Bombay High Court

Devendra S/O. Vasudeo Jambhulkar ... vs Additional / Joint Commissioner ... on 13 July, 2023

Bench: A.S. Chandurkar, Vrushali V. Joshi

                                  1/15                     wp.5557.22-J.odt


               IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         NAGPUR BENCH : NAGPUR


                            WRIT PETITION NO. 5557/2022


      Shri Devendra S/o. Vasudeo Jambhulkar
      (Legal Heir of Late Vasudeo Damduji
      Jambhulkar)
      Aged about 39 years, Residing At Plot No.2,
      Shivtirth Nagar, Ghogali, Nagpur-440037,
      (State of Maharashtra).                           ----PETITIONER

                VERSUS

1.    Additional/Joint Commissioner of
      Income Tax, Range-4, Nagpur Saraf Chamber,
      Mount Road, Sadar, Nagpur.

2.    Dy. Commissioner of Income Tax
      Circle-4, Nagpur, Saraf Chamber,
      Mount Road, Sadar, Nagpur.

3.    Additional/Joint/Assistant Commissioner of
      Income Tax/ Income Tax Officer,
      National Faceless Assessment Centre,
      Delhi.                                            ----RESPONDENTS

Mr. R. S. Thakar, Advocate with Mr. S. C. Thakar, Advocate for Petitioner.
Mr. Anand Parchure, Advocate with Mr. B. N. Mohata, Advocate for Respondents.

       CORAM : A.S.CHANDURKAR AND MRS.VRUSHALI V. JOSHI, JJ.
       RESERVED ON : JULY 07, 2023
       PRONOUNCED ON : JULY 13, 2023.


JUDGMENT (PER : MRS.VRUSHALI V. JOSHI, J.)

1. Rule. Rule made returnable forthwith and heard finally with

consent of the learned Counsel for the parties.

2/15 wp.5557.22-J.odt

2. The petitioner has challenged the notice issued on dead

person under Section 148 of the Income Tax Act, 1961 (for short, "the I. T.

Act, 1961") dated 31.03.2021. The entire proceedings started from illegal

notice on a dead person under Section 147 of the I.T. Act, 1961 and

culminating into a reassessment order which is also on dead person raising

demand of Rs.5,89,18,411/- are wholly without jurisdiction.

3. The petitioner is the son and legal heir of late Vasudeo

Damduji Jambhulkar who was an income tax Assessee having Permanent

Account No. PAN : AKAPJ7925K and was assessed by respondent No.2,

who was working under the respondent No.1 the Joint Commissioner of

Income Tax, Range-4, Nagpur. The father of the petitioner died on

08.07.2020 leaving behind the petitioner as one of the legal heirs. During

his life time he had filed the Income Tax Return for the year 2016-17

declaring taxable income of Rs.5,57,090/- and exempt income on sale of

agricultural land of Rs.9,31,12,500/- which exempts under Section 10(37)

of the I.T.Act, 1961. Full taxes on the said returned income was also paid.

Said return was processed under Section 143(1) of the I.T. Act, 1961,

however since there was neither any tax payable or refundable, no

intimation under Section 143(1) was served on the Assessee. Income Tax

returns of late Shri Vasudeo Damduji Jambhulkar for subsequent years viz.

2017-18, 2018-19, 2019-20 were also filed by him while the Income Tax

3/15 wp.5557.22-J.odt

Return for the year 2020-21 was (F.Y. 2019-20) filed by the legal heir in

the name of the Assessee on 11.01.2021 as the said Assessee had already

died on 08.07.2020.

4. The respondent No.2 - DCIT/ACIT Circle 4, Nagpur issued

notice under Section 148 of the I.T.Act, 1961 in the name of Assessee Shri

Vasudeo Damduji Jambhulkar stating that income chargeable to tax for the

year 2016-17 of the Assessee has escaped assessment and accordingly he

was called upon to file the return for 2016-17 within 30 days. It was also

stated in the said impugned notice dated 31.03.2021 that he has issued

this notice after obtaining the necessary satisfaction of the

Additional/Joint CIT Range-4, Nagpur.

