The Karnataka High Court has held that if the statutorily prescribed time limit has expired as against the deceased himself, as has happened in this case then no proceedings can be taken against his Legal representatives (LRs).
The bench of Justice Krishna S Dixit and Justice G Basavaraja has observed that there is no provision in the Income Tax Act, 1961 which provides for discounting the time spent during the pendency of proceedings against the deceased Assessee while computing the limitation period for initiating the proceedings against his Legal Representatives. Therefore, department cannot seek any such discount.
The Assessing Authority received information that the Assessee Smt.Ramanatha Gurulakshmi had huge cash deposits and that during the Assessment Year 2016-17 she had made transactions pertaining to immovable properties and further that she had not filed her Returns of Income declaring interest from the deposits and capital gains.
A notice dated 31.01.2023 was issued to her under section 148A(b) of the Income Tax Act, 1961 by Speed Post whereby she was asked to show as to why notice under section 148 should not be issued. The Speed Post came to be served on 03.02.2023 and service is vouched by postal records. Second notice was sent on 15.02.2023.
As no reply was filed to the above notices, order under section 148A(d) came to be passed on 11.03.2023 and further notice under section 148 also was issued directing the Assessee to file her returns. This was followed by a statutory notice issued under section 142(1) by Speed Post.
However, it went back unserved with a postal shara ‘Deceased’. Yet another notice followed under the same provision. The Respondent sent the reply dated 28.11.2023 mentioning that the Assessee died on 14.10.2022.
The Assessing Authority after referring to Section 159(2)(d) of the Income Tax Act made the Assessment against the deceased Assessee for the Assessment Year 2016-17.
The petitioner filed writ petition laying a challenge inter alia to the above Assessment Order, Computation Sheet, Notice of Demand & Notice of Penalty mainly on the ground that, all they were generated against a dead person and consequently were liable to be treated as null & void and therefore could not be enforced against him, even if he is a legal representative of the deceased.
The Single Judge agreed with this and granted relief to him. Aggrieved thereby, this Intra-Court Appeal is preferred. The Writ Petitioner who happens to be the Respondent in this Appeal is on Caveat through his counsel, who opposes the Appeal making submission in justification of the reasons of the Single Judge.
The court while ruling against the Income Tax department held that no provision of law in general and no section of 1961 Act in particular are brought to our notice. Clause (b) of Section 159(2) enables proceedings being taken against Legal Representatives of the deceased, is true. However, that is subject to such proceedings being capable of being taken against the deceased.
Case Details
Case Title: The Income Tax Officer Versus Smt.Preethi V
Case No.: Writ Appeal No. 1407 Of 2024 (T-IT)
Date: 22/01/2025
Counsel For Petitioner: Y V Raviraj
Counsel For Respondent: Sandeep Huilgol
