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TMI Blog2025 (5) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... se was subject to scrutiny assessment and assessment u/s 144 of the Act was finalized on 22.12.2019. The assessing officer stated that assessee was a doctor by profession and followed cash system of accounting. The assessee has declared income under the head salary, business or profession and income from other sources. The AO stated that assessee had deposited cash of Rs. 1,51,73,150/- in account no. 03880200000056 maintained with Byculla Branch of Bank of Baroda. The AO has also mentioned the month-wise amount deposited in the aforesaid bank account totaling to Rs. 1,51,73,150/-. The AO further stated that assessee had also deposited cash in another bank account no. 502000006669870 of HDFC Bank to the amount of Rs. 15,00,000/-. The AO further noticed that there was nil deposit in the month of November, February and March whereas in the month of May, July, September & October large amount was deposited in the bank account. He further stated that daily cash register in Form 3C reflecting daily cash receipts was also not filed. Therefore, the assessing officer has treated the cash deposit of Rs. 1,66,73,150/- as unexplained cash u/s 69A of the Act and added to the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 142(1) and further show-cause notices have been served to whom and the mode of service of notices is also not mentioned in the order. 6.3 The issue is no longer res integra in view of the binding decision of the Hon'ble Supreme Court in the case of Kanubhai Dhirubhai Patel Lr Of ... vs Income Tax Officer Ward 6(1)(1) vide order in C/SCA/1523/2022 dated 14th February, 2022, [2020] 114 taxmann.com 482 (SC) wherein SLP filed against the decision of the Hon'ble High Court of Gujarat holding that no valid notice can be issued on a dead persons was dismissed. The detailed judgment of the Hon'ble High Court is extracted as under: "2. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: "This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to: (a) quash and set aside the impugned notice dated 31.03.2021 at Annexure -'A' to this petition; (b) quash and set aside the subsequent notice dated 17.12.2021 at Annexure - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the Department. 5. Ms. Shah has specifically contended in the para 3.6 of the memo of the writ application as well as argued that the writ applicant upon receiving the impugned notices in the name of deceased has from first instance objected to the same and had requested the respondent to drop proceedings. The writ applicant has therefore, never participated in the proceedings in the present case. It is submitted that the writ applicant has not submitted to the jurisdiction of the respondent but has rather questioned the same vide reply submitted on 10.04.2021 and 15.12.2021. On the other hand no material has come on record to contradict the same. Thus, issue which falls for our consideration is that whether the impugned notice and the consequential proceedings initiated by the Assessing Officer against the deceased assessee is maintainable in the eye of law. 6. The aforesaid issue is no more res integra. Undisputedly, the original assessee had expired on 22.11.2020, the impugned notice under Section 148 of the Act came to be issued on 31.03.2021, which was addressed to the deceased assessee calling upon to file return of income for annual A.Y. 2015-16. Even thereafter, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid, inasmuch as it is a purely procedural lapse. 6.4 Reliance was placed upon the decision of the Delhi High Court in the case of Sky Light Hospitality LLP v. Assistant Commissioner of Income Tax, (2018) 405 ITR 296 (Delhi), wherein the court has held thus: "17. In the context of the present writ petition, the aforesaid ratio is a complete answer to the contention raised on validity of the notice under section 147/148 of the Act as it was addressed to the erstwhile company and not to the limited liability partnership. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated April 11, 2017. They had objected to the notice being issued in the name of the company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defect may render the order made irregular - depending upon the nature of the provision not complied with, but certainly not void or illegal. Following the said decisions, the court held that in the facts and circumstances of the case, the orders of assessment made by the Income Tax Officer without notice to all the legal representatives are not null and void in law, but are merely irregular/defective proceedings which can be set right by remitting the matters to the Income Tax Officer for making fresh assessments with notice to all legal representatives. Chandreshbhai Jayantibhai Patel vs The Income Tax Officer on 10 December, 2018. 6.7 Reliance was placed upon the decision of this court in the case of Commissioner of Income Tax v. Sumantbhai C. Munshaw, (1981) 128 ITR 142, wherein though the notice was issued to the deceased person, the proceeding was continued against the legal representative who participated in the proceeding and also filed return of income without raising any objection as to the validity of the assessment proceedings. The legal representative had, therefore, submitted to the jurisdiction of the Assessing Officer. The court held that if the legal representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Officer objecting to the notices issued under section 148 as well as under section 142(1) of the Act and drew his attention to the earlier letter dated 27.04.2018 informing him about the death of his father and requesting him to drop the proceedings. The attention of the Income Tax Officer was further invited to the provisions of section 159 of the Act, to submit that the proceedings are required to be initiated against a legal representative and not against the deceased and, therefore, the notices issued to the dead person are invalid. Reliance was placed upon the decision of this court in Jaydeep Kumar Dhirajlal Thakkar v. Income Tax Officer, (2018) 401 ITR 302 (Guj.) and Vipin Walia v. Income Tax Officer, (2016) 381 ITR 19 (Delhi). 9. Thereafter, by a notice dated 03.08.2018 issued under section 142(1) of the Act, the respondent called upon the petitioner as legal heir of deceased Shri Jayantilal Harilal Patel to furnish the documents mentioned therein. In the annexure thereto, the petitioner is called upon to show cause as to why penalty proceedings under section 217F of the Act should not be initiated in his case as he had not furnished return of income in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings initiated against the legal representative/legal heir are valid and legal. 