TMI Blog2022 (5) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... isputably, the assessment proceedings for escaped income were initiated by issue of notice under Section 148 of the Act and therefore the AO was vested with jurisdiction over the case. However, issuing notice upon the deceased assessee is as good as no valid notice in eye of law resulting in irregularity, which is not curable. It would be a nullity, as it hits upon the inherent jurisdiction of AO. On a bare reading of the provision, it is evident that issuance of valid notice confers power upon the AO to assume jurisdiction for initiation of proceedings for assessment of escapement of income. It is a cardinal proposition in law that not issuing notice at all or issuing that beyond statutory period or issue of an invalid notice under Section 148 does affect the jurisdiction of AO and would make the assessment/reassessment null and void because the notice under this section is not a mere procedural requirement but a condition precedent to assume jurisdiction and to make a valid assessment/reassessment. Absence of such a notice would make the assessment invalid and without jurisdiction in view of the decisions of Y Narayana Chetty[ 1958 (10) TMI 10 - SUPREME COURT] , THAYABALLI MULL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2021 thereby seeking reopening of the assessment for the year under consideration. 2.2 The main reason cited by the Assessing Officer was based on information received whereby prima facie, the Assessing Officer had formed opinion that the deceased - Jagannath Rampal Kabra had claimed bogus accommodation entry for an amount of Rs.50,00,000/- and there was escapement of income for the assessment year under consideration. The writ applicant submitted objections on 22.11.2021 responding to the reasons served upon the deceased -assessee. The main objection raised by the writ applicant was that the proceedings are initiated against the deceased-assessee and therefore, the Notice is void in the eye of law and thereby, requested to drop the proceedings. 2.3 The attention of the Assessing Officer was also drawn on the merits of the case. However, without considering the preliminary objection of the writ applicant about Notice being void as served upon the deceased person, the Assessing Officer on the basis of materials on record, proceeded to disposed of all the objections in the name of deceased-assessee vide order dated 18.12.2021. In such circumstances, the writ applicant is here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act; Section 2(29) legal representative has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908; 159. Legal representatives. - (1) Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased. (2) For the purpose of making an assessment (including an assessment, reassessment or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of subsection (1).- (a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of this Act shall apply accordingly. (3) The legal representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; (b) any proceeding which could have been taken against the deceased if he had survived, may be taken against the legal representative; and (c) all the provisions of the Act shall apply accordingly. 14. Thus, clause (a) of sub-section (2) of section 159 of the Act provides for the eventuality where a proceeding has already been initiated against the deceased before his death, in which case such proceeding shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased. In the present case, the proceeding under section 147 of the Act had not been initiated against the deceased before his death, and hence, clause (a) would not be applicable in the facts of this case. 15. Clause (b) of sub-section (2) of section 159 of the Act provides that any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative. The present case would, therefore, fall with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and asked him to drop the proceedings, it cannot, by any stretch of imagination, be construed as the petitioner having participated in the proceedings. 17. Insofar as reliance placed upon section 292B of the Act is concerned, the said section, inter alia, provides that no notice issued in pursuance of any of the provisions of the Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice if such notice, summons is in substance and effect in conformity with or according to the intent and purpose of the Act. 18. The question that therefore arises for consideration is whether the notice under section 148 of the Act issued against the deceased assessee can be said to be in conformity with or according to the intent and purposes of the Act. In this regard, it may be noted that a notice under section 148 of the Act is a jurisdictional notice, and existence of a valid notice under section 148 is a condition precedent for exercise of jurisdiction by the Assessing Officer to assess or reassess under section 147 of the Act. The want of a valid notice affects the jurisdiction of the Assessing Officer to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hatt, the learned Senior Counsel, has heavily placed reliance upon Section 292BB of the Act and has contended in the facts of the case, the writ applicant being the legal representative of the deceased original assessee by submitting objections on merits, has participated in the proceedings and in view of the Section 292BB of the Act, the assessee cannot raise the objection that the impugned Notice is without jurisdiction. In our view, the aforesaid issue is squarely covered by the decision of the Supreme Court. 7. The Supreme Court in the case of Commissioner of Income Tax vs. Laxman Das Khandelwal , reported in [2019] 417 ITR 325(SC), had an occassion to consider the effect of Section 292BB of the Act in light of the similar set of facts where the Assessing Officer sought assessment by issuing Notice under Section 143(3) read with Section 153(D) of the Act. The Revenue had preferred the appeal challenging the judgment and order passed by the High Court on the ground that the expression so far as may be, apply indicates that it is not expected to follow the provisions of Section 142(2)(3) of Section 143 strictly for the purpose of block assessments. Further, relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. At the outset we may observe that as per scheme of the Act the AO gets jurisdiction under the Act for assessment upon suo moto filing of return by the assessee or by issue of notice requiring him to file the return. In the present case, there is no scope/occasion for filing a voluntary return for escapement of income and the only provision under which return can be filed is on issue of a notice under Section 148. Indisputably, the assessment proceedings for escaped income were initiated by issue of notice under Section 148 of the Act and therefore the AO was vested with jurisdiction over the case. However, issuing notice upon the deceased assessee is as good as no valid notice in eye of law resulting in irregularity, which is not curable. It would be a nullity, as it hits upon the inherent jurisdiction of AO. On a bare reading of the provision, it is evident that issuance of valid notice confers power upon the AO to assume jurisdiction for initiation of proceedings for assessment of escapement of income. It is a cardinal proposition in law that not issuing notice at all or issuing that beyond statutory period or issue of an invalid notice under Section 148 does affect the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
