Taxation Law | Issuing Notices to a Dead Person is a Fundamental Jurisdictional Error: Delhi HC Sets Aside Reassessment Proceedings

Today, Delhi High Court in Kinshuk Goel v. Assistant Commissioner of Income Tax Circle 49(1) quashed reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961. The court ruled that issuing notices to a deceased person is a fundamental jurisdictional error, thereby invalidating the subsequent proceedings. The court underscored that once the death of an assessee is communicated, authorities must issue notices in the name of the legal heirs, failing which the entire process becomes legally unsustainable.

The writ petitioner, Kinshuk Goel, legal heir of the late Vijay Shankar Goel, challenged the reopening of assessment for Assessment Year (AY) 2015-16 under Section 148 of the Income Tax Act. Vijay Shankar Goel had filed his income tax return for AY 2015-16 on October 31, 2015, but passed away on May 10, 2021. Subsequently, notices under Section 148 were issued in his name on April 8, 2021, before his demise.

After Vijay Shankar Goel's death, his son, Kinshuk Goel, informed the Income Tax Department about his father’s passing and provided details of the legal heirs. Despite this, the department issued additional notices, including those under Section 148A(b) and Section 142(1), to the deceased. The petitioner participated in the reassessment proceedings, but later challenged the notices issued in the name of his deceased father, citing procedural irregularities.

The primary issue was the validity of reassessment notices issued to a deceased person. The petitioner argued that once the death of an assessee is known, the Income Tax Department is required to issue notices to the legal heirs, and failing to do so renders the proceedings null and void. The court emphasized that Section 148 notices are foundational for reopening assessments, and issuing them to a dead person fundamentally affects the legality of the proceedings.

The court observed that the department failed to revise the notice despite being informed about the death of the assessee and receiving particulars of the legal heirs. It referred to previous judgments, including Savita Kapila v. Assistant Commissioner of Income Tax, where it was held that issuing a notice to a deceased person is not a mere procedural error but a jurisdictional defect. The court in the current case stated:

"The requirement of issuing notice to the correct person and not to a dead person is not merely procedural but is a condition precedent to the notice being valid in law."

The Delhi High Court relied on several precedents to establish that notices issued to a deceased person are invalid, including:

Savita Kapila v. Assistant Commissioner of Income Tax: Held that reopening notices under Section 148 issued to a deceased assessee are null and void.

Chandresh Jayantibhai Patel v. ITO: The Gujarat High Court ruled that a notice issued under Section 148 to a deceased person is a jurisdictional defect and invalidates the entire reassessment.

Durlabhbhai Kanubhai Rajpara v. Income Tax Officer: The Gujarat High Court set aside reassessment proceedings initiated against a dead person, a ruling later upheld by the Supreme Court.

The Delhi High Court concluded that the issuance of notices under Section 148A(b) and the final notice under Section 148, both issued on May 26, 2022 and July 30, 2022 respectively, were legally unsustainable since they were in the name of the deceased. The court ruled:

"Since the petitioner had already informed the Department about the death of the deceased, his participation in the reassessment proceedings cannot be regarded as waiver or submitting to the jurisdiction of the Assessing Officer without objection."

The court quashed the impugned notices and set aside the reassessment proceedings for AY 2015-16, declaring them null and void due to jurisdictional errors. The petition was accordingly allowed.

Date of Decision:September 26, 2024

Kinshuk Goel v. Assistant Commissioner of Income Tax Circle 49(1)​.