Surajiben Bachuji Thakor Since Decd. Through His Lhlaxmanji Bachuji Thakor v. Income Tax Officer, Ward 2(1)(1

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 10186 of 2022 ========================================================== SURAJIBEN BACHUJI THAKOR SINCE DECD. THROUGH HIS LHLAXMANJI BACHUJI THAKOR Versus INCOME TAX OFFICER, WARD 2(1)(1) ========================================================== Appearance:MR ASHUTOSH S DAVE(8865) for the Petitioner(s) No. 1MR JYOTINDRASINH J VALA(10975) for the Petitioner(s) No. 1M R BHATT & CO.(5953) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA andHONOURABLE MR. JUSTICE BHARGAV D. KARIADate : 23/08/2022ORAL ORDER (PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) In the facts and circumstances of the case and having regard to thecompass of the controversy involved in the petition, this Special CivilApplication was taken up for final consideration today. 1.1Rule, returnable forthwith. Learned advocate Mr. Karan Sanghanifor M. R. Bhatt & Co. waives service of Rule on behalf of the respondent. 2.Heard learned advocate Mr. Ashutosh Dave for the petitioner andlearned senior advocate Mr. M. R. Bhatt for M. R. Bhatt & Co. for therespondent. 3.Filed under Article 226 of the Constitution, the challenge in thispetition is directed against assessment order dated 23.3.2022 as well asthe demand notice of even date against one Surajiben Bachuji Thakor.Also under challenge are notices issued under sections 271 (1)(a), 271 (1)(b) and 271F of the Income Tax Act, 1961. It is prayed that all theproceedings initiated as above are liable to be declared as void ab intio and non-est. 3.1It appears that on 9.3.2016, a sale deed was executed by the abovenamed assessee Surajiben Bachuji Thakor alongwith other co-owners inrespect of the land bearing Survey Nos. 454, 455 and 456 at Gota,Ahmedabad. The said Surajiben Bachuji Thakor against whom demandnotice and penalty notice have been issued, passed away on 20.08.2016. 3.2The factum of death of said Surajiben Bachuji Thakor is evidencedby death certificate produced on record of the petition (copy at page 61Annexure-D). She died on 20.08.2016. 4.As per the above assessment order passed under section 147 of theAct for the Assessment Year 2016-2017, the tax demand was raised onthe premise that the entire amount of sale consideration was unaccountedin view of provisions of section 69 of the Income Tax Act. The abovenamed Surajiben Bachuji Thakor is presently represented by her legalheir Laxmanji Bachuji Thakor who was one of the co-owners of the landssold as above. 5.The only issue to be considered in the present petition is whetherthe Assessment proceedings are maintainable against the dead person.Similar question had come up for consideration before this court inHimadri Kandarp Mehta L/H of Late Kandarp Yashshvibhai Mehtavs. The Income Tax Officer being Special Civil Application No. 16323of 2019 decided on 1.8.2022. 5.1Extracting the relevant part of the decision in Himadri KandarpMehta (supra) which would apply and cover the present case, “5.The Division Bench of this Court in Urmilaben Anirudhhasinji Jadeja Vs. Income Tax Officer, Ward 7(1)(3)[(420) ITR 226], addressed the very issue. The Court consideredvarious decisions of the Supreme Court and the High Court,touching the aspects of the issue, held that there cannot be anyassessment against a dead person. In that case also, notice wasissued to the dead assessee under Section 148 of the Income TaxAct, 1961 (hereinafter referred to as the "Act"). 5.1While holding that the proceedings would be nullity againstthe dead assessee, the rider was provided that in cases where legalrepresentatives participate in the assessment or re-assessmentproceedings, the proceedings may be maintained and continued. Itwas at the same time held that mere intimation by the legalrepresentative to the assessing officer that the noticee is dead,would not amount to legal representation on participation in thatproceedings. 5.1While holding that the proceedings would be nullity againstthe dead assessee, the rider was provided that in cases where legalrepresentatives participate in the assessment or re-assessmentproceedings, the proceedings may be maintained and continued. Itwas at the same time held that mere intimation by the legalrepresentative to the assessing officer that the noticee is dead,would not amount to legal representation on participation in thatproceedings. 5.2In Urmilaben Anirudhhasinji Jadeja (supra), while therevenue raised various contentions seeking a proposition that theproceedings against the dead assessee would be maintained, theCourt negatived them all. 5.3One of the contention was based on Section 292B of the Act.The said provision contemplates that the notice shall be deemed tobe valid in certain circumstances. It mentions that where anassessee has appeared in any proceedings or cooperated in anyinquiry relating to assessment or re-assessment, it shall be deemedthat a notice required to be served under the Act has been dulyserved upon him. Such, it is provided, shall be precluded by takingany objection about the service of the service of the notice andmanner of the service. 