5. The learned Counsel for the petitioner has urged that the said

notice under Section 148 being issued on a dead person was illegal and

without jurisdiction on the face of it. The respondent No.3 again issued

notice under Section 142(1) of I.T. Act, 1961 on 02.02.2022 in the name

of deceased Assessee calling upon to comply with the requirements as

stated in earlier notice dated 30.06.2021. The petitioner being legal heir

filed brief reply on 07.02.2022 stating that the Assessee had already filed

return for the year 2016-17 on 31.03.2018 and enclosed therewith the

copy of the said return and computation of total income for the year 2016-

17. Thereafter, again respondent No.3 issued notice on 13.03.2022 in the

4/15 wp.5557.22-J.odt

name of the deceased - Assessee. The petitioner submitted reply

mentioning that the legal heir of the assessee has submitted the

submissions for scrutiny which disclosed that the assessee is no more.

6. The respondent No.3 again in the name of deceased person

issued notice under Section 144 of the I.T. Act, 1961 calling upon the said

Assessee to show cause as to why the ex parte assessment be not passed as

detailed in the said notice dated 27.03.2022. In spite of all these facts and

knowing full well that the Assessee Vasudeo Damduji Jambhulkar had died

and knowing full well that no notice of reopening of assessment or making

assessment can be issued to a dead person and knowing full well that no

assessment or reassessment can be made on a dead person. The

respondent No.3 passed impugned reassessment order under Section 147

read with Section 144 of the I.T.Act, 1961 on the dead person, which is an

absolute nullity and non-est. The issue of impugned notice under Section

148 is illegal as there was neither any information or material validly

suggesting and escapement of income.

7. The deceased Assessee during his life time filed the return of

his income for assessment year 2016-17 declaring income of Rs.5,57,090/-

and exempt income on sale of agricultural land for Rs.9,31,12,500/- under

Section 10(37) of the I.T. Act, 1961. The said return was processed and

accepted. Thereafter, the respondent No.2 reopened the said assessment

5/15 wp.5557.22-J.odt

by issuing notice under Section 148 dated 31.03.2021 on the ground that

as per information available with the department, the Assessee sold one

immovable property for a consideration of Rs.9,31,12,500/-. This

transaction has not been shown by the Assessee in his return of income for

the year under consideration and hence he has reason to believe that

income chargeable to tax has escaped assessment.

8. Even assuming that the respondent No.2 was not aware of the

death of the deceased still that will not validate the notice under Section

148 on dead person as held by the Hon'ble Delhi High Court in the case of

Mrs. Sripathi Subbaraya Manohara Vs. Principal Commissioner of Income

Tax and Anr. [(2021) 436 ITR P. 469] (Delhi) as under :

"There is no statutory requirement imposing an obligation upon legal heirs to intimate the death of the Assessee ................... consequently whether the permanent account number (PAN) record was updated or not or whether the Department was made aware by the legal representative or not is irrelevant."

9. Even during the reassessment proceedings the legal heirs who

filed submission and documents made the respondent No.3 aware of the

death of the deceased especially in submission on dated 15.03.2022 and

28.03.2022 still the respondent No.3 passed impugned reassessment order

under Section 147 read with Section 144 of the I.T. Act, 1961. Hence,

6/15 wp.5557.22-J.odt

prayed to set aside the order passed by the respondent as there is no bar

to exercise writ jurisdiction.

10. The respondents have opposed the petition stating that the

petitioner has now chosen to challenge the validity of the notice under

Section 148 of the I.T. Act, 1961 by this petition only after the orders

having gone against him which is untenable in law since the petitioner

cannot turn around after participation in the proceedings without

questioning the validity of notice. The contentions raised in the petition

can also be agitated in the Appellate remedies available under the Act

while questioning the validity of assessment order. The petition is not

tenable on the ground of availability of alternate remedy.

11. The other ground raised by the petitioner is that the

impugned notices were issued in the name of deceased Assessee and

therefore, the proceedings are vitiated. The petitioner or anybody on his

behalf had never submitted document to demonstrate that the Assessee

has expired on 08.07.2020 and in spite of service of notice even death

certificate of the deceased Assessee was not furnished. On the other hand,

returns for the assessment year 2020-21 have been filed on 11.01.2021 in

the name of deceased Assessee and the same were not filed on behalf of

legal heirs of the deceased Assessee. The petitioner has miserably failed to

point out as to how any of his fundamental rights have been infringed nor

7/15 wp.5557.22-J.odt

has pointed out that there was either error of jurisdiction or failure of

principle of natural justice. The tenability of the petition itself is in doubt

particularly in the light of the decision of the Madras High Court in the

matter of Penta-Media Graphic Ltd. Vs. ACIT (2022) Taxman.com.48

Madras). In view of availability of alternate remedy, the petitioner cannot

invoke the writ jurisdiction of this Court after inviting impugned order.