12. In the backdrop of the aforesaid facts, it is an admitted position that the notice under section 148 of the Act was issued to a dead person. The petitioner being the heir and legal representative of the deceased, upon receipt of the notice, immediately raised objection against the validity of the impugned notice and did not submit to the jurisdiction of the Assessing Officer by filing a return of income, but kept on objecting to the continuation of the assessment proceedings pursuant to the impugned notice. The Assessing Officer, however, instead of taking corrective steps under section 292B of the Act and issuing notice to the heirs and legal representatives, insisted on continuing with the proceedings pursuant to the impugned notice which was issued in the name of a dead person. Since strong reliance has been placed by the learned counsel for the respondent on the provisions of section 2(7) and 2(29) read with sections 159 and 292B of the Act, reference may be made to the said provisions, which read as under: "Section 2(7) "assessee" means a person by whom any tax or any other sum of money is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub- section (5), be limited to the extent to which the estate is capable of meeting the liability. "292B. Return of income, etc., not to be invalid on certain grounds. - No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." 13. Thus, the expression "assessee" includes every person who is deemed to be an assessee under any provision of the Act. Sub-section (3) of section 159 of the Act, postulates that the legal representative of the deceased shall, for the purposes of the Act, be deemed to be an assessee. Subsection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the notice under section 148 of the Act issued to the dead person, cannot be continued against the legal representative. 16. On behalf of the revenue, it has been contended that issuance of the notice to the dead assessee is merely a technical defect which could be corrected under section 292B of the Act. Reliance has been placed on the above referred decisions of the Supreme Court as well as the High Courts for contending that the proceedings would not be null and void merely because the notice has been issued against a dead person as the legal representative had received the notice and has objected to the validity of the notice and further continuation of the proceedings. In the opinion of this court, here lies the distinction between those cases and the present case. In the relied upon cases, the legal representative, in response to the impugned notice, filed return of income and participated in the proceeding and then raised an objection to the validity of the proceeding and, therefore, the court held that this was a case of waiver and that a technical defect can be waived; whereas in this case, right from the inception the petitioner has objected to the validity of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the opinion of this court, the decision of this court in the case of Rasid Lala v. Income Tax Officer, Ward-1(3)(6) (supra) would be squarely applicable to the facts of the present case. Therefore, in view of the provisions of section 159(2)(b) of the Act, it is permissible for the Assessing Officer to issue a fresh notice under section 148 of the Act against the legal representative, provided that the same is not barred by limitation; he, however, cannot continue the proceedings on the basis of an invalid notice issued under section 148 of the Act to the dead assessee. 19. In the facts of the present case, as noticed hereinabove, the notice under section 148 of the Act, which is a jurisdictional notice, has been issued to a dead person. Upon receipt of such notice, the legal representative has raised an objection to the validity of such notice and has not complied with the same. The legal representative not having waived the requirement of notice under section 148 of the Act and not having submitted to the jurisdiction of the Assessing Officer pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted and hence, the notice under section 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued notice upon writ applicant as legal representative representing estate of deceased assessee. Thus, we are of the view that the proceedings initiated by the Assessing Officer against the deceased assessee are not tenable in the eye of law and are required to be quashed and set aside. In the result, the impugned notices are invalid and does not confer jurisdiction upon the Assessing Officer to proceed against the writ applicant. 10. In the result, the writ application succeeds and is hereby allowed. The impugned notices are hereby quashed and set aside and the consequential proceedings taken up pursuant to such notices also stands terminated. Rule is made absolute." 6.4 Since the notice under Section 148 of the Act has been issued upon the deceased assessee, who had expired prior to the issuance of such notice, the case on hand does not fall under Clause (a) of sub-section 2 of Section 159 of the Act and in such circumstances, even the proceedings pursuant to such notices as sought to be initiated by the Assessing Officer cannot be continued upon the deceased assessee. 6.5 Though clause (b) of sub-section (2) of section 159 of the Act provides that any proceeding which coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed." 6. Heard the ld. DR and perused the material on record. The assessee had expired on 10.07.2017 and the return was filed after the death of the assessee by the legal heir Sara Padaria wife of the assessee. The notice u/s 148 of the Act has been issued upon the deceased assessee who had expired prior to the issuance of such notice therefore, the notice issued aainst the deceased assessee is invalid. Once the assessee is dead no valid assessment or reassessment can be made in the name of the deceased. The ld. CIT(A) has referred the decision of Hon'ble Supreme Court in the case of Kanubhai Dhirubhai Patel Lr vs ITO, Ward 6(1)(1) dated 14.02.2022 (2020) 114 taxmann.com 482 (SC) wherein SLP filed against the decision of Hon'ble High Court of Gujarat holding that no valid notice can be issued on a dead person was dismissed. Further, the ld. CIT(A) also referred the decision of Hon'ble Gujarat High Court in the case of Chandreshbhai Jayantibhai Patel vs Income Tax Officer reported in (2019) 101 taxmann.com 362 (Guj) and various other decision as elaborated in the finding of ld. CIT(A) on the proposition that proceeding initiated by the assessing officer against the deceased assess ..... 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