The Bombay High Court has held that reassessment cannot be initiated in the case of an active PAN of the deceased assessee.

The division bench of Justice Dhiraj Singh Thakur and Justice Kamal Khata has quashed the show cause notice under Section 148A(b) along with consequential proceedings and an order under Section 148A(d) passed in the name of the deceased Assessee as null and void.

BACKGROUND

The Petitioner is the legal heir of the deceased assessee, who expired on December 4, 2019 at Gandhinagar. The deceased assessee had filed her return of income on June 5, 2018, declaring her total income earned from capital gains and income from other sources as the deceased was an investor in shares.

The deceased and her family had applied for a change of address in PAN as well as a transfer of jurisdiction on account of a shift in residence from Mumbai to Gandhinagar. However, the file of the deceased was not transferred; files of other family members were transferred to Gandhinagar for reasons best known to the Respondents.

In spite of being aware, the Respondent issued notice under Section 148A(b) of the Act in the name of the deceased. He pointed out that though the notice was dated March 19, 2022, it could be evinced that it was signed on March 26, 2022, and the deceased assessee was asked to reply by March 28, 2022; consequently, less than seven days’ time was given in contravention of the provisions of Section 148A of the Act.

The petitioner submitted that the Petitioner filed a reply giving all reasons and details to substantiate that there was no case to issue notice. The Respondent passed an order disposing of the objections with the prior approval of the respondent. On the same day, a notice u/s 148 was issued in the name of the deceased assessee, requiring her to file a return of income within 30 days. The Petitioner, as the legal heir, filed the return of income under protest and also sought a copy of the reasons recorded for reopening the assessment.

The respondent department contended that, having accepted the notification order passed by the CPC, the Petitioner cannot complain about the reassessment proceedings in the name of the deceased.

OBSERVATION

The court noted that the notice for reopening the assessment was issued to a dead person. There are several judgments of different High Courts holding that the notice issued on a dead person or the reopening of an assessment of a dead person is null and void in law, and the requirement of issuing a notice to the correct person is not merely a procedural requirement but a condition precedent for a notice to be valid in law.

Case Title: Dhirendra Bhupendra Sanghvi Versus Dhirendra Bhupendra Sanghvi

Citation.: Writ Petition No. 10163 Of 2022