Sumit Balkrishna Gupta v. Asstt. Commissioner Of Income Tax, Circle 16(2), Mumbai

(Private Secretary) IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. WRIT PETITION NO. 3563 OF 2018 Sumit Balkrishna Gupta..Petitioner Versus Asstt. Commissioner of Income Tax, Circle 16(2), Mumbai..Respondents& Ors. ................... Mr. Satish Mody a/w Ms. Aasifa Khan for the Petitioner Mr. Satish Mody a/w Ms. Aasifa Khan for the Petitioner Mr. Suresh Kumar for the RespondentsMr. Suresh Kumar for the Respondents ................... CORAM : AKIL KURESHI & M.S. SANKLECHA, JJ. DATE : FEBRUARY 15, 2019. P.C.: 1.This petition under Article 226 of the Constitution of India seeks to set aside :- a) a notice dated 31.7.2017 issued under Section143(2) of the Income Tax Act, 1961 ("the Act" for short)relating to assessment year 2016-17 and (b) the order dated 19.11.2018 passed by the AssessingOfÏcer - respondent No. 1 rejecting the petitioner'spreliminary objection that the impugned notice dated31.7.2017 be withdrawn as it is null and void. This on the ground that the impugned notice dated 31.7.2017 has been issued in the name of the deceased assessee and not on his legal heir i.e the petitioner herein. 2.This petition relates to Assessment Year 2016-17. 3.Briefly stated, the facts giving rise to the petition are asunder: 2.1 The petitioner is the son and the legal heir of theassessee Mr. Balkrishna Gupta who died on 9.6.2014. For thesubject assessment year 2016-17, the petitioner being thelegal heir of the deceased assessee Balkrishna Gupta filed areturn of income on 17.10.2016 declaring total income of Rs.14.67 lacs. 2.2 On 30.1.2017, the petitioner uploaded a request to beregistered as the legal heir of deceased Balkrishna Gupta.This request of the petitioner was accepted by therespondent - Revenue as the request was successfullyuploaded on the Income Tax Portal. 2.3 On 31.7.2017, the impugned notice was issued byrespondent No. 1 - Assessing OfÏcer in the name of deceased Balkrishna Gupta. 2.4 The petitioner, by letter dated 16.11.2018, called uponthe Assessing OfÏcer to withdraw the impugned noticeissued under Section 143(2) of the Act as it has been issuedin the name of the dead person. By the aforesaidcommunication, respondent No. 1 was informed that theRevenue was aware about the death of original assesseeBalkrishna Gupta as is evident from the assessment orderspassed for the assessment year 2014-15 which wascompleted on 30.12.2016. Thus, the impugned notice is nulland void. Therefore, no further proceeding be taken on thebasis of the above notice. Besides the petitioner alsoregistered its objection to the notice in terms of Section292BB of the Act. 2.5 However, respondent No. 1 by the impugned orderdated 19.11.2018 rejected the petitioner's objection to theimpugned notice having been issued in the name of the deadperson on the following grounds:- (i). The nature of the defect viz. issue of notice incase of wrong person stands cured by Sectioncase of wrong person stands cured by Section 292B of the Act; (ii) That the legal heir of the deceased was notregistered with the database of the Income TaxDepartment. Thus, no fault in having issued thenotice in the name of the deceased assessee; andregistered with the database of the Income TaxDepartment. Thus, no fault in having issued thenotice in the name of the deceased assessee; and (iii) The return for the assessment year 2016-17 wasfiled in the name of the deceased assessee.filed in the name of the deceased assessee. 4.It is in the backdrop of the above facts, the impugnednotice dated 31.7.2017 and order dated 19.11.2018 havebeen challenged in this petition. The principal ground ofchallenge is that the impugned notice issued in the name ofthe dead person is nonest in law and does not bestowjurisdiction upon the Assessing OfÏcer to carry out scrutinyassessment under Section 143(3) of the Act. (iii) The return for the assessment year 2016-17 wasfiled in the name of the deceased assessee.filed in the name of the deceased assessee. 4.It is in the backdrop of the above facts, the impugnednotice dated 31.7.2017 and order dated 19.11.2018 havebeen challenged in this petition. The principal ground ofchallenge is that the impugned notice issued in the name ofthe dead person is nonest in law and does not bestowjurisdiction upon the Assessing OfÏcer to carry out scrutinyassessment under Section 143(3) of the Act. 5.Mr. Mody, learned counsel in support of the petitionsubmits as under:-submits as under:- (a) The impugned notice dated 31.7.2017 underSection 143(2) of the Act issued in the name of aSection 143(2) of the Act issued in the name of a dead person, is no notice in law. Thus, theAssessing OfÏcer did not acquire jurisdiction toscrutinize the return of income under Section143(3) of the Act; (b) The reason for not issuing the impugned notice inthe name of the petitioner being non-registrationas legal heir is not correct as the petitioner hadalso registered himself with the Income TaxAuthorities on its portal as the legal heir of thedeceased assessee on 30.1.2017 i.e much beforethe name of the petitioner being non-registrationas legal heir is not correct as the petitioner hadalso registered himself with the Income TaxAuthorities on its portal as the legal heir of thedeceased assessee on 30.1.2017 i.e much before the issuance of the impugned notice. (c) Moreover on facts, the respondents were aware ofthe demise of the original assessee in as much asthe earlier assessment order for assessment year2014-15 was issued in the name of the petitioneras legal representative of the deceased assessee;the demise of the original assessee in as much asthe earlier assessment order for assessment year2014-15 was issued in the name of the petitioneras legal representative of the deceased assessee; (d) Section 292B will not come into play in casewhere the notice had been issued in the name ofthe dead person and in support, reliance wasplaced upon a decisions of Gujrat High Court inthe case of Vikram Singh Vs. Union of India &where the notice had been issued in the name ofthe dead person and in support, reliance wasplaced upon a decisions of Gujrat High Court inthe case of Vikram Singh Vs. Union of India & Ors.