 9We have heard both counsel and perused the papers andproceedings. 10The facts are not in dispute. The impugned notice forreopening the assessment was issued on a dead person. There areseveral judgments of different High Courts holding that the noticeissued on a dead person or reopening of assessment of a deadperson is null and void in law and the requirement of issuing anotice to a correct person is not merely a procedural requirementbut a condition precedent for a notice to be valid in law. Areference in this respect can be made to a decision of this court inSumit Balkrishna Gupta vs Assistant Commissioner of IncomeTax, Circle 16(2), Mumbai[2]. In the case of Principal Commissionerof Income Tax, New Delhi vs Maruti Suzuki India Ltd.[3] the ApexCourt has held that the notice issued and the order passed in the 2[2019] 103 taxmann.com 188 (Bombay) 3[2019] 107 taxmann.com 375(SC)wp.10163.22wadhwawp.10163.22wadhwa name of an old entity is bad in law and that such error was notcurable u/s 292B of the Act as the same constitutes a substantiveillegality and not a mere procedural violation. 11This Court in the case of CLSA India Private Limited vs TheDeputy Commissioner of Income Tax, 4(1)(1) & Ors. in WritPetition No. 2462 of 2022 whilst allowing the Petition has heldthat the stand of the revenue that the reassessment was justifiedin view of the fact that the PAN in the name of the non-existententity had remained active does not create an exception in favourof the revenue to dilute in any manner the principles enunciatedby the Apex Court in Saraswati Industrial Syndicate Ltd. v/s CIT[4]and in the case of PCIT New Delhi vs. Maruti Suzuki India Ltd.(supra). 12Keeping in mind, the averments in paragraph 20 of thereply, extracted hereinabove, this Court is of the view that therespondent no.1 would not have been wrong, keeping the settledlaw in mind, in abstaining from issuing a notice on the deceasedassessee. The respondent no.2 would also not have been wrong innot granting the sanction to the respondent no.1 for issuance of anotice on the deceased assessee, since the department was aware 4186 ITR 278 (SC)wp.10163.22wadhwawp.10163.22wadhwa 12Keeping in mind, the averments in paragraph 20 of thereply, extracted hereinabove, this Court is of the view that therespondent no.1 would not have been wrong, keeping the settledlaw in mind, in abstaining from issuing a notice on the deceasedassessee. The respondent no.2 would also not have been wrong innot granting the sanction to the respondent no.1 for issuance of anotice on the deceased assessee, since the department was aware 4186 ITR 278 (SC)wp.10163.22wadhwawp.10163.22wadhwa of the demise of the assessee and since the ITBA system isundergoing a change and being updated with new functionalitiesand modalities. In our view, if the concerned officers follow thesettled law and abstain from issuing notices which are null andvoid, would not only help the citizenry but also the courts in thecountry who are already overburdened. In fact, it would be intune with the Finance Act 2021 which aims to achieve theultimate object of simplifying the tax administration, easecompliance and reduce litigation. 13For the reasons stated above, this Court holds that the noticeand all consequential proceedings in the name of a deceasedassessee are null and void and consequently, the impugned noticedated 31[st] March 2022 u/s 148 of the Act, the Order dated 31[st]March 2022 u/s 148A(d) of the Act and Notice dated 19[th] March2022 u/s 148A(b) of the Act are quashed and set aside and allactions in furtherance thereto are prohibited. 14This Petition is allowed with no order as to costs. (KAMAL KHATA, J.) (DHIRAJ SINGH THAKUR, J.)