RENU SHARMA LEGAL HEIR OF MANOJ KUMAR SHARMA,MUMBAI vs. ACIT (11)(1)(1), MUMBAI

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ITA 436/MUM/2026Status: DisposedITAT Mumbai18 September 202610 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that issuing a notice under Section 148 in the name of a deceased person, after being made aware of the death, is void ab initio. Such a fundamental error cannot be cured by Section 292B of the Income Tax Act.

What were the facts?

The Assessing Officer issued a notice under Section 148 in the name of a deceased assessee. Despite the legal heir objecting and providing a death certificate, the Assessing Officer proceeded with the assessment. The legal heir's objections were dismissed, and an assessment order was passed.

What were the issues?

Whether assessment proceedings initiated by issuing a notice under Section 148 in the name of a deceased assessee, after the legal heir informed the AO of the death, are valid in law.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 143(3),Section 159(2)(b),Section 292B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH; MUMBAI

Hearing: 25.06.2026Pronounced: 18.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH; MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER ITA No. 436/Mum/2026 (Assessment Year: 2011-12)

Renu Sharma Legal Heir of ACIT (11)(1)(1) Manoj Kumar Sharma Aayakar Bhavan, M. K. Road, 23/104, Akash Co-op Housing vs. Mumbai, Maharashtra, 400020. Society, Oshiwara, Mumbai, Maharashtra, 400053.

PAN: AAHPK0557H (Appellant) (Respondent) For Assessee : Shri Ajay R. Singh & Akshay Pawar Adv. For Revenue : Shri Vinod Kumar V. , Sr.DR Date of Hearing : 25.06.2026 Date of Pronouncement : 18.09.2026 O R D E R PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 25.11.2025, pertaining to Assessment Year (AY) 2011-12, wherein the Assessee has taken the following grounds of appeal:

“On the facts and in the circumstances of the case and under law, Hon. Commissioner of Income Tax (Appeals) – NFAC, Income Tax Department, Delhi 1. erred in confirming the order of the Assessing Officer and not granting relief as claimed by the Appellant;

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma 2. erred in confirming an order in name of a deceased person as valid 2.i. failed to appreciate that entire proceedings beginning from recorded reasons for reopening, administrative approval from Pr. CIT-11, notice u/s. 148 dated 28.03.2018, notice u/s. 142(1) dated 23.11.2018 and show cause notice u/s. 144 dated 29.11.2018 were all in the name and PAN of a deceased person Mr. Manoj Kumar Sharma who expired on 03.03.2014. Thus entire proceeding was bad in law and void ab initio, thus resulting assessment order is also bad in law and needs to be struck down. 2.ii. Assessment order passed u/s. 143 without issuing notice u/s. 143(2) is bad in law. 3. erred in interpreting and relying on judgement of Hon’ble. Madras High court in the case of Gowthaman S. [TS-1485-HC-2025(MAD)] WP No. 39793 of 2025 order dated 27.10.2025 and failed to appreciate that facts of your appellant case and in the cited case are different and not applicable to your appellant. 4. The Appellant craves, to consider each of the above grounds of appeal without prejudice to each other and craves leave to add, alter, delete or modify all or any of the above grounds of appeal.” 2. Briefly the facts of the case are that a notice under section 148 was issued in the name of Manoj Kumar Sharma on 28.03.2018 stating that he has undertaken various transactions in terms of sale and purchase of immovable property, premium paid for insurance policies and remittances made to UAE, and said transactions and its sources require investigation and verification in absence of any return of income filed by the assessee and reasons were recorded stating that the income of the assessee has escaped assessment owing to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. In response, the wife of the assessee, Smt. Renu Manoj Sharma submitted vide her letter dated 9.04.2018 that her husband had expired on 03.03.2014 (copy of death certificate was furnished) and objected against reopening and requested to drop the proceedings initiated under section 147 in the name of deceased assessee. In response, the Assessing Officer vide communication dated 12.10.2018 stated that the assessment proceedings will proceed and the legal heir will be responsible for the necessary compliance. Thereafter, objections

