I-T - Revenue officials cannot enforce reopening notice issued in name of deceased taxpayer, by taking excuse of their ignorance about death of taxpayer: HC
By TIOL News Service
CHENNAI, JUNE 19, 2018: THE ISSUE BEFORE THE HIGH COURT IS - Whether I-T Department can enforce reopening notice issued in the name of a deceased taxpayer, by pleading ignorance about the death of taxpayer. NO IS THE VERDICT.
Facts of the case:
The present assessee is the wife of deceased Mr.S.Veerappan. During the year under consideration, she received a notice addressed to her late husband, stating that certain income of said Mr.S.Veerappan had escaped assessment for A.Y 2010-11 and accordingly, the ITO had proposed to re-assess the income for said assessment year. The assessee therefore sent a reply pointing out that her husband had died and enclosed a copy of the death certificate to establish the said fact. She however stated that she was receiving frequent telephone calls from the Department calling upon her to appear before the officer in respect of the reopening notice issued in the name of her late husband. Therefore, left with no option, the assessee visited the office of ITO, who was then informed that she should submit all the documents pertaining to her husband's assessment including the details of bank account statements for the F.Y 2009-10. The assessee, in turn, informed the officer that she did not have any of the documents, which were sought for. Finally, the assessee had approached this Court praying for issuance of a Writ of Certiorarified Mandamus to quash the reopening notice issued in the name of her deceased husband and to forbear the ITO from conducting any proceedings for reassessment as set out in the said notice.
High Court held that,
++ the issue, which falls for consideration, is as to whether the reopening notice u/s 148 issued in the name of dead person i.e., Mr.S.Veerappan is enforceable in law and the subsidiary issue being as to whether the assessee, being the wife of the said Mr.S.Veerappan, can be compelled to participate in the proceedings and respond to such notice. The fact that the said Mr.S.Veerappan is dead is not in dispute. If this fact is not disputed, then the notice issued in the name of the dead person is unenforceable in the eye of law. The Department seeks to justify their stand by contending that they were not intimated about the death of assessee, that the legal heirs did not take any steps to cancel the PAN registration in the name of assessee and that therefore, the Department was justified in directing the assessee to cooperate in the proceedings pursuant to the notice. The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the Revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. The answer to the question should be definitely against the Revenue;
++ it is admitted that the limitation period for issuance of notice for reopening has expired on Mar 31, 2017. On being intimated about the death, the Department sent the notice to the assessee-his spouse to participate in the proceedings. This notice was well beyond the period of limitation. If we approach the problem sans complicated facts, a notice issued beyond the period of limitation is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the Department was not intimated about the death of assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of assessee or take steps to cancel the PAN registration. In such circumstances, the question would be as to whether Section 159 of the Act would get attracted. The answer to this question would be in the negative, as the proceedings u/s 159 can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of Section 159 have no application;
++ the Revenue then seeks to bring their case u/s 292 to state that the defect is a curable defect and on that ground, the reopening notice cannot be declared as invalid. The language employed in Section 292 is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act. This court therefore holds that the reopening notice is wholly without jurisdiction and cannot be enforced against the assessee.
(See 2018-TIOL-1145-HC-MAD-IT)