The petition being devoid of any substance is therefore, liable to be

dismissed.

12 We have heard both the parties and considered the documents

on record.

13. According to the respondents, the writ petition is not

maintainable to challenge the notice under Section 148 of the I.T. Act,

1961 as alternate remedy is available. It is well settled law that an

alternative statutory remedy does not operate as a bar to maintainability

of a writ petition in at least three contingencies, namely, where the writ

petition has been filed for enforcement of the Fundamental Rights or

where there has been a violation of the principles of natural justice or

where the order or notice or proceedings are wholly without jurisdiction

or vires of an Act is challenged. In the present case, the notice dated

31.03.2021 under Section 148 of the I. T. Act, 1961 was issued to

deceased assessee after the date of his death (08.07.2020) and thus

8/15 wp.5557.22-J.odt

inevitably the said notice could never have been served upon him.

Consequently, the jurisdictional requirement under Section 148 of the I.T.

Act, 1961, service of notice was not fulfilled. The Hon'ble Delhi High

Court in the case of Mrs. Sripathi Subbaraya Manohara Vs. Principal

Commissioner of Income Tax and Anr. [(2021) 111 CCH 0099 DelHC] has

observed as under :

"9. The objections raised by the learned counsel for the respondents on the maintainability of the present petition, as also on merit, are no longer res integra, having been elaborately discussed and rejected by this Court in its judgment in Savita Kapila (supra) authored by one of us (Hon'ble Mr. Justice Manmohan). Therefore, instead of re- visiting the issues raised, we would merely reproduce the findings given by this Court in its referred judgment:

"AN ALTERNATIVE STATUTORY REMEDY DOES NOT OPERATE AS A BAR TO MAINTAINABILITY OF A WRIT PETITION WHERE THE ORDER OR NOTICE OR PROCEEDINGS ARE WHOLLY WITHOUT JURISDICTION TO INITIATE ASSESSMENT PROCEEDINGS. THE MERE FACT THAT SUBSEQUENT ORDERS HAVE BEEN PASSED WOULD NOT RENDER THE CHALLENGE TO JURISDICTION INFRUCTUOUS.

24. Further, the fact that an assessment order has been passed and it is open to challenge by way of an appeal, does not denude the petitioner of its right to challenge the notice for assessment if it is without jurisdiction. If the assumption of jurisdiction is wrong, the assessment order passed

9/15 wp.5557.22-J.odt

subsequent would have no legs to stand. If the notice goes, so does the order of assessment. It is trite law that if the Assessing Officer had no jurisdiction to initiate assessment proceeding, the mere fact that subsequent orders have been passed would not render the challenge to jurisdiction infructuous."

14. Another contention of the respondents is that as the petitioner

has responded the notice and participated the proceeding, Section 292 BB

comes in picture and the notice issued against dead person can not be a

nullity. Section 292 BB reads thus :

"292BB. Notice deemed to be valid in certain circumstances. Where an assessee has appeared in any proceeding or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was --

                (a)      not served upon him; or
                (b)      not served upon him in time; or
                (c)      served upon him in an improper manner: Provided that

nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment."

10/15 wp.5557.22-J.odt

14. A cursory look at Section 292BB would show that the same would apply only to two types of proceedings namely

(i) proceedings, in which, the assessee had appeared and (ii) any inquiry, in which, the assessee had cooperated.

15. In the case on hand, the assessee was dead. It was the assessee's son, who appeared and perhaps cooperated. Therefore, the primary condition for the invocation of Section 292BB is absent in the case on hand.

16. Section 292BB is in place to take care of contingencies where an assessee is put on notice of the initiation of proceedings, but who takes advantage of defective notices or defective service of notice on him. It is trite to point out that the purpose of issue of notice is to make the noticee aware of the nature of the proceedings. Once the nature of the proceedings is made known and understood by the assessee, he should not be allowed to take advantage of certain procedural defects. That was the purpose behind the enactment of Section 292BB. It cannot be invoked in cases where the very initiation of proceedings is against a dead person."

15. The learned Counsel for the petitioner has relied on the

judgment of the Madras High Court in Commissioner of Income Tax Vs. M.

