Karnataka High Court Sets Aside Reassessment Proceedings
The Karnataka High Court has made a significant ruling in a case involving a deceased individual, quashing the entire reassessment proceedings for Assessment Year (AY) 2020-21. This decision highlights the importance of ensuring that tax notices are issued to living individuals.
- The court set aside the notices under Section 148A(b) of the Income Tax Act, 1961, as well as all subsequent proceedings, including the assessment order and penalty orders.
- The court held that any proceedings initiated against a deceased person are void ab initio and have no legal validity.
- The court granted liberty to the Department to initiate fresh proceedings in accordance with law against the legal representatives, keeping the merits of the case open.
Readers should care about this development as it underscores the need for tax authorities to verify the status of individuals before issuing notices. This ruling may have implications for other cases where tax notices have been issued to deceased individuals, and it highlights the importance of ensuring compliance with tax laws.
The Karnataka High Court set aside the entire reassessment proceedings for AY 2020–21 on the fundamental ground that the notice under Section 148A(b) was issued in the name of a deceased person. The Court noted that the assessee had passed away prior to issuance of the notices, and this fact was supported by the death certificate placed on record. It held that any proceedings initiated against a dead person are void ab initio and have no legal validity. Consequently, not only were the notices under Section 148A(b) quashed, but also all subsequent proceedings including the order under Section 148A(d), assessment order and penalty orders were set aside. At the same time, the Court granted liberty to the Department to initiate fresh proceedings in accordance with law against the legal representatives, thereby keeping the merits of the case open.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has sought for setting aside of the notices under Section 148A(b) of the Income Tax Act, 1961 (for short ‘the Act’) dated 09.03.2024 and 18.03.2024 at Annexures-B and C respectively. The petitioner has also called in question the validity of the consequential proceedings including the assessment order as well as the orders of penalty.
2. It is the case of the petitioner that the notice under 148A(b) was issued in the name of Ramakrishnappa who is the father of the petitioner and the first of such notices was issued on 09.03.2024 at Annexure-B, followed by further notice on 18.03.2024 at Annexure-C. It is however submitted that the petitioner’s father Late Ramakrishnappa, to whom notice was issued, passed away on 20.10.2023 and accordingly, notice to the dead person being void, all further proceedings pursuant to the notice under Section 148A(b) are non-est and required to be set aside.
3. Perused the certificate at Annexure-A. In light of the uncontroverted fact regarding the date of death of Ramakrishnappa being on 20.10.2023, the proceedings by way of notices at Annexures-B and C and the subsequent proceedings being conducted against a dead person is void in the eye of law and accordingly, petition is required to be allowed.
4. In light of the facts made out, the notices at Annexures-B and C and subsequent proceedings as culminated in Annexures-D, H, J, K, L and M are set aside. Liberty is reserved to the respondents to initiate proceedings regarding the subject matter of the notice under Section 148A(b) of the Act, as is permissible in law. All contentions on merits are kept open.
Accordingly, petition is disposed of.
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Readers should treat this as a tax and compliance update, not as personal advice.
This article is for general information based on available source information. It should not be considered legal, tax, investment, or financial advice.