ITO 19(2)(4) MUMBAI, MUMBAI vs. EXECUTOR TO THE ESTATE OF LATE S M SHETH, MUMBAI

Briefly, the facts of the case are that the assessment order in the name of the deceased assesse, Seventilal M Sheth was passed u/s. 144 read with section 147 of the Act on 20/12/2018, wherein the ld. Assessing Officer has determined the assessed income at Rs. 644,15,373/-. As per the assessment order, the assessee did not file his return of income originally. Subsequently,

Subsequently, the executor to the Estate of Late S. M.Sheth filed an appeal on 01.02.2019 before the ld CIT(A), against the order and the findings of the Assessing Officer, wherein the jurisdictional conditions for invocation of provisions of section 147 And the notices and the consequential proceedings including the reassessment order were challenged as being illegal and invalid and it was contended that the notice issued u/s. 148 is bad in law as it has been issued in the name of the deceased assessee in spite of the fact that the Assessing Officer was well aware of the death of the assessee as evident from the written communication and acknowledgment thereof by the Assessing officer and death certificate of deceased assesse already placed on record.

The ld. CIT(A) in the impugned order noted that the assessee, Shri Sevantilal M. Sheth had expired on 23.11.2010. Thereafter, the legal heir approached the jurisdictional Assessing Officer and other authorities about her failure to file return of income on behalf of the deceased assessee. Therefore, it was in the notice of the department that the assessee is no more and in spite of that the Assessing Officer issued notice u/s. 148 on

Against the said order and the findings of the ld CIT(A), the Revenue is in appeal before us.

During the course of hearing, the ld. DR submitted that the ld. CIT(A) erred in not appreciating that in terms of Section 292B of the Act, no return of income, assessment, notice, summons or other proceeding shall be deemed invalid merely by reason of any mistake, defect or omission, where such proceedings are in substance and affect in conformity with or according to the intent and purposes of the Act. It was accordingly submitted that the ld. CIT(A) was not justified in setting aside the assessment order and deleting the addition without considering the

In his submissions, the ld. AR taken us through the sequence of events. It was submitted that Shri Sevantilal M. Seth expired on 23.11.2010 and a copy of his death certificate has been placed on record. It was submitted that for the purposes of filing of the e-return of income for the impugned assessment year 2011-12, as per the procedure prescribed by the Income Tax Department, the legal heir has to get a DSC in his or her own name, that the legal heir is required to make a request by sending a mail to efiling.administrator@incometaxindia.gov.in, mentioning the name, PAN, date of birth of the deceased as well as that of the legal heir along with the scanned copy of the death certificate of the deceased and thereafter, on receipt of the above, the legal heir would be enabled by the department to file the return of deceased assessee using legal heir DSC. It was submitted that in compliance with the said provisions, the legal heir made a request by sending a mail to efiling.administrator@incometaxindia.gov.in, dated 28.09.2011 and thereafter on 29.11.2011, wherein the prescribed particulars of the late assessee as well as the legal heir have been duly submitted along with the copy of the death certificate and these communications are placed at page nos. 2 and 3 of the assessee’s paper book. It was submitted that given that there was no response from the

It was submitted that separately, the legal heir applied for and received the new PAN card bearing PAN No. AAABE0401F in the name of the Executer to the Estate of Late S. M. Sheth on 03.04.2012 and thereafter, the returns for subsequent assessment years right from assessment year 2013-14 to 2018-19 have been duly filed by the Executor to the Estate of Late S. M. Sheth using the new PAN number so allotted by the department and in

It was submitted that the Assessing Officer was well aware of the death of the assessee and in spite of the fact that a new PAN number in the name of the Executor to the Estate of the Late S. M. Sheth has been allotted and issued by the department and there have been subsequent tax filings which have been done by the legal heir under the new PAN so allotted, the notice u/s. 148 was issued by ACIT Circle 17(3), Mumbai in the name of the deceased assessee and that too, under the earlier PAN number.

