IT : Notice issued in name of dead person is not enforceable in law

[2018] 95 taxmann.com 155 (Madras)


HIGH COURT OF MADRAS


Alamelu Veerappan

v.

Income Tax Officer, Non-corporate Ward-2(2), Chennai*

T.S. SIVAGNANAM, J.

WRIT PETITION NO. 30060 OF 2017

WMP NO. 32631 OF 2017

JUNE 7, 2018

Section 159, read with sections 148 and 292B, of the Income-tax Act, 1961 - Legal representatives (Notice to dead person) - Assessment year 2010-11 - Whether notice issued in name of dead person is not enforceable in law - Held, yes - Whether there is no statutory obligation on part of legal representative of deceased to immediately intimate death of assessee or take steps to cancel PAN registration - Held, yes [Para 17] [In favour of assessee]

FACTS

The assessee was the wife of the 'S', who died on 26-1-2010. She received a notice dated 30-3-2017 addressed to her late husband. In the said notice, it was stated that certain income of 'S' escaped assessment.

The assessee sent a reply pointing out that her husband had already died and enclosed a copy of the death certificate to establish the said fact.

The assessee was, however, informed that she should submit all the documents pertaining to her husband's assessment including the details of bank account statements etc.

The assessee filed instant petition contending that the impugned notice was void and unenforceable in law, as it had been issued to a dead person.

HELD

The issue, which falls for consideration, is as to whether the impugned notice under section 148 in the name of the dead person is enforceable in law and the subsidiary issue being as to whether the assessee, being the wife of the said 'S', can be compelled to participate in the proceedings and respond to the impugned notice. The fact that the 'S' died on 26-1-2010 is not in dispute. If this fact is not disputed, then the notice issued in the name of the dead person is unenforceable in the eye of law. [Para 14]

The department seeks to justify their stand by contending that they were not intimated about the death of the assessee, that the legal heirs did not take any steps to cancel the PAN registration in the name of the assessee and that therefore, the department was justified in directing the assessee to cooperate in the proceedings pursuant to the impugned notice. [Para 15]

The settled legal principle being that a notice issued in the name of the dead person is unenforceable in law. If such is the legal position, would the revenue be justified in contending that they, having no knowledge about the death of the assessee, are entitled to plead that the notice is not defective. The answer to the question should be definitely against the revenue. [Para 16]

Admittedly, the limitation period for issuance of notice for reopening expired on 31-3-2017. The impugned notice was issued on 30-3-2017 in the name of the dead person. On being intimated about the death, the department sent the notice to the assessee - his spouse to participate in the proceedings. This notice was well beyond the period of limitation, as it has been issued after 31-3-2017. The problem sans complicated facts, a notice issued beyond the period of limitation, i.e., 31-3-2017 is a nullity, unenforceable in law and without jurisdiction. Thus, merely because the department was not intimated about the death of the assessee, that cannot, by itself, extend the period of limitation prescribed under the Statute. Nothing has been placed on record by the revenue to show that there is a statutory obligation on the part of the legal representative of the deceased to immediately intimate the death of the assessee or take steps to cancel the PAN registration. [Para 17]

In such circumstances, the question would be as to whether section 159 would get attracted. The answer to this question would be in the negative, as the proceedings under section 159 can be invoked only if the proceedings have already been initiated when the assessee was alive and was permitted for the proceedings to be continued as against the legal heirs. The factual position in the instant case being otherwise, the provisions of section 159 have no application. [Para 18]

The revenue seeks to bring their case under section 292B to state that the defect is a curable defect and on that ground, the impugned notice cannot be declared as invalid. [Para 19]

The language employed in section 292B is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the revenue to invoke section 292B. [Para 20]

For all the above reasons, the impugned notice is wholly without jurisdiction and cannot be enforced against the assessee. [Para 26]

Accordingly, the writ petition is allowed. [Para 27]