In a recent ruling, the Delhi High Court has quashed an assessment order passed by the Income Tax Department due to its failure to include all legal heirs of a deceased assessee.
The court, presided over by Justice Rajiv Shakdher and Justice Girish Kathpalia, considered a writ petition challenging the notice issued solely to one legal heir, Darpan Kohli, instead of all surviving family members.
The case centered on a notice dated April 6, 2021, issued under Section 148 of the Income Tax Act, 1961, which addressed the order only to Darpan Kohli, the son of the deceased Kuldip Kohli. The petitioner argued that the proceedings initiated by the Respondent after Kuldip Kohli's demise should have encompassed all legal heirs and representatives, rather than singularly targeting Darpan Kohli.
During the proceedings, Senior Advocate M Sufian Siddiqui represented the Petitioners, while Senior Advocate Sunil Agarwal appeared on behalf of the Income Tax Department. Siddiqui contended that the Reassessment Notice was erroneously directed to the deceased assessee's name without acknowledging all the legal heirs on record.
The court emphasized that the Respondent was aware of Kuldip Kohli's passing and the presence of Petitioner no.1, Darpan Kohli, during the proceedings. Recognizing that the impugned assessment order, despite being addressed to the deceased assessee, referred to one legal heir, the court concluded that the Respondent had knowledge of the death and the involvement of Darpan Kohli.
Consequently, the Delhi High Court set aside the assessment order and directed the Assessing Officer (AO) to issue a new order, ensuring a comprehensive consideration of all legal heirs. The court emphasized the importance of including all concerned parties in tax proceedings and granting them the opportunity for a fair hearing.
This ruling serves as a reminder that tax assessments should encompass the entirety of a deceased assessee's legal heirs and representatives, respecting their rights and providing them with due process. The decision highlights the significance of procedural fairness and adherence to legal requirements in tax matters.
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