It was further submitted that though the assessment order is silent about this fact, the legal heir did respond to the notice u/s 148 of the Act vide her written communication dated 27/04/2018 addressed to ACIT Circle 17(3), Mumbai and submitted on the same date and our reference to drawn to the said written communication available at assessee’s paperbook page 13 which is addressed to ACIT Circle 17(3), Mumbai and signed by Mrs Purnima S. Sheth, Executrix to the Estate of Late S M Sheth. It was submitted that on perusal of the contents of the said communication, it can be noted that the Assessing officer was again informed that the assessee has since expired and she is writing as Executrix to the Estate of Late S M Sheth whereby she has stated that the notice dated 22/03/2018 issued u/s 148 of the Act has been served on her on 23/03/2018 and copy of the reasons recorded prior to reopening were sought to make further submissions in the matter. However, the reasons were never supplied to the assessee, the case

It was submitted that for assessment year 2006-07, the notice u/s 148 was issued in the name of the deceased assessee and on appeal, the ld CIT(A) vide his order dated 22/04/2016 has quashed the notice and consequent reassessment proceedings holding that where the notice has been issued in the name of the deceased assessee even where the AO was made aware of his demise, the same cannot be sustained and was held as bad in law. It was submitted that Revenue has not filed any appeal against the said order and therefore, the same has become final. In such a situation, where the Revenue has accepted the position in one assessment year, the Revenue cannot be take a different position in the impugned assessment year.

It was submitted that it is a settled position that the notice in the name of the deceased assessee and consequent assessment order is non-est in the eyes of law and the same being a consistent and accepted position by the various Benches of the Tribunal and even by the various High Courts of the country. 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]. It was submitted that similar view

It was further submitted that in these decisions, the Hon'ble High Courts have clearly held that where the notices have been issued in the name of the deceased assessee, the same cannot be protected by the provisions of Section 292B/292BB of the Act. Therefore, the contentions raised by the ld. DR that the ld. CIT(A) has erred in not appreciating the provisions of Section 292B have been duly addressed in the said decisions and the contentions therefore cannot be accepted. Further, regarding the decision of Hon'ble Supreme Court in case of Maruti Suzuki India Ltd. (supra), it was submitted that though the said decision is in the context of a legal entity which has been amalgamated, however, the ratio laid down therein equally applies in the facts of the present case as in that case, despite the fact that the Assessing Officer was informed of the amalgamating company have been ceased to exist as a result of approved scheme of amalgamation, the notice was issued in its name which was held to be null and void by the Hon'ble Supreme Court. It was submitted that in the instant case as well, the Assessing Officer was well aware of the death of the assessee and inspite of that, the notices have been issued in the name of the deceased assessee.

It was accordingly submitted that there is no infirmity in the order and the findings of the ld. CIT(A) who has rightly followed the decision of the Hon'ble Supreme Court and has quashed the notice and the proceedings so initiated by the Assessing Officer and the consequent order so passed u/s. 147 read with Section 144 of the Act.

From perusal of the death certificate placed on record, it is noted that Shri Sevantilal M. Sheth expired on 23/11/2010 and the impugned notice u/s 148 was issued on 20/12/2018 in the name of the said deceased assessee. During the interim period, we find that there are email communications dated 30/09/2011 exchanged between the legal heir and the jurisdictional Assessing officer, Assistant Commissioner of Income Tax, Ward 13(2) where the Assessing officer has been informed about the death of Shri Sevantilal M. Sheth and which has been acknowledged by him. The legal heir has subsequently applied for and has been allotted new PAN in name of the Estate of the Late S.M Sheth on 3/04/2012 and thereafter, there are tax filings in name of the Estate of the Late S.M Sheth for assessment year 2013-14 onwards right upto assessment year 2018-19 and

One could therefore visualize the situation where the assessee has expired, the legal heir has taken all possible steps to inform the Revenue department about the death of the assessee and has come forward to ensure necessary tax compliances, however, due to change of jurisdiction from one Assessing officer to another, lack of smooth transition of information/documentation available on record and possibly on account of non-cancellation of earlier PAN issued in the name of the deceased assessee which continue to be valid and active inspite of fresh PAN being issued in the name of the Estate of the deceased assessee, the Assessing officer has issued the impugned notice u/s 148 in the name of the deceased assessee and passed the reassessment order u/s 147 r/w 144 of the Act.

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.

In the result, the appeal filed by the Revenue is dismissed.