INCOME TAX OFFICER, MEHSANA vs. NILESHKUMAR DHANJIBHAI PATEL LEGAL HEIR OF DHANJIBHAI MAGANBHAI PATEL, MEHSANA, MEHSANA

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ITA 3/AHD/2026Status: DisposedITAT Ahmedabad22 April 2026AY 2018-195 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that issuing a notice under section 148 to a deceased person renders the reassessment proceedings void ab initio due to a jurisdictional defect. This defect is substantive and cannot be cured, even with the participation of the legal heir.

What were the facts?

The Assessing Officer initiated reassessment proceedings against a deceased assessee by issuing notices under sections 148A(b) and 148. Despite being informed of the death, the AO did not issue a fresh notice to the legal heir, proceeding instead under section 159. The assessment was completed treating cash deposits as unexplained money.

What were the issues?

Whether reassessment proceedings initiated by issuing notice to a deceased assessee are void and whether such a defect is curable.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 69A,Section 159,Section 292B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL

For Appellant: Shri Vijay Medat, AR
For Respondent: Shri Abhijit, Sr. DR
Hearing: 20.04.2026Pronounced: 22.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.03/Ahd/2026 (Assessment Year: 2018-19) Income Tax Officer, Vs. Nileshkumar Dhanjibhai Patel Second Floor, R. No. 213, (L/h. of Dhanjibhai Maganbhai Apollo Enclave, Opp. Jain Patel), Derasar, Highway, 58, Patel Vas Maharajpura, Mehsana-384002 Mehsana-382140 [PAN No.ATWPP7797G] (Appellant) .. (Respondent) Appellant by : Shri Vijay Medat, AR Respondent by: Shri Abhijit, Sr. DR Date of Hearing 20.04.2026 Date of Pronouncement 22.04.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Department against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 13.10.2025 passed for A.Y. 2018-19.

2.

The Department has raised the following grounds of appeal:

“(a) The Ld. CIT(A) has erred in law and on facts in quashing the assessment proceedings wherein an addition of Rs. 1,11,30,304/- was made as per the provisions of section 69A of the Act on account of cash credit in the Bank Account of the assessee. (b) The Ld. CIT(A) has erred on facts and law by not taking into cognizance the fact that the AO was not aware that the assessee has passed away during the proceedings under section148A(d). However, the moment it came to his cognizance he took corrective measure and added the name of Legal heir to the pending proceedings. (c) The appellant craves leave to add, alter and/or to amend all or any the ground before the final hearing of the appeal.”

ITA No. 03/Ahd/2026 ITO vs. Nileshkumar Dhanjibhai Patel (L/h. of Dhanjibhai Maganbhai Patel) Asst.Year –2018-19 - 2– 3. The brief facts of the case are that the assessee, an individual, had not filed his return of income for A.Y. 2018-19 and was flagged under the Non-Filer Monitoring System (NMS) on the Insight Portal on account of substantial cash deposits aggregating to Rs. 1,36,06,200/- in his bank account. Based on such information, the Assessing Officer initiated proceedings under section 147 of the Act by issuing notice under section 148A(b) dated 13.03.2022 followed by notice under section 148 dated 29.03.2022. It is an undisputed fact borne out from record that the assessee had expired on 13.07.2020, i.e., much prior to issuance of the aforesaid notices. During the course of reassessment proceedings, the son of the assessee intimated the fact of death and furnished the death certificate. Thereafter, the Assessing Officer proceeded under section 159 of the Act and issued certain notices to the legal heir. However, no fresh notice under section 148 of the Act was ever issued in the name of the legal representative. The assessment was ultimately completed under section 144 read with section 147 of the Act on 13.03.2023 determining total income at Rs. 1,11,30,304/- by treating the cash deposits as unexplained money under section 69A of the Act.

4.

Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(Appeals). The CIT(Appeals), after examining the record, held that the notice under section 148 of the Act having been issued in the name of a deceased person renders the entire reassessment proceedings without jurisdiction. The CIT(Appeals) observed that once the Assessing Officer was made aware of the death of the assessee, it was incumbent upon him to issue fresh notice under section 148 of the Act in the name of the legal representative in terms of section 159(2)(b)

ITA No. 03/Ahd/2026 ITO vs. Nileshkumar Dhanjibhai Patel (L/h. of Dhanjibhai Maganbhai Patel) Asst.Year –2018-19 - 3– of the Act. In the absence of such valid notice, the proceedings were held to be void ab initio and the assessment was quashed. Consequently, the grounds on merits were not adjudicated.

5.

The Department is in appeal before us against the order passed by CIT(Appeals) allowing the appeal of the assessee.

6.

We have heard the rival submissions and perused the material available on record. The core issue which arises for our consideration is whether the reassessment proceedings initiated and completed in the present case suffer from a jurisdictional defect on account of issuance of notice under section 148 of the Act in the name of a deceased person and whether such defect is curable.

7.

At the outset, it is an admitted position that the assessee expired on 13.07.2020, whereas the notice under section 148A(b) of the Act and notice under section 148 of the Act were issued on 13.03.2022 and 29.03.2022 respectively. Thus, the very initiation of proceedings is against a non-existent person. It is trite law that issuance of a valid notice under section 148 is a sine qua non for assumption of jurisdiction under section 147 of the Act.

8.

The Hon’ble Supreme Court in PCIT v. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC) has held that framing of assessment in the name of a non-existent entity is a substantive illegality and not a procedural irregularity, and such defect cannot be cured under section 292B of the Act. The principle laid down therein squarely applies to cases of deceased persons as well.

ITA No. 03/Ahd/2026 ITO vs. Nileshkumar Dhanjibhai Patel (L/h. of Dhanjibhai Maganbhai Patel) Asst.Year –2018-19 - 4– 9. Further, the Hon’ble Madras High Court in Alamelu Veerappan v. ITO (2018 102 CCH 118, Madras High Court) has categorically held that notice issued in the name of a dead person is unenforceable in law and participation by legal heir would not validate such notice. Similarly, the Hon’ble Delhi High Court in Savita Kapila v. ACIT (2020) 426 ITR 502 (Delhi High Court) has held that reopening notice issued to a dead person is void and all consequential proceedings are liable to be quashed.

10.

In the present case, the Assessing Officer, despite being aware of the death of the assessee, failed to issue a fresh notice under section 148 to the legal heir. The invocation of section 159 of the Act at a later stage without curing the jurisdictional defect is legally unsustainable. Section 159 of the Act permits continuation of validly initiated proceedings, but it does not authorize initiation of proceedings against a deceased person.

11.

We also find that the reliance placed by the Revenue on the decision in Haresh Dayashankar in ITA No. 684/Ahmedabad/2025 is distinguishable on facts. In that case, the Assessing Officer had assumed jurisdiction by issuing notice under section 142(1) of the Act during the lifetime of the assessee and therefore valid proceedings had already commenced, which were subsequently continued against the legal heir in terms of section 159(2) of the Act. In contrast, in the present case, no proceedings were initiated during the lifetime of the assessee and the very first notice under section 148 of the Act was issued after his death. Hence, there was no valid proceeding in existence which

ITA No. 03/Ahd/2026 ITO vs. Nileshkumar Dhanjibhai Patel (L/h. of Dhanjibhai Maganbhai Patel) Asst.Year –2018-19 - 5– could be continued against the legal heir. The defect here goes to the root of jurisdiction and is not a curable irregularity.

12.

We further note that even the assessment order itself does not properly frame the assessment in the hands of the legal heir as mandated under section 159(3) of the Act. There is no clear determination of liability in the capacity of legal representative nor any finding limiting liability to the extent of estate inherited. This further reinforces the conclusion that the assessment is fundamentally flawed.

13.

In view of the above discussion and respectfully following the binding judicial precedents, we find no infirmity in the order of the CIT(Appeals) in quashing the assessment as void ab initio. Accordingly, the grounds raised by the Revenue are dismissed.

14.

In the result, the appeal of the Revenue is dismissed. This Order pronounced in Open Court on 22/04/2026

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/04/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. संबंिधत आयकर आयु� / Concerned CIT 3. 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

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