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma were again raised by the wife of the deceased assessee vide letter dated 19.10.2018 and which were disposed off by the Assessing Officer vide order dated 30.10.2018, stating that the objections so taken are not valid and cannot be accepted. As per Assessing officer, when the department was made aware of death of the assessee, the assessment was carried forward in name of legal heir of the assessee and subsequently, the assessee’s legal heir was also served with a copy of the reasons for reopening the assessment and it was intimated to her that the proceedings would now be carried forward with the legal heir of the assessee. It was accordingly held that when the department was made aware of the death of the assessee, the proceedings were carried forward with the legal heir of the assessee and objections were disposed off. Thereafter, notices under section 142(1) were issued asking to file the return of income, however, there was no return of income filed in response to notice under section 148 and thereafter, the Assessing Officer proceeded and passed the order under section 143(3) read with 147 vide order dated 21.12.2018, wherein an amount of Rs. 9,16,040/- was brought to tax as income under the head “capital gains” and an amount of Rs. 2,30,01,963/- was brought to tax as unexplained credit in the bank account maintained by the assessee and the assessed income was determined at Rs. 2,39,18,000/-.

3.

Against the said order, the legal heir of the assessee carried the matter in appeal before the ld. CIT(A), who has sustained the order and the findings of the Assessing Officer. Against the said order, the legal heir of the assessee is in appeal before us.

4.

During the course of hearing, the ld. AR submitted that it is a case where the assessee had expired on 03.03.2014, well before the issuance of notice under section 148 dated 28.03.2018, and in spite of the fact that the legal heir of the assessee, Smt. Renu Manoj Sharma, had

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma objected to the issuance of notice in the name of the deceased husband, the Assessing Officer has proceeded and gone ahead and passed the assessment order under section 147 read with 148 of the Act. It was submitted that it is a settled legal position that issuance of notice in the name of the deceased assessee is non-est in the eyes of law and various Courts and the Tribunals have taken a consistent view in the matter. In this regard, our reference was drawn to the decision of the Hon'ble Bombay High Court in case of Sumit Balkrishna Gupta vs. Assistant Commissioner of Income-tax, Circle 16(2), Mumbai [2019] 103 taxmann.com 188 (Bombay) [15-02-2019], which has been followed by the Hon'ble Bombay High Court in its subsequent decision in case of Neena Jatin Shah vs. Income-tax Officer [2025] 179 taxmann.com 498 (Bombay) [30-09-2025] which has further been followed by the Hon'ble Delhi High Court in case of Savita Kapila vs. Assistant Commissioner of Income-tax, Circle 4(1) [2020] 118 taxmann.com 46 (Delhi)[16-07-2020].

5.

It was submitted that it would be relevant to refer to the sequence of events which have a bearing on the matter under consideration. In this regard, our reference was drawn to the notice under section 148 issued on 28.03.2018. It was submitted that thereafter, in response to the said notice, the wife of the deceased assessee vide her letter dated 09.04.2018 addressed to the Assessing Officer submitted that the said notice was served on her by post on 02.04.2018 and further, she has submitted that the assessee had expired on 03.03.2014 and a copy of his death certificate was also submitted and it was stated that the notice has therefore been issued in the name of a deceased person and accordingly, a request was made to drop the proceedings initiated in the name of deceased person under section 148 of the Act. It was submitted that thereafter, a letter was received from the Assessing Officer dated 12.10.2018 providing copy of the reasons to the wife of the deceased assessee and wherein the Assessing Officer acknowledged the earlier

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma letter dated 09.04.2018 stating that said letter was received on 27.04.2018 and it was stated by the Assessing Officer that the assessment proceedings will proceed as the legal heir will be responsible for the necessary compliance and failure to comply will compel the office to pass order under section 144 and another opportunity was provided to file the return along with the copy of the reasons. It was further submitted that thereafter, the wife of the deceased assessee filed detailed objections vide her letter dated 19.10.2018 and the contents thereof reads as under:

“With reference to above, I would like to bring to your notice that I have received the reasons for re- opening of the case of my husband late Shri Manoj kumar Sharma, addressed as the legal heir of Mr. Manoj Sharma. I understand that the previous notice dated 28.03.2018 for intimating the re-opening of case u/s 147 r.w.s was issued in the name of Shri. Manoj Sharma, a deceased person, to which a reply was filed by me with a request to drop the proceedings. Sir, I would like to state that I am a full time primary school teacher in Smt. Rajarani Malhotra Vidhyalaya (Janseva Mandir trust) and has been teaching there since past 10-12 years. All the financial transaction and dealings of whatsoever nature were looked after by my husband and I was nowhere involved or informed about the same. Still, to the best of my knowledge and information I am aware, in regards to the above notice stating the reasons for re-opening I would I hereby state as under: Sale of Immovable Property: As regards to transaction of sale of immovable property of Rs.. 34,00,000/-, I would like to state that the said property was in the joint name of me and my husband late Shri. Manojkumar Sharma. As such my share was 50% and my husband's share was also 50% thereof. This was handled by my husband as such I am not aware of full facts, to the best of my knowledge, both of us individually won't be liable to tax in view of agreement to acquire new flat at Dombivili with Lodha Dwellers. I am also not aware the whereabouts of the 50% proceeds received by him, deposited in accounts or any further details. In fact I am also not aware to the basic bank account details that were operated by him or were opened in his name. Apart from the facts and things stated above, I am not aware of any of the transaction that has been reported in the reasons of re-opening may it be I. purchase of property Rs. 60,00,000/- ii. Premium paid Rs. 53,00,000/- iii. Remittance to UAE Rs. 5,62,293/- I would also like to restate that recorded reasons are in the name of my husband late Shri Manoj Sharma. Notice issued u/s 147 r.w.s 148 was

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma also issued dated 28.03.2018 was also issued in his names my husband expired on 03.03.2014. I once gain enclose copy of death certificate for your kind perusal. Based on the above discussion and in the light of facts and circumstances of the case and settled legal position, I most humbly submit that the notice as well as the proceedings Initiated u/s. 147 of the Act is invalid, illegal and bad in law and as such humbly request you kindly to drop the same and oblige.” 6. It was further submitted that the wife of the deceased assessee has objected to the reopening of the assessment and issuance of notice in the name of deceased assessee not once, but twice in writing, and in spite of that, the Assessing Officer has proceeded and passed the assessment order. It was submitted that even in the reasons disposing off the objections vide order dated 30.10.2018, the Assessing Officer has acknowledged the fact that department was made aware of the death of the assessee and in spite of that, the proceedings were continued without issuing notice in the name of the legal heir of the assessee.

7.

Further, it was submitted that the ld. CIT(A) has also not appreciated the legal proposition so submitted by the assessee and has relied on the decision of the Hon'ble Madras High Court in case of Gowthaman S vs ITO [2025] 180 taxmann.com 426 (Mad), holding that the facts of the said case are similar to the present case in appeal and it was held that the legal heir of the deceased assessee, Smt. Renu Sharma did not apprise the department about the occurrence of death. As a result, notice under section 148 was issued in the name of deceased assessee. However, in response to the notice when the wife of the deceased assessee made aware the department about death of the assessee, the reasons for reopening were served on her and she was intimated that the assessment proceedings shall henceforth be carried out in the name of the legal heir as per law. Further, adequate opportunity of hearing was accorded to her by the Assessing Officer and finally the assessment order was passed in the name of the legal heir and not in the name of the deceased assessee.

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma In view of the same, the contentions so taken were dismissed by the ld CIT(A).

8.

It was submitted that the decision relied upon by the ld CIT(A) was rendered by the ld. Single Judge Bench of the Hon’ble Madras High Court and later on, on appeal before the Division Bench, the said order passed by the ld. Single Judge Bench was set aside by the Division Bench as reported in Gowthaman S vs ITO [2026] 186 taxmann.com 1125 (Mad) and it was held that the Department cannot issue notice to a dead person and the consequential proceedings were set-aside. Further, it was held that the proceedings under section 159 can be invoked only if the proceedings have already been initiated when the assessee was alive and continuation of the proceedings against the legal heir was permitted. However, in the case in hand, the proceedings have been initiated after the demise of the assessee. It was submitted that in the said decision passed by the Division Bench of the Hon'ble Madras High Court, reliance was placed on the decision of Hon'ble Bombay High Court in case of Sumit Balakrishna Gupta vs ACIT 414 ITR 292, wherein it was held that the requirement of issuing notice to a correct person and not to a dead person is not merely a procedural requirement, but is a condition precedent to the notice being valid in law and where such a notice is issued in the name of a dead person, the same is neither protected by the provisions of Section 292B or 292BB of the Act.

9.

Further, reliance was placed on the decision of Hon'ble Madras High Court in case of Alamelu Veerappan vs. ITO, (2018) 257 Taxman 72 (Mad), Hon'ble Gujarat High Court in case of Chandreshbhai Jayantibhai Patel vs. ITO, (2019) 413 ITR 276, decision of Hon'ble Bombay High Court in case of Rupa Shyamsundar Dhumarker vs. ACIT in Writ Petition No. 404 of 2019, dated 05.04.2019 and the latest decision of Hon'ble Bombay

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma High Court in case of Prakash Tatoba Toraskar vs. ITO, (2023) 452 ITR 59 (Bom).

10.

The ld. DR has been heard, who has relied upon the order passed by the Assessing Officer. It was submitted that admittedly, the notice was issued in the name of the deceased assessee. However, subsequently when the wife of the deceased assessee brought the said fact to the notice of the Assessing Officer, the Assessing Officer informed the wife of the deceased assessee that the proceedings shall continue in the name of the legal heir, and thereafter, the reasons for reopening were served on the legal heir of the deceased assessee, and thereafter in response to the detailed objections which the ld. AR has referred, the Assessing Officer passed an order disposing off the said objections wherein the said fact was reiterated and it was submitted that thereafter, the assessment order was passed in the name of the legal heir of the deceased assessee, and therefore there is no infirmity in the order so passed by the Assessing Officer.

11.

We have heard the rival contentions and perused the material available on record including various authorities quoted at the Bar. We find that it is a case where the legal heir on receipt of notice u/s 148 objected to such proceedings and didn’t submit to the jurisdiction of the Assessing officer and it was informed to the Assessing officer that the assessee had expired, his death certificate was placed on record and it was requested to drop the reassessment proceedings initiated in name of the deceased assessee. From perusal of the death certificate placed on record, it is noted that Shri Manoj Kumar Sharma expired on 03/03/2014 and the impugned notice u/s 148 was issued on 28/03/2018 in the name of the said deceased assessee and inspite of the objections so raised by the legal heir and not submitting to the jurisdiction of the AO, the reassessment proceedings were continued in the name of the deceased assessee and no fresh notice has been issued

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma in name of the legal heir and finally, the reassessment order has been passed in the name of the legal heir of the deceased assessee.

12.

It is not even a case where the notice has been issued during the lifetime of the assessee and the assessee has expired subsequently, and one can argue taking shelter of section 159(2)(a) that such proceedings taken against the deceased assessee shall be deemed to have been taken against the legal representative and can continue in all form and intent from the stage at which it stood on the date of death of the deceased assessee. It is a case where the notice has been issued subsequent to the death of the deceased assessee and in terms of section 159(2)(b), such proceedings can only be taken against the legal representative. In such a situation, the notice has to be necessarily issued in the name of the legal representative or the legal heir of the deceased assessee and not in the name of the deceased assessee and where the same is not complied with, the same cannot be read and understood in substance and effect in conformity with or according to the intent and purposes of the Act and section 292B again cannot come to the aid and rescue of the Revenue.

13.

The Courts and the Tribunal have consistently held that the issue of notice u/s 148 in the name of the correct and that too, a living person is a foundational requirement and not merely a procedural requirement but a condition precedent to the notice being valid in law and provisions of section 292B cannot be invoked to correct a foundational/substantial error and various decisions cited at the Bar and in particular, the decisions of the Hon’ble Bombay High Court supports the case of the assessee.

14.

The decision of the ld single judge of the Hon’ble Madras High Court in case of Gowthaman S. (supra) was set-aside by the Division Bench of the Hon’ble Madras High Court in case of Gowthaman S (supra) following the decision of the Hon’ble Bombay High Court in case of Sumit

ITA No. 436/Mum/2026; A.Y. 2011-12 Renu Sharma Legal Heir of Manoj Kumar Sharma Balkrishna Gupta (supra) and therefore, the said decision doesn’t support the case of the Revenue.

15.

In light of the aforesaid discussions and considering the entirety of facts and circumstances of the case, we hereby set-aside the notice u/s 148 issued in the name of the deceased assessee and consequent reassessment order passed u/s 147 r/w 143(3) of the Act is also set- aside.

16.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the Open Court on 18.09.2026

Sd/- Sd/- SIDDHARTHA NAUTIYAL VIKRAM SINGH YADAV (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)

Mumbai, Dated: 18.09.2026 Karishma J. Pawar, SR. PS

Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file

By Order

Dy./Asst. Registrar I.T.A.T, Mumbai

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