MrsNethi Lavanya vs. The Income Tax Officer

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WP/34909/2026HC TelanganaHBHC01070709202615 October 2026Author: P.SAM KOSHY,SUDDALA CHALAPATHI RAO5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the proceedings initiated against a deceased person are not sustainable in law. The Court noted the submission by the learned Senior Standing Counsel for the Income Tax Department acknowledging that proceedings could not have been initiated against a deceased individual and that an opportunity might be granted to initiate proceedings against the legal heirs. Consequently, the impugned orders (notice under Section 148-A, assessment order under Section 147 read with Section 144, and penalty orders under Section 271AAC(1)) were set aside as they were not sustainable in law. However, the right of the respondents to initiate proceedings against the legal heirs of the assessee, if permissible under law, was expressly left open. The writ petition was allowed, with no order as to costs.

What were the facts?

The petitioner, Mrs. Nethi Lavanya, filed a writ petition challenging notices and orders issued by the Income Tax Officer (ITO) - 2, Hyderabad, and the Chief Commissioner of Income Tax, Bangalore. The assessment year in question is 2017-18. The challenged actions include a notice under Section 148-A dated 14.03.2024, an assessment order under Section 147 read with Section 144 dated 29.05.2025, and penalty orders under Section 271AAC(1) dated 11.12.2025 and 26.12.2025. The primary contention raised by the petitioner was that the proceedings were initiated against a deceased person, who had expired on 04.07.2020.

What were the issues?

1. Whether the notice issued under Section 148-A, the assessment order under Section 147 read with Section 144, and the penalty orders under Section 271AAC(1) for Assessment Year 2017-18 are legally sustainable when initiated against a deceased assessee. (Question of law and fact, concerning Section 148-A, Section 147, Section 144, and Section 271AAC(1) of the Income Tax Act, 1961). Assessee's contention: The proceedings are illegal and void ab initio as they were initiated against a deceased person, violating principles of natural justice and Articles 14(1)(g) and 265 of the Constitution of India. Revenue's contention: The Department acknowledged that proceedings could not have been initiated against a deceased person and sought an opportunity to initiate proceedings against the legal heirs.

Which sections of the Income-tax Act were involved?

Section 148-A,Section 147,Section 144,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
I 3s23l !N THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FIFTEENTH DAY OF OCTOBER TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE THE ACTING CHIEF JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION NO: 34909 OF 2026 Between: Mrs.Nethi Lavanya, Legal Representative & W/o: Venkata Ramana Nethi (deceased), aged 49 years, Occupation: Housewife, Fl/o:14504 Briar Forest Dr., Ap|.725, Houston Texas - 77077, United States of America ...PETITIONER AND 1. The lncome Tax Officer (lTN TXN) - 2, Hyderabad, Aaykar Bhawan' Opposite L.B Stadium, Basheerbagh, Hyderabad - 500 004 Telangana. 2. The Chief Commissioner of lncome Tax(lTN TXN), Bangalore, Room No. 103, Central Revenue (C.R) Building, No. '1 ,Queens Road, Bengaluru - 560 001 . ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to lssue a Writ of Mandamus or any other appropriate Writ Order or Direction declaring a. the notice u/s 148 of the Income Tax Act 1 961 dated 14.03.2024' issued by the .t"t Respondent bearing DIN & Notice No.ITBA/AST/S1148_112023- 24t1062623528 (1) b. the Assessment order dated 29.05.2025 passed by the 1st Respondent uts '147 r.w.s 144 of the lncome Tax Act,1961, bearing DIN & Order No. : |TBA/AST/ S t 1 47 t 2025-26 I 1 07 6544245(1 ); c. the consequential penalty order u/s 271AAC(1) of the lncome Tax Act,1961, dated 11.12-2025, passed by the 1st Respondent bearing DlN.: ITBA/PNLlFl271AAC(1)12025-2611083585388(1); for the Assessment Year 2017-18 as arbitrary illegal bad in law void-ab-initio violative of the principles of naturirl justice apart from being violative of Articles t a (1Xg) and 265 of the Constitution of lndia. l.A. NO: 1OF 2021i Petition under lection 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings including any recovery pursuant to the notice u/s 148 of the lncome Tax Act 1€ 61 dated 14.03.2024 issued by the 1st Respondent bearing DIN Notice No.ITBtuAST/S/148_112023-2411062623528(1) pending disposal of the above Writ Petitlon Counsel for the Petitioner(: SRI A. V. A. SIVA KARTIKEYA Counsel for the Rrrspondents: SRl. VIJHAY K PUNNA (SENIOR STANDING couNSEL FOR TNCOME TAX)

The Court made the following: ORDER

t--, IN THE HIGH COURT FOR THE STATE, OF TELAI\GANA AT HYDERABAI) THE HON'BLE THE ACTING CHIEF JUSTICE P.SAM KOSHY AND THE HONOURABLE SRJJUSTICE SUDDALA CHALAPATHI RAO (CNR.No. HBHC0 I 07 07 092026) Date:15.10.2026 Between: Mrs.Nethi Lavanya ...Petitioner Ard The Income Tax Officer and another ...Respondents COMMON ORDER: (per the Hon'ble the Acting ChiefJustice P.Sam Koshy) Heard Mr.A.V.A.Siva Kartikeya, leamed counsel for the petitioner and Mr.Vijhay K.Punna, leamed Senior Standing Counsel for the Income Tax Department, for respondents and perused the record.

2.

The challenge in the present writ petition is to the action of the respondents in passing the order dated 14.03.2024 under Section 148-A and the subsequent assessment order dated 29.05.2025 under Section 147 read with Section 144 of the Income Tax Act, 1961. The petitioner has also challenged the penalty orders passed subsequently on 11.12.2025 and 26.12.2025, respectively.

3.

The primary challenge to the impugned orders is that the proceedings were initiated against a deceased person. According to the leamed counsel for the petitioner, the assessee in the present case expired as early as on 04.07.2020 I

r- 2 When the afore: aid fact was brought to his notice, the leamed Standing Counsel for the Departnrent submitted that, undisputedly, proceedings could not have been initiated against a deceased person. He further submitted that an opportunity may be given tc the Department to initiate appropriate proceedings against the legal heirs of the assessee

4.

In vievv ol'the same, the proceedings pertaining to the assessment years in question, having been initiated against a deceased person, are not sustainable in law and, therelor:, deserve to be set aside. Accordingly, the impugned orders are set aside. Noneth:less. the right of the respondents to initiate proceedings against the legal heirs of .he assessee, if permissible under law, is left open.

5.

Accordingly, -.he rvrit petition stands allowed. There shall be no order as to costs. Consequen ilv. miscellaneous petitions pending, if any. shall