Hemanathan [(2016) 95 CCH 0132 ChenHC] where in it has observed as

under :

"30. A Bench of this Court, to which, one of us (VRSJ) was a party, had pointed out in Gopalakrishnan G.S. Vs. State of

11/15 wp.5557.22-J.odt

Tamil Nadu [2006 (4) CTC 757], that a distinction has always to be maintained between judicial/ quasi judicial proceedings and other proceedings. In Savithriammal Vs. State of Tamil Nadu [2006 (3) MLJ 389], a Division Bench of this Court had categorically pointed out that the notification issued in the name of a dead person is a nullity. In Smt. Lila Vati Bai Vs. State of Bombay [AIR 1957 SC 521], the Constitution Bench of the Supreme Court had carved out an exception.

31. The case on hand will not fall under the said exception. Therefore, the very initiation of the proceedings against the dead person and the continuation of the same despite having noticed the factum of death of the assessee, cannot be approved."

16. The learned Counsel for the petitioner has relied on the

judgment of the Gujrat High Court in the case of Jaydeepkumar Dhirajlal

Thakkar Vs. Income Tax Officer [(2018) 101 CCH 0085 GujHC].

"In the context of section 292BB of the Act, has held that the same would apply only to two types of proceedings namely -

(i) proceedings, in which, the assessee had appeared; and (ii) any inquiry, in which, the assessee had cooperated."

17. The issue which falls for consideration is as to whether the

impugned notice under Section 148 of the I.T. Act, 1961 is issued in the

name of dead person said Shri Vasudeo Jambhulkar is enforceable in law.

The fact that Shri Vasudeo Jambhulkar died on 08.07.2020 is not

12/15 wp.5557.22-J.odt

disputed. The notice issued in the name of the dead person is

unenforceable in the eye of law.

18. The respondents seek to justify their stand by contending that

they were not intimated about the death of the assessee. The legal heirs

did not take any steps to cancel the PAN registration in the name of

assessee.

19. It has observed by the Delhi High Court in Savita Kapila Legal

Heir of Late Shri Mohinder Paul Kapila Vs. Assistant Commissioner of

Income Tax [(2020) 108 CCH 0049 DelHC] as under :

"In the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department"

"Consequently, the legal heirs are under no statutory obligation to intimate the death of the assessee to the revenue."

20. While informing on mail, the petitioner has mentioned that

the legal heirs of the assessee submits the documents which proves that it

was sufficient for the respondents to know that the assessee is no more

and the legal heirs are submitting the documents. Legal heirs are under

no statutory obligation to intimate the death of the assessee to the

department. It is also observed by the Delhi High Court in Savita Kapila

13/15 wp.5557.22-J.odt

Legal Heir of Late Shri Mohinder Paul Kapila Vs. Assistant Commissioner

of Income Tax [(2020) 108 CCH 0049 DelHC] as under :

"32. This Court is of the view that in the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department. After all, there may be cases where the legal representatives are estranged from the deceased assessee or the deceased assessee may have bequeathed his entire wealth to a charity. Consequently, whether PAN record was updated or not or whether the Department was made aware by the legal representatives or not is irrelevant."

21. The Madras High Court in Alamelu Veerappan Vs. Income Tax

Officer [(2018) 102 CCH 0118 ChenHC] has observed as under :

"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 the assessee or take steps to cancel the PAN registration."

22. The High Court of Mumbai in Sumit Balkrishna Gupta Vs. Assistant Commissioner of Income Tax [(2019) 104 CCH 0379 MumHC] has observed as under :

"7. The issue of a notice under Section 148 of the Act is a foundation for reopening of assessment. The sine qua non for

14/15 wp.5557.22-J.odt

acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of the correct person. This requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee. The assessee on whom the notice must be sent must be a living person i.e legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and purpose of the Act. Therefore, Section 292B of the Act cannot be invoked to correct a foundational / substantial error as it is meant so as to meet the jurisdictional requirement."

23. The learned Counsel for the petitioner has also relied on the

judgment in the case of Dharamraj Vs. Income Tax Officer [(2022) 113

CCH 0096 DelHC].

24. The Principal Seat of this Court has recently passed the order

in Writ Petition No.10163/2022 (Dhirendra Bhupendra Sanghvi Vs.

Assistant Commissioner of Income Tax and Ors.) and has observed that the

notice issued on dead persons is null and void.

15/15 wp.5557.22-J.odt

25. For the reasons stated above and several High Courts have

observed that the notice issued on dead person or re-opening of

assessment of a dead person is null and void, this Court holds that the

notice and all consequential proceedings in the name of the deceased