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Facts
The Assessing Officer made an addition for unexplained cash credit after initiating reassessment proceedings. The assessee, an individual, expired before the assessment order. The Assessing Officer issued a notice u/s 143(2) in the name of the deceased assessee, despite being informed of the death.
Held
The Tribunal held that a notice u/s 143(2) is jurisdictional. Issuing such a notice in the name of a deceased assessee, after being informed of the death, renders the subsequent proceedings void-ab-initio and without jurisdiction.
Key Issues
Whether the assessment proceedings are valid when the notice u/s 143(2) was issued in the name of a deceased assessee after intimation of death was provided to the AO.
Sections Cited
143(3), 147, 68, 250, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 26.12.2017, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2015-16.
Mr. Ashwinkmar Krishnala Thanawala 2. Despite of issuing notice to the Assessee, the Assessee neither appeared nor filed any adjournment application and thus, this court is constrained to decide this appeal, on the basis of material available on record and hearing the Ld. DR.
In this case, the Assessing Officer vide assessment order 26.12.2017 u/s. 143 (3) r.w.s. 147 of the Act has made the addition of Rs.25,85,009/- being unexplained cash credit u/s. 68 of the Act, on account of sale receipt of share transaction.
The Assessee being aggrieved against the aforesaid addition filed first appeal before the Ld. Commissioner, who by considering the peculiar facts and circumstances of the case, observed as under: i. Assessee was an individual and expired on 28.08.2016 ii. During the year under consideration Assessee’s son filed return of income on behalf of assessee on 30.03.2017 declaring total income of Rs.1,58,073/-. iii. For the AY 2015-16 the Assessing Officer issued notice under section 143(2) dated 31.07.2017, in the name of deceased Assessee. In response to this notice, Assessee’s son Shri Ketan Thanawala replied vide letter dated 29.09.2017, and again informed about the death of the Assessee. It is pertinent to note that the Assessee’s son had earlier intimated about the death of the appellant vide e-mail dated 1.10.2016 despite prior knowledge about appellant’s death, notice u/s 143(2) of the Act was issued in the name of deceased Assessee late, Mr Ashwin Kumar, Thanawala.
The Ld. Commissioner further observed that perusal of facts on record revealed that the notice u/s. 143(2) dated 31.07.2017 was issued in the name of the deceased Assessee, after his demise on 28.08.2016, despite the fact that intimation was given to the AO by the deceased’s son, vide his e-mail dated 1.10.2016 and subsequent letter dated 29.09.2017, copy of which are reproduced hereunder: -
The Ld. Commissioner further observed that, the AO was fully aware that the proceedings under section 143(3) r.w.s. 147 had been initiated in the name of deceased Assessee and could not be continued, as such after his demise, it was incumbent upon the AO to ascertain the legal heirs/legal representatives of the deceased person and a fresh notice u/s. 143 (2) ought to have been issued within the prescribed time limits, on the legal heir(s) of the deceased Assessee, to validly continue with the reassessment proceedings. However, the AO had not issued any such notice under section 143 (2) on the legal heir(s) and had concluded the reassessment proceedings under section 143 (3) r.w.s. 147 of the Act.
The Ld. Commissioner further observed that the Hon’ble Courts in the decisions cited (supra) have held that a notice u/s. 143 (2) of the Act is a jurisdictional notice and existence of a valid notice u/s. 143 (2) is a condition precedent for exercise of jurisdiction by the Assessing Officer to assess u/s. 143 (3) of the Act. The want of a valid notice, affects the jurisdiction of the Assessing Officer to proceed with the assessment and thus affects the validity of the proceedings for assessment.
The Ld. Commissioner therefore, on the aforesaid reasons allowed the appeal of the Assessee, filed against the addition and passing the assessment order, without assuming valid jurisdiction over the legal heir(s).
Heard the parties and perused the material available on record. The Ld. DR at the outset has submitted that the Assesse has not filed any death certificate of the deceased Assessee before the Assessing Officer and therefore, the Assessing Officer rightly exercised the jurisdiction and proceeded with the case of the assessment, against the legal heir(s) and ultimately passed the order against the legal heir(s) only, as it appears from the caption of the assessment order.
This Court has given thoughtful consideration to the peculiar facts and circumstances of the case. Though, the Ld. DR argued that the legal heir(s) of the Assessee was supposed to file death certificate to the Assessing Officer, however, they failed to file the same, whereas it is a fact that according to the relevant provisions of law, the intimation if given to the Assessing Officer qua death of the Assessee, would sub-serve the purpose and it is therefore, upon the Assessing Officer to make exercise in accordance with law, as prescribed in the Act, which in the instant case, the Assessing Officer failed to exercise.
It is an admitted fact that notice u/s. 143 (2) is a jurisdictional and cannot be dispensed with and in the instant case despite of having knowledge about the death of the Assessee as intimated by Assessee’s son to the Assessing Officer, the Assessing Officer still issued the notice dated 31.07.2017under Section 143(2) of the Act in the name of deceased Assessee, after his demise on 28.08.2016 and therefore the same lacks the jurisdiction. Admittedly, no further notice u/s 143(2) was issued to the legal heir(s) of the Assessee and thus the jurisdiction exercised by the Mr. Ashwinkmar Krishnala Thanawala Assessing Officer over the legal heir(s) of the Assessee would be void-ab-initio and hence makes the assessment order as non- maintainable and nullity and therefore, in the considered opinion of this Court, has rightly been annulled by the Ld. Commissioner in the impugned order.
The Hon’ble High Court of Bombay in the case of Geeta Vs. Principal Commissioner of Income Tax (2024) 166 Taxmann.com 369 (Bombay) has also dealt with an identical issue, wherein first notice for reopening of the assessment was issued in the name of a dead person and therefore, the Hon’ble High Court held that the impugned notice was to be quashed and set aside, having been issued to a dead person.
Thus, in the aforesaid facts and circumstances and determination made by the Ld. Commissioner, the appeal filed by the Revenue Department, is liable to be dismissed.
In the result, appeal filed by the Revenue Department stands dismissed. Order pronounced in the open court on 28.11.2025.