The Delhi HC, in SAVITA KAPILA v. ASSISTANT COMMISSIONER OF INCOME TAX, held that existence of a remedy does not put up a bar on a person from filing the writ petition. The court also said that under Section 148 of the Income Tax Act, 1961 it is important to issue a notice in the name of the correct person. The court clarified that under Section 159 legal heir will be liable only when proceedings were initiated during the lifetime of the assessee.
Facts
It was noticed by the Assessing Officer of Income Tax Dept. that no return had been filed by the assessee-Shri Mohinder on the deposits and the source remained unexplained. Mr. Mohinder was then booked under Section 147/148 of the Income Tax Act, 1961 on 28 March 2019. He however passed away in 2018. A notice was sent on 31 March 2019 on the day of limitation in the name of the deceased to his last known address. Subsequently, more notices were served which obviously could not reach him or his legal heirs. A show-cause notice was then issued. Pursuant to this, the petitioner’s phone number was traced. The assessing officer then issued an order to legal heirs for non-compliance with notices. A final show cause notice was issued directing to file the return or assessment order would be filed. Proceedings were transferred to petitioner and assessment order was passed in her name whereby the addition of Rs. 21,31,000 was made and demand for Rs. 14,19,060 was raised.
Petitioner’s Arguments
The counsel for petitioners claimed that the statutory requirement of service under Section 148 of the Act, 1961 had not been fulfilled and pointed that the above-mentioned notices were not issued to petitioner or any legal representative and proceeding were transferred to the petitioner and no other legal representative. The proceedings, he said, were barred by limitation under Section 149(1)(b). Also, Section 159 would not apply to the present case because it is applicable when proceedings had started against the person and then they die and the legal heir had to step in their suit.
Respondent’s Arguments
The counsel argued the maintainability of the court and claimed that the petitioner must approach the Appellate Commissioner under Section 246A of the Act, 1961 for grievance. He claimed that the assessment proceeding can not be null and void because the Assessing officer was unaware of the death and said the legal representative is liable under Section 159. They also claimed that it was duty of the legal representative to intimate about the death of the revenue. He contended that the Revenue had acted bona fide at the time of issuance of notice under Section 148. Lastly, they claimed that Section 292BB would be attracted to the case petitioner would be prevented from questioning the validity of the notice.
Rejoinder from Petitioner
The petitioner claimed that there was no obligation upon the legal heirs to intimate about the death. The counsel then said, “the petitioner had merely uploaded the death certificate of the deceased-assessee online and had in fact neither filed a return on behalf of the deceased-assessee nor submitted to the jurisdiction of the assessing officer and had not even waived the requirement of Section 148 of the Act”.
Court’s Reasoning
Firstly the court said that an alternative statutory remedy does not operate as a bar to the maintainability of a writ petition. Further, if the assessment order has been passed it can be challenged by the way of appeal and does not ostracise the petitioner’s right to challenge the notice for assessment if it is without jurisdiction. The court also said that the jurisdictional requirement under Section 148 of the Act, 1961 of service of notice was not fulfilled in the present instance because it is important to issue a notice in the name of the correct person. Also, no notice was issued under Section 148 to the petitioner during limitation and hence the proceedings are barred under Section 149(1)(b). The court rejected the respondent’s contention and said that Section 159 won’t be applicable in this case as proceedings were not initiated against assessee when he was alive. Lastly, the court said that there was no obligation to report about the death of the assessee. Section 292B does not apply to the present case as the issuance of notice to a dead person does not come under the ambit of mistake and 292BB is applicable on the assessee and not the legal heir.
Read Judgment @Latestlaws.com
