CHANDRESHBHAI JAYANTIBHAI PATEL VS. ITO 413 ITR 276 (GUJ)

Reassessment Notice issued in name of dead person is not valid if objected by legal representative

Facts

The Petitioner is the son of the late Mr. Jayantibhai Harilal Patel, who passed away on 24th June, 2015.  The AO issued notice u/s. 148 of the Act dated 28th March, 2018 in the name of the deceased for reopening the assessment for the AY 2011-12.  

In response, the Petitioner vide letter dated 27th April, 2018 objected to the initiation of reassessment proceedings and informed that his father had passed away on 24th June, 2015. The petitioner maintained the objections in the subsequent proceedings.

Vide order dated 14th August, 2018, the AO rejected the objections and held that in the absence of knowledge about the death of the petitioner’s father, it cannot be said that the notice of reassessment is bad in law.  The AO held that the reassessment proceedings may be carried out in the name of the legal heirs of the late father of the petitioner.  

Being aggrieved, the petitioner filed a writ petition before the High Court and challenged the order.

Decision

The Gujarat High Court allowed the writ petition and held as under:

• A notice u/s. 148 is a jurisdictional notice and existence of a valid notice u/s. 148 is a condition precedent for exercise of jurisdiction by the AO to assess or reassess u/s. 147.
• Where the legal representative does not waive his right to a notice u/s. 148, it cannot be said that the notice issued against the dead person is in conformity with or according to the intent and purpose of the Act. Consequently, the provisions of section 292B of the Act would not be attracted.
• The HC observed that the case fell within the ambit of section 159(2)(b) of the Act. The notice u/s. 148, had been issued to a dead person.  Upon receipt of such notice, the legal representative had raised an objection to the validity of such notice and had not complied with it. The legal representative not having waived the requirement of notice u/s. 148 and not having submitted to the jurisdiction of the AO pursuant to the notice, the provisions of section 292B of the Act would not be attracted and hence, the notice u/s. 148 of the Act had to be treated as invalid.