I-T notice issued against a dead person not valid: Delhi HC

Income Tax notice against a dead person is ‘null and void’, Delhi High Court has said. This is third such ruling in two years.

The Court also highlighted from previous ruling that it is not a statutory obligation on the part of legal heir to inform the Income Tax Department about death of the assessee.

“As the notice under Section 148 of the Act was issued against a dead person, the same is null and void and all consequent proceedings/orders, including the assessment order and the subsequent notices, being equally tainted, are liable to be set aside,” a Division Bench of Justices Navin Chawla and Manmohan said while disposing a petition recently.

Section 148 of the Income Tax Act, 1961 prescribes norms for issuance of notice where income has escaped assessment.

The case

In the present matter, Delhi resident Dharamraj moved to the Court after the Income Tax Department issued a notice in the name of Bhanger Singh Tanwar.

Notice was issued on March 30, 2019, while assessee died on January 14, 2016.

Following the notice, show cause notice was also given and finally an assessment order was issued against the assesse. The petitioner challenged the above notices and proceedings on the ground that they were initiated against a person who had died prior to the issuance of notice and therefore, all proceedings are void ab initio.

Income Tax Department said the notice was issued at the address mentioned in its data base. All other communication including assessment order making an addition of over ₹48.53 lakh were sent to the same address.

However, barring the assessment order none of the correspondence was received back in the office of the Income Tax Department. Only the assessment order was received back with the remark that the addressee had died, the department said while adding that factum of death of the Assessee was never communicated to the respondent by the legal heirs.

After hearing all arguments, the Court held that notice and proceedings against a dead person is no longer res integra (new or untouched matter). In fact, last year, the same Bench has ruled in the matter of Sripathi Subbaraya Manohara, legal heir of late Sripathi Subbaraya Gupta ruled that notice issued in the name of a dead person, is null and void, and all consequent proceedings/orders, including the assessment order and notices, being equally tainted, are liable to be set aside

Previous judgments

Similarly in July 2020, the same Court said that legal heirs are under no statutory obligation to intimate the death of the assessee to the Income Tax Department.

Also, the responsibility of paying dues will lie with the legal representative, if she/he steps into the shoes of the deceased assessee. These observations made in a matter involving Savita Kapila, legal heir of late Mohinder Paul Kapila and the tax department. This case referred to quashing of a notice dated March 31, 2019, in the name of late Kapila, who expired on December 21, 2018.

“Section 159 (Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died) of the Act, 1961 applies to a situation where proceedings are initiated/pending against the assessee when he is alive and after his death the legal representative steps into the shoes of the deceased assessee,” the Court said, adding that since that is not the present factual scenario, this particular section does not apply to the present case. Finally, the Court quashed all the notices and orders by the tax department.

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