Assessment Order Passed Against Dead Person Is Nullity: Karnataka High Court
The Karnataka High Court, while quashing the assessment order, held that the assessment order under Section 147 read with Section 144 of the Income Tax Act amounts to nullity.The bench of Justice S. Sunil Dutt Yadav has observed that when the assessee dies during the pendency of the proceedings, proceedings are to be continued through the legal representatives of the deceased. The...
The Karnataka High Court, while quashing the assessment order, held that the assessment order under Section 147 read with Section 144 of the Income Tax Act amounts to nullity.
The bench of Justice S. Sunil Dutt Yadav has observed that when the assessee dies during the pendency of the proceedings, proceedings are to be continued through the legal representatives of the deceased.
The legal representative of the deceased assessee has questioned the validity of the assessment order passed under Section 147 read with Section 144 of the Income Tax Act, 1961, the validity of the computation sheet, and the validity of the penalty order. The petitioner also sought direction for the de-freezing of accounts as a consequential relief.
The assessee died on May 21, 2022. As of the date of the issuance of notice, the petitioner was alive, and it was during the proceedings for assessment that, subsequent to the notice issued under Section 148 of the Act, the petitioner passed away on May 21, 2022. The assessment order was passed against a dead person.
Section 159(2)(a) of the Income Tax Act prescribes the procedure when the assessee dies during the pendency of the proceedings. Section 159(2)(a) states that for the purpose of making an assessment of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative, any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased.
The court, while declaring the assessment order nullity, noted that the assessment order was passed after the death of the assessee and without involving the legal representative of the deceased as a party.
The court allowed the appeal and quashed the order freezing the bank account.
The court remitted the matter back to the stage post for the notice issued under Section 148 of the Income Tax Act.
Counsel For Appellant: Sandeepani Neglur
Counsel For Respondent: Dilip M.
Case Title: Smt. Sowmya S. Versus ITO
Case No.: Writ Petition No. 25728 Of 2023 (T-IT)