High Court directs CBDT to issue instruction u/s 119 for recalling notice issued to a dead person
In a recent judgment, Hon’ble Bombay High Court while quashing a notice u/s 148 issued in the name of a deceased person, has advised CBDT to issue an instruction under Section 119 of the Income Tax Act, 1961 for the purpose of recalling a notice which is issued to a dead person.
ABCAUS Case Law Citation:
4280 (2024) (10) abcaus.in HC
In the instant case, the Petitioner had filed a Writ Petition praying for quashing of impugned show cause notice issued u/s 148A(b), order passed u/s 148A(d) and consequential notice u/s 148 of the Income Tax Act, 1961 (the Act) by the Assessing Officer (AO) for the assessment year 2020-21.
The Petitioner was widow of the person in whose name all the said notices had been issued. It was the grievance of the widow that the entire proceeding is vitiated since the first notice for re-opening of the assessment is issued in the name of a dead person and the same obviously could not have been served on such a dead person.
It was submitted that the Petitioner’s husband had died due to the Covid-19 pandemic. The notice u/s 148A(b) was issued after two and half year after the demise of the Petitioner’s husband.
The counsel for the Income Tax Department submitted that there is no specific provisions under the Act which would enable the Income Tax Authority which had issued such notice, to withdraw the notice. The Petitioner submitted that the Central Board for Direct Taxes (CBDT) can issue certain instructions under Section 119 of the Income Tax Act by way of instructions for ensuring the effective administration of the Department.
The Petitioner referred to a judgment delivered by the Delhi High Court wherein it had been concluded that as there is an absence of a statutory provision casting a duty upon a legal representative to intimate the factum of death of an asessee to the Income Tax Department, the legal representative is not under any statutory obligation to convey the death of the assessee. Further, the Madras High Court held that there is no provision which casts a statutory obligation on the part of the legal representatives of the deceased to immediately intimate the death of the assessee or take steps to cancel the PAN registration.
The Hon’ble High Court observed that there cannot be a debate that it is the duty of the Department to ensure that it’s notice is issued and executed on a person to whom it is intended to be served. If the Department gets knowledge after issuance of such a notice that the concerned assessee has passed away, there must be a mechanism to recall such a notice since, it would be a wasteful exercise to spend time for attempting to serve such a notice on a dead person, in as much as, it would not advance the case of either of the parties since a dead person would not be answerable to or respond to the notice and the legal heirs, unless served with a notice, would have no authority to reply to the said notice.
The Hon’ble High Court noted that the CBDT has the scope of issuing instructions under Section 119 of the Income Tax Act for ensuring effective and proper administration. The Hon’ble High Court advised the CBDT that if there is no other legal impediment, to issue appropriate instructions to the concerned Departments to recall or withdraw such a notice, once it is brought to the knowledge of the Authority that the addressee has passed away.
The Hon’ble High Court emphasised that there must be a provision to withdraw such notice, lest every legal representative will be compelled to file a Petition in this Court and pray for an order for quashing the said notice. The Hon’ble High Court expressed trust that the CBDT would consider this observation for issuing an instruction under Section 119 for the purpose of recalling a notice which is issued to a dead person.
In view of the above, the Writ Petition was allowed quashing the impugned notices for having been issued to a dead person. The Department was given liberty to issue an appropriate notice in place of the earlier notice, to the appropriate legal representative and proceed with the matter.
The Hon’ble High Court directed that AO to place the copy of its order before the CBDT for compliance.
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