Ahmedabad: In a case that sounds stranger than fiction, Gujarat High Court has quashed income tax department’s attempt to reopen the assessment of a woman who died five years before a demand notice landed in her name.The case involves Padmaben Trivedi from Bhimpore village in Nani Daman, who sold 13,626 sq m of her land to a company for Rs 92.6 lakh in 2009. A registered valuer pegged the fair market value by concluding that the rate was Rs 81/sq m in 1981 and the land was valued at Rs 11.03 lakh then. A year later, when Trivedi filed her I-T return for 2010-11, she showed Rs 22.94 lakh as long term capital gains from the land sale. She passed away in May 2012.Five years later, on March 30, 2017, the I-T department issued the assessment reopening notice to Trivedi under Section 148 of I-T Act. It was the last day of the limitation period for reopening for the returns filed in 2010-11. The department contended that the 1981 value was overstated. Relying on a 1982 sale instance obtained from the sub-registrar’s office, the assessing officer reverse-indexed the figure and computed an implied 1981 rate of about Re 1/ sq m, claiming the long-term capital gains from the deal to be Rs 69.6 lakh.In July 2017, Trivedi’s kin replied to the assessment reopening notice and requested the I-T department to consider her original return of income. The same year, Trivedi’s family moved HC questioning the validity of such reopening notice to a dead person. It also argued that notice was based on a legal provision that did not apply to pre-2012 assessments.A division bench of Justice A S Supehia and Justice V D Nanavati agreed with the petitioner’s contention and held that the department had wrongly invoked Section 55A.The court observed: “In the present case, it is not in dispute that the deceased assessee had disclosed the fair market value of the land at a higher rate of Rs 81, whereas the assessing officer in converse has determined the fair market value at Re 1. Hence, the provisions of Section 55A(a) of the act will not apply nor the provisions of sub-clause (b) of Section 55A of the act will get attracted since the fair market value of the land has been determined on the basis of the registered valuer report dated Nov 11, 2009, which is less than the value assessed by the assessing officer.”However, the high court avoided ruling on the more unusual question of whether tax proceedings can continue against a dead person if family members respond to the notice.It clarified: “As far as the issue of notice having been issued to a dead person, and the effect of responding to the notice by the petitioner, whether can be said to be participation in the proceedings is not delved by this court, and is left open.”
