LATE ANILKUMAR AGGARWAL ( LEGAL HEIR OF SARANGA ANIL KUMAR AGGARWAL),MUMBIA vs. ITO WARD 17(1)(1), MUMBAI

आदेश / ORDER PER SMT. BEENA PILLAI, HON'BLE JUDICIAL MEMBER:

Present appeal filed by assesse arises out of the order passed by NFAC, Delhi [hereinafter referred to as “Ld.CIT(A)”] dated 03/11/2025 for A.Y. 2014-15, on the following grounds of appeal:-

“1. On the facts and circumstances of the case and in law, the order issued u/s 148A(d), notice issued u/s 148 and assessment order issued u/s 147 r.w.s.

144 of the Act are required to be declared as invalid and bad in law in as much as they have been issued in the name of deceased person.

The assessee, Late Shri Anilkumar Roshanlal Aggarwal, was engaged in the business of real estate development and expired on 01/05/2014. Pursuant to an order passed by the Hon'ble Bombay High Court in Petition No.624 of 2015, Letter of Administration dated 20/01/2016 was issued in favour of his wife, Smt.Saranga Anilkumar Aggarwal, authorizing her to act as the legal heir of the deceased assessee. Thereafter, the legal heir applied on the Income Tax Portal for registration as an authorized representative of the deceased assessee and uploaded the death certificate. The request was accepted on 30/05/2017. According to the assessee, the Income Tax Department was thus duly informed about the death of the assessee and was aware of the fact that the assessee had expired. The return of income for the year under consideration was not filed.

2.1. Based on information available in the ITS/NMS portal, the Department noticed certain high-value transactions in the name of the assessee aggregating to Rs.17,21,22,172/-, inter alia, comprising interest receipts, property transactions, remittances to non-residents, purchase of immovable property, credit card payments and payments in respect of transfer of property as reflected in Form 26QB. Consequently, notice u/s.148 dated 15/04/2021 was issued, which was subsequently treated as a notice deemed to have been issued u/s 148A(b) pursuant to the judgment of the Hon'ble Supreme Court in Union of India vs. Ashish Agarwal [2022] 138 taxmann.com 64 (SC). Thereafter, notice u/s 148A(b) dated 27/05/2022 was issued and the Jurisdictional Assessing Officer passed an order u/s 148A(d) dated 27/07/2022 holding that it was a fit case for reopening. Pursuant thereto, notice u/s 148 was issued on 28/07/2022. However, no return of income was filed in response thereto. Various notices and show-cause notices issued during the reassessment proceedings also remained substantially uncomplied with.

2.2. After the demise of the assessee, the affairs of the RNA Group deteriorated significantly. The business operations came to a standstill, cash flows dried up, banks initiated recovery proceedings, several group companies were dragged into insolvency proceedings, the corporate office and records were taken over by secured creditors, and most employees resigned. It was contended that due to these extraordinary circumstances, the notices issued by the Department remained unattended and the legal heir was unable to effectively participate in the assessment proceedings.

2.3. Subsequently, the Ld.AO observed that despite issuance of statutory notices, neither the assessee nor the legal heir furnished the requisite details and explanations in respect of the transactions reflected in the information available with the Department. Accordingly, the reassessment proceedings were completed ex parte u/s.147 r.w.s.144 of the Act on 03/05/2023. The Ld.AO made additions aggregating to Rs.17,21,22,172/- on the basis of the information available on record and brought the same to tax in the hands of the assessee.

Aggrieved, the legal heir preferred an appeal before the Ld.CIT(A) challenging the validity of the reassessment proceedings as well as the additions made in the assessment order.

2.4. It was, inter alia, contended that the reassessment proceedings had been initiated and carried out in the name of a deceased person despite the Department having prior knowledge of the death of the assessee. It was further contended that the notices and consequential proceedings suffered from various jurisdictional infirmities and that the assessment deserved to be quashed.

2.5. The Ld.CIT(A), however, did not annul the assessment. Instead, invoking the powers under the proviso to section 251(1)(a) of the Act, the Ld.CIT(A) set aside the assessment and restored the matter to the file of the Ld.AO for framing a fresh assessment after providing adequate opportunity to the legal heir.

Aggrieved by the aforesaid action of the Ld.CIT(A), the assessee is in further appeal before us.

3.1. The Ld.AR further submitted that despite the aforesaid fact being available in the Department's records, the order passed u/s.148A(d) as well as notice issued u/s.148 dated 28/07/2022 were also issued in the name of the deceased assessee. It was contended that initiation of proceedings against a dead person is a jurisdictional defect which goes to the root of the matter and renders the entire reassessment proceedings non est in the eyes of law. Accordingly, it was prayed that the reassessment proceedings initiated u/s 148A(b), culminating in the assessment framed u/s 147 r.w.s.144 of the Act, be quashed.

3.2. Per contra, the Ld.DR relied upon the orders of the lower authorities. The Ld.DR also placed on record a communication received from the Ld.AO stating therein that the fact regarding the death of the assessee had not been brought to the notice of the Ld.AO at the relevant point of time. It was, therefore, submitted that the Ld.AO was unaware of the demise of the assessee while initiating the reassessment proceedings. The Ld.DR accordingly supported the action of the lower authorities.

We have perused the submissions advanced by both sides in light of the record placed before us.

4.1. The undisputed facts emerging from the record are that Late Shri.Anilkumar Roshanlal Aggarwal expired on 01/05/2014. Copy of the death certificate dated 07/05/2014 is placed on record before us. It is further not in dispute that the legal heir approached the Income Tax Department for registration as legal heir on the Income Tax Portal and the said request was approved by the Department on 30/05/2017. Thus, the particulars of the legal heir were already available in the Departmental records much prior to initiation of reassessment proceedings.

4.2. We further find that notice issued u/s 148A(b), order passed u/s.148A(d) and notice issued u/s.148 dated 28/07/2022 were all issued in the name of the deceased assessee. The contention of the Revenue that the fact of death was not brought to the notice of the Ld.AO does not impress us. The reassessment proceedings were admittedly initiated through the ITBA system. Once the details of the legal heir had already been registered and approved on the Income Tax Portal as early as on 30/05/2017, such information formed part of the Department's own records and was available to the Revenue. Therefore, the Department cannot take shelter behind the plea that the Ld.AO was personally unaware of the death of the assessee.

4.3. In our considered view, initiation of reassessment proceedings against a deceased person strikes at the very root of jurisdiction. The defect is not a mere procedural irregularity but a substantive illegality which renders the proceedings void ab initio. Once the notice issued u/s 148A(b) itself is invalid, all subsequent proceedings flowing therefrom, including the order passed u/s.148A(d), notice issued u/s 148 and the assessment framed u/s.147 r.w.s.144 of the Act, cannot survive.

4.3.1. In view of the aforesaid facts and circumstances, we hold that the reassessment proceedings initiated against the deceased assessee are bad in law and deserve to be quashed.

Accordingly, Ground No.1 raised by the assessee is allowed.

Since we have quashed the reassessment proceedings on the aforesaid jurisdictional ground, Ground Nos.2 to 4 have become academic and, therefore, do not require separate adjudication. Accordingly, the same are dismissed as infructuous.

In the result, appeal filed by assessee stands allowed.

Order pronounced in the open court on 25/06/2026.

Sd/- Sd/- JAGADISH BEENA PILLAI ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai Dated: 25/06/2026 SC, Sr. P.S. Copy to: LATE ANILKUMAR AGGARWAL ( LEGAL HEIR OF SARANGA ANIL KUMAR AGGARWAL), 1 7TH , FLOOR, RNA CORPORATE PARK , KALANAGAR, BANDRA EAST, MUMBAI-400051, MAHARASHTRA

ITO WARD 17(1)(1), 2 AAYAKAR BHAVAN, M.K ROAD,, MUMBAI-400020, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE