Reassessment Notices on Deceased Assessees Under Section 148A Declared Invalid: Rajasthan High Court’s View and Scope for Fresh Proceedings

Introduction

The Rajasthan High Court in Meena V Kumar Vs PCIT examined whether reassessment proceedings initiated under Section 148A of the Income Tax Act 1961 remain valid when the initial notice under Section 148A(b) is issued in the name of a person who had already died. The Court also considered whether the Income Tax Department could subsequently restart proceedings against the legal heirs, and how limitation would apply in such a scenario.

This decision reaffirms the legal position that any notice or reassessment proceeding initiated against a deceased assessee is void in law. At the same time, the Court preserved the Department’s right to initiate fresh proceedings against legal representatives under Section 159, subject to limitation and specific exclusion of time spent in writ proceedings.

Brief Background of the Dispute

The High Court was called upon to resolve a narrow but important question:

Whether reassessment proceedings commenced under Section 148A, by issuance of notice under Section 148A(b) and culminating in an order under Section 148A(d), are legally sustainable when the very initiation is based on a notice addressed to a deceased person.

The controversy arose because:

  • Notice under Section 148A(b) was issued in the name of an assessee who had already passed away.
  • An order under Section 148A(d) was later passed, relying upon such notice.
  • The legal heir approached the Rajasthan High Court challenging the validity of the entire reassessment process.

Earlier Rajasthan High Court Precedents Relied Upon

Reference to Prior Division Bench Judgments

Both sides brought to the Court’s attention two earlier Division Bench decisions of the Rajasthan High Court, which directly addressed similar issues:

  1. Order dated 27.05.2022 in
    Shri Radha Mohan Khandelwal Vs. Assistant Commissioner of Income Tax
    [D.B Civil Writ Petition No. 7896/2022]

  2. Order dated 27.02.2024 in
    Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income Tax Officers & Ors.
    [D.B. Civil Writ Petition No. 9985/2023]

After examining these earlier pronouncements, the Court concluded that the legal question was already settled and no longer open to debate.

Principle Emerged From Earlier Decisions

From these decisions, the following legal propositions were treated as settled:

  • A notice issued under the reassessment machinery of the Income Tax Act 1961 against a person who is no longer alive is a fundamental legal defect.
  • Any such notice, and all subsequent steps or proceedings founded upon it, are a nullity in the eyes of law.
  • However, where the original notice had been issued within the prescribed limitation period, the Department could be permitted to initiate fresh proceedings against legal representatives in accordance with Section 159.

In particular, in Legal Heirs of Smt. Sneh Lata Bhandari Vs. Income Tax Officers & Ors., the Division Bench had:

  • Declared the notice against the deceased invalid.
  • Allowed the Department liberty to reinitiate proceedings under Section 148A(b) read with Section 159.
  • Directed that the period between filing of the writ petition and its disposal would be excluded for the purpose of computing limitation for fresh action.

Court’s Analysis in Meena V Kumar Vs PCIT

1.