[1], the Delhi High Court in the case ofRajendra Kumar Sehgal Vs. I.T.O., New Delhi[2]rendered on 19.11.2018 and the decision ofMadras High Court in the case of AlameluVeerappan Vs. I.T.O., Chennai[3]rendered on7.6.2018; and (e) The filing of the return of income in the name ofthe dead assessee was a mistake on the part ofthe petitioner. However, mistake on the part ofthe petitioner when all facts are known to therespondents will not make the notice valid so asto give jurisdiction. 6.Mr. Suresh Kumar, learned counsel for the Revenuesubmits as under: (a) that this Court should not exercise its extra ordinary jurisdiction in view of the fact that the petitionerhad filed return of income for the assessment year2016-17 on 17.10.2016 in the name of thedeceased assessee. Thus, the notice issued in the 1[2018] 401 ITR 307 (Gujrat)2WP(C) NO. 11255/2017, CM No. 46017/20172WP(C) NO. 11255/2017, CM No. 46017/2017 3WP No. 30060 of 2017 & WPM NO. 32631 of 2017 name of the deceased assessee; and (b) In any case, Section 292B of the Act would cure adefect of the notice being issued in wrong nameunder Section 143(2) of the Act. defect of the notice being issued in wrong nameunder Section 143(2) of the Act. Thus, this Court should not interfere and the petitionershould be directed to cooperate in the scrutiny assessmentunder Section 143(3) of the Act. (a) that this Court should not exercise its extra ordinary jurisdiction in view of the fact that the petitionerhad filed return of income for the assessment year2016-17 on 17.10.2016 in the name of thedeceased assessee. Thus, the notice issued in the 1[2018] 401 ITR 307 (Gujrat)2WP(C) NO. 11255/2017, CM No. 46017/20172WP(C) NO. 11255/2017, CM No. 46017/2017 3WP No. 30060 of 2017 & WPM NO. 32631 of 2017 name of the deceased assessee; and (b) In any case, Section 292B of the Act would cure adefect of the notice being issued in wrong nameunder Section 143(2) of the Act. defect of the notice being issued in wrong nameunder Section 143(2) of the Act. Thus, this Court should not interfere and the petitionershould be directed to cooperate in the scrutiny assessmentunder Section 143(3) of the Act. 7.We have considered rival submissions. It is a fact thatthe petitioner had filed return for the assessment year 2016-17 in the name of the deceased assessee and not in hisname as a legal heir of the deceased assessee. This returnwas filed on 17.10.2016. However, we note that the returnwas signed by the petitioner as a Legal Heir. The name ofthe deceased assessee in the title of the return of incomewas an inadvertent error. In any event, on 30.1.2017, thepetitioner got himself registered as legal heir / representativeof the deceased assessee in the software system maintainedby the Authority. Thus, the Department was well aware ofthe fact on the date that the impugned notice dated31.7.2017 under Section 143(2) was issued, the petitioner is the legal representative of the deceased assessee.Moreover, from the record it has been shown to us that forthe earlier assessment years 2014-15, the Revenue haspassed an assessment order in the name of the petitioner aslegal Representative of the deceased assessee BalkrishnaGupta. Therefore, in the above facts, there was nojustification for the Assessing OfÏcer to have issued theimpugned notice in the name of the dead person. This wouldmean absence of a notice under Section 143(2) of the Act. Itis a settled position that the proceedings for scrutinyassessment under Section 143(3) of the Act can be done ifnotice is issued under Section 143(2) of the Act as held bythe Supreme Court in the case of ACIT V/s. HotelBluemoon[4]. Thus, a notice in the name of wrong personwould be no notice and the Assessing OfÏcer would notacquire jurisdiction to proceed under Section 143(3) of theAct. 8.In fact, the Gujrat, Delhi and Madras High Court in thecases of Vikram Singh (supra), Rajendra Kumar Sehgal(supra) and Alamelu Veerappan (supra) respectively have4(2010) 321 ITR 362 (SC) held that a notice issued in the name of the deceasedassessee is null and void. We note the fact that the abovedecisions were rendered in the context of notices issued forreopening of assessment under Section 148 of the Act,however, the ratio of the aforesaid decisions would equallyapply to a notice issued under Section 143(2) of the Act.This is so as the issuing of notice under Section 143(2) ofthe Act which alone gives jurisdiction to the Assessing OfÏcerto proceed with scrutiny assessment under Section 143(3) ofthe Act. The contention of the Revenue that in any view ofthe matter, Section 292B of the Act would apply to the factsof this case is not acceptable. A notice issued under Section143(2) of the Act which gives jurisdiction to complete theassessment having been issued in the name of the deadperson is noneset in law as it is not the saved by Section292B of the Act. The issue of a notice under Section 143(2) ofthe Act so as to take up the assessment for scrutiny is not aprocedural but a substantive provision. Therefore, where anotice is issued in the name of a wrong person, there wouldbe no issuing of notice as required under the Act. In suchcases, as in the case of Section 148 of the Act, the issuing of a notice in the name of the wrong person is not a proceduraland / or clerical error. Therefore, being a substantive defect,the notice cannot be saved by Section 292B of the Act. 9.In the above view, the impugned notice dated31.7.2017 and the impugned order dated 19.11.2018 arequashed and set aside. Petition allowed. [ M.S. SANKLECHA, J. ] [ AKIL KURESHI, J ]