5.4The Division Bench held that the said provision would notapply in cases where notices are gone to the dead assessee and theproceedings are started against a dead assessee. It was observedand held in paragraph 23 thus, "The purport of Section 292B of the Act is that in the eventof any mistake, defect or omission in the notice or otherproceedings, if the same is in conformity with or accordingto the intent and purpose of the Act, the notice cannot be termed as invalid. To put it in other words, the notice shouldbe in conformity with and in accordance with the intent andpurpose of the Act. In our opinion, a case in which notice isissued to a dead person could be termed as nullity. It issomething like a safeguard passing a decree against a deadperson which cannot be executed through the legalrepresentatives of the judgment-debtor." 5.4.1 The continuation of proceedings pursuant to notice underSection 148 of the Act was held to be without authority of law bythe Court stating thus - "...the notice under section 148 of the Act, which is ajurisdictional notice, has been issued to a dead person.Upon receipt of such notice, the legal representative hasraised an objection to the validity of such notice and has notcomplied with the same. The legal representative not havingwaived the requirement of notice under section 148 of theAct and not having submitted to the jurisdiction of theAssessing Officer pursuant to the impugned notice, theprovisions of section 292B of the Act would not be attractedand hence, the notice under section 148 of the Act has to betreated as invalid. In the absence of a valid notice, theAssessing Officer has no authority to assume the jurisdictionunder section 147 of the Act and, hence, continuation of theproceeding under section 147 of the Act pursuant to suchinvalid notice, is without authority of law. The impugnednotice as well as the proceedings taken pursuant thereto,therefore, cannot be sustained." 5.5 Thus, the law is well settled that unless the heirs and legalrepresentatives of the deceased assessee could be said to have beensubmitted to the jurisdiction of the assessing officer and haveparticipated in the assessment or re-assessment proceedings, noticeto the dead assessee and commencement of assessment or re-assessment proceedings against dead person is rendered null andvoid. 5.6The attempt on the part of the income tax authorities to startproceedings for assessment or re-assessment against the deadperson is viewed not merely as procedural irregularity but it isstated as jurisdictional defect. 5.7There cannot be an assessment against the dead person. Asnoticed above, the provisions of Section 292B of the Act are alsonot applicable and no assessment can be framed against a non-existing entity or a person who has died.” 5.6The attempt on the part of the income tax authorities to startproceedings for assessment or re-assessment against the deadperson is viewed not merely as procedural irregularity but it isstated as jurisdictional defect. 5.7There cannot be an assessment against the dead person. Asnoticed above, the provisions of Section 292B of the Act are alsonot applicable and no assessment can be framed against a non-existing entity or a person who has died.” 5.2In light of the above, reverting back to the facts of the present case,Surajiben Bachuji Thakor died on 20.08.2016. Notice under section 148of the Income Tax Act came to be issued on 31.3.2021 and theAssessment Order was passed under section 147 of the Act read withsection 144 of the Act on 23.3.2022. The total income of the saiddeceased assessee was determined to be Rs. 7,70,00,000/- and the taxdemand of Rs. 6,39,55,500/- was raised. 5.3Not only that the assessment order came to be passed after sixyears from the death of the assessee, noticeably it transpires from therecord that on 23[nd] March, 2022, the legal heir of the deceased SurajibenBachuji Thakor intimated the Income Tax authorities about the death ofthe assessee. On the very date, the order of Assessment came to bepassed. Request of the heir of the deceased assessee prayed as above,was rejected by the authority. In the meantime, the Assessment Orderwas passed. Be as it may. The fact which stands established is that theauthority concerned had the knowledge about the death of the assessee,yet it proceeded to pass the assessment order without paying heed to theintimation given by the heir as above. 6.Reverting back to the facts of the present case, Surajiben BachujiThakor died on 20.08.2016 in whose name, notice was issued by theincome tax authorities on 31.3.2021 under Section 148 of the Act seekingto reopen assessment in respect of Assessment Year 2016-2017. Thepetitioner herein who happens to be the legal representative intimated tothe income tax officer concerned that the noticee Surajiben Bachuji Thakor had died long back and that the notice was without jurisdiction.The Income Tax authorities did not pay heed to the said intimation. 6.1 The facts of the case did not offer any fact or circumstances tosuggest that the legal representative of the deceased assessee in anymanner submitted to the jurisdiction of the income tax authorities or inany way participated in the proceedings. On the contrary, communicationdated 23.3.2022 was sent to the income tax officer by the legalrepresentative that the noticee Surajiben Bachuji Thakor had died. 6.2 In view of the above, the present petition deserves to be allowed. Itis hereby allowed by holding that the impugned notice, which was againstthe dead assessee, could not have been sustained. 6.3Resultantly, the assessment order dated 23.3.2022 issued in thename of Surajiben Bachuji Thakor, as a dead person, by the income taxdepartment is held to be illegal. 7.Assessment order dated 23.3.2022 issued by the Income Taxauthorities is set aside. The Income Tax authorities shall not proceedagainst the said dead assessee. Rule is made absolute to the aforesaid extent. (N.V.ANJARIA, J) C.M. JOSHI (BHARGAV D. KARIA, J)