MARAPPAN BALASUBRAMANIAM (DECEASED), REP BY LEGAL HEIR KAVITHA BALASUBRAMANIAN (WIFE),KARUVALLUR ROAD, COIMBATORE vs. INCOME TAX OFFICER, WARD-1(2), TIRUPPUR, INCOME TAX OFFICE, TIRUPPUR

The assessee is an individual and died on 27.06.2018. The A.O received information that the assessee has deposited huge amount of cash during the demonetization period and accordingly the A.O issued a notice u/s. 148A(b) of the Act and subsequently passed an order u/s.148A(d) of the Act on 05.04.2022. The legal heir of the assessee (the deceased wife) vide letter dated 27.01.2023 informed the A.O about the death of the assessee, and also submitted that she is not aware of the deposit of cash made in the assessee's account. The legal heir further submitted certain other details in response to the notice issued u/s. 142(1) of the Act. After considering the submissions, the A.O passed the order assessing the income of the assessee at Rs.1,19,45,130/-. Aggrieved, the legal heir of the assessee filed further appeal before the CIT(A) reiterating the submissions. The CIT(A) allowed the appeal for statistical purposes by holding that:

The primary contention of the Ld. AR is that the assessment is initiated after the demise of the assessee on 19.03.2022 in the name of the assessee and therefore the subsequent proceedings is invalid. The Ld. AR further submitted that the wife of the assessee has informed the A.O during reassessment proceedings about the death of the assessee vide letter dated 27.01.2023, but the A.O without issuing fresh notice in the name of the legal heir has continued the same proceedings and passed the order in name of dead person. The Ld. AR also submitted that a similar issue arose in assessee's own case for AY 2016-17 and the Coordinate Bench has quashed the assessment order. Accordingly, the Ld. AR submitted that the ratio laid down by the Coordinate Bench is applicable for the year under consideration also and the impugned order of the A.O is liable to be quashed.

We have heard the parties, and perused the material available on record. We notice that an identical issue has arisen in assessee's own case for AY 2016-17 [ITA No.3367/Chny/2025 dated 27.01.2026] where it has been held that:

The Revenue seeks to bring their case under Section 292 of the Act to state that the defect is a curable defect and on that ground, the impugned notice cannot be declared as invalid. 20. The language employed in Section 292 of the Act is categorical and clear. The notice has to be, in substance and effect, in conformity with or according to the intent and purpose of the Act. Undoubtedly, the issue relating to limitation is not a curable defect for the Revenue to invoke Section 292B of the Act. 21. All the above reasons are fully supported by the decision in the case of Vipin Walia. (supra). In that case, the notice dated 27.3.2015 was issued under Section 148 of the Act to the assessee, who died on 14.3.2015. The validity of the said notice was put to challenge. The Income Tax Officer took a stand that since the intimation of death of the assessee on 14.3.2015 was not received by her, the notice was issued on a dead person. However, the fact regarding the death of the assessee could not be disputed by the Department. The Department continued the proceedings under Section 147/148 of the Act and at that stage, the son of the deceased approached the High Court of Delhi. The High Court of Delhi pointed out that what was sought to be done by the Income Tax Officer was to initiate proceedings under Section 147 of the Act against the deceased assessee for the assessment year 2008-09, for which, the limitation for issuance of notice under Section 147/148 of the Act was 31.3.2015 and on 02.7.2015 when the notice was issued, the assessee was already dead and if the Department intended to proceed under Section 147 of the Act, it could have done so prior to 31.3.2015 by issuing the notice to the legal heirs of the deceased and beyond that date, it could not have proceeded in the matter even by issuing notice to the legal representatives of the assessee. The decision in Vipin Walia (supra) fully supports the case of the petitioner herein. 22. The decision in the case of Vipin Walia (supra) was followed in the decision of the High Court of Gujarat in the case of Rasid Lala, (supra) in which, the reassessment proceedings were initiated against the dead person, that too, after a long delay. The Court pointed out that even if the provisions of Section 159 of the Act are attracted, in that case also, the notice was required to be issued against and in the name of the heirs of the deceased assessee and under the said circumstances, Section 159 of the Act shall not be of any assistance to the Revenue.

In the decision of the Delhi High Court in the case of Spice Entertainment Ltd. (supra) one of the questions, which fell for consideration, is as to whether such framing of assessment against a non-existing entity or a dead person could be brought within the ambit of Section 292B of the Act and after referring to the decisions on the point including the decision of the Allahabad High Court in the case of Sri Nath Suresh Chand Ram Naresh v. CIT [2006] 280 ITR 396/145 Taxman 186 it has been held that the provisions of Section 292B of the Act are not applicable and that framing of assessment against a non- existing entity/person goes to the root of the matter, which is not a procedural irregularity, but a jurisdictional defect, as there cannot be any assessment against a dead person. 24. The learned Senior Standing Counsel for the Revenue has sought to distinguish the decision in the case of Spice Entertainment Ltd. (supra) by referring to Sky Light Hospitality LLP. Case (supra) 25. On a perusal of the factual position therein, the Court came to the conclusion that the defect was curable because it was held that the notice was not addressed to the correct name and that the PAN mentioned was also incorrect. The factual background was taken into consideration and the Court held that errors and mistakes cannot and should not nullify the proceedings, which are otherwise valid and that no prejudice had been caused, as this being the mandate of Section 292B of the Act. The decision in the case of Sky Light Hospitality LLP case (supra) is clearly distinguishable on facts and it does not support the case of the Revenue. 26. For all the above reasons, this court holds that the impugned notice is wholly without jurisdiction and cannot be enforced against the petitioner. 27. Accordingly, the writ petition is allowed as prayed for. No costs. Consequently, the connected WMP is closed. 6. The Hon’ble jurisdictional High Court in the case of Rajakumari Vs The Income Tax Act Officer [2023 (11) TMI 541- Madras High Court dated 18.10.2023] held as under: 9. In the present case, the 1st respondent issued notice under Section 148 of the Income Tax Act on 31.03.2022 against the dead person, who is the husband of the petitioner. Upon the receipt of the notice, the petitioner in the capacity as the legal representative participated in the proceeding. Since she participated in the proceeding, the respondents continued the proceedings and passed assessment order in the name of dead person, accordingly initiated penalty proceedings. It is the settled principle of law that no order can be passed against the dead person and the same is non-est in law. 10. The Hon'ble Division Bench of this Court in the case of Commissioner of Income-Tax-VII, Chennai vs.M.Hemanathan reported in [2016] 67 taxmann.com 22 (Madras) has held as follows: “29............ A notice sent to a dead person is actually a nullity. There is only one exception in so far as civil proceedings are concerned, which could be traced to Order XXII Rule 4. Section 159 of the Income Tax Act also carves out an exception. Since service of notice on the legal heir of a dead person falls under the category of an exception to the general rule, the same cannot overtake the rule in the absence of a specific provision.” 11. In the present case, it is admitted that the impugned order was passed in the name of a dead person since the proceedings were initiated subsequent to the death of the original assessee. In terms of the provisions of Section 159(2)(b) of the Income Tax Act, any proceedings of the deceased person, subsequent to death, can be initiated against his legal representative. Though the present case was initiated subsequent to the death of the assessee, it was initiated in the name of the dead person and the assessment order was also passed in the name of a dead person, though his legal representative had participated in the proceedings. 12. Therefore, the department is supposed to have substituted the legal representative in the place of a dead person. However, they had not done the same and no order can be sustainable if it is passed in the name of a dead person. Further, as discussed above, in the case of Commissioner of Income-Tax-VII, Chennai vs.M.Hemanathan, the Hon’ble Division Bench of this Court had held that no proceedings can be initiated against a dead person. 13. For all these reasons, this Court is of the considered view that the impugned orders are not sustainable and the same are liable to be set aside. Accordingly, the impugned assessment order dated 21.03.2023 and the penalty proceedings dated 23.09.2023 are set aside. However, the liberty is granted to the respondent to initiate the proceedings against the legal representative of the deceased assessee in accordance with law. 14.With the above observations, these writ petitions are allowed. No costs. Consequently, connected miscellaneous petitions are closed. 7. In view of the undisputed facts that the assessee had expired on 26.07.2018 and that the Assessing Officer was duly informed of the said fact, we find that the notice issued under section 148 of the Act and the consequent assessment proceedings were initiated and completed in the name of a deceased person. No notice under section 159 of the Act was issued to the legal representatives, nor were the proceedings ever validly initiated against them. Mere participation of one of the legal heirs in the assessment proceedings cannot cure this fundamental jurisdictional defect. Such a defect is not curable under section 292B of the Act. 8. Respectfully following the binding decisions of the Hon’ble jurisdictional High Court relied upon by the ld.AR, we hold that the assessment order as well as the impugned order are void ab initio and a nullity in the eyes of law. Accordingly, the impugned assessment is hereby quashed. The appeal of the assessee is allowed.”

From the above findings of the Coordinate Bench and the decision of the Hon'ble Madras High Court, it is clear that the proceedings which were initiated after death of the person is not valid and in terms of section 159(2)(b) of the Act any proceedings of the deceased person subsequent to death can be initiated only against the legal representatives. In the present case, it is an undisputed fact that the reassessment proceedings are initiated subsequent to the date of death of the assessee and all the notices initiating the reassessment proceedings are issued in the name of the death person which is not a curable defect u/s. 292B of the Act. Further, the legal representative has intimated the A.O about the death of the assessee and the A.O has continued the proceedings without issuing a fresh notice in the name of the legal heir. In the facts and circumstances as enumerated herein above, we are of the considered view that the proceedings initiated in the name of dead assessee is invalid and the subsequent assessment order is liable to be quashed.

In the result, the appeal of the assessee is allowed.