Supreme Court Declines to Interfere with Gujarat High Court Order Quashing Section 153C Notice Issued in Name of Deceased Assessee

Case Overview

Case Name: ITO Vs Late Bhupendra Bhikhalal Desai (Since Decd.) Through His Legal Heir Raju Bhupendra Desai (Supreme Court of India)

Appeal Number: Petition(s) for Special Leave to Appeal (C) No(s). 13061/2021

Date of Order: 03/09/2021

Court: Supreme Court of India

Background and Facts of the Case

This matter came before the Supreme Court of India by way of a Special Leave Petition filed by the Income Tax Officer, challenging the Gujarat High Court's decision in the case of Late Bhupendra Bhikhalal Desai (Since Decd.) Through Legal Heir Raju Bhupendra Desai Vs ITO.

The original assessee had filed his income tax return on 6 January 2012 under Section 139 of the Income-tax Act, 1961 for the relevant assessment year. He subsequently passed away — the High Court recorded the date of death as 23 April 2017, though his counsel's submissions referenced 28 April 2017 as the date. Despite this, the Revenue Department issued a notice dated 29 March 2019 under Section 153C of the Income-tax Act, 1961 — addressed in the name of the deceased assessee rather than his legal heir.

Following receipt of the notice, the deceased's son, Raju Bhupendra Desai, communicated to the Department that his father had already passed away and formally requested that the proceedings be discontinued. The Department, however, rejected this objection. In doing so, it placed reliance on several provisions including Sections 124(3)(c), 139A(5)(d), 140, 153C, and 2(31) of the Income-tax Act, 1961, and argued that the legal heir had neither previously notified the Department of the death nor surrendered the deceased's PAN card.

Gujarat High Court's Analysis and Findings

The Gujarat High Court was called upon to examine a central legal question: whether proceedings initiated pursuant to a Section 153C notice issued to a dead person could be sustained in law.

Reliance on Precedent

The High Court drew upon its earlier ruling in Chandreshbhai Jayantibhai Patel Vs ITO, applying the legal principle that a notice issued to a deceased assessee cannot be treated as a mere technical irregularity — particularly where the legal representative has not voluntarily submitted to the jurisdiction of the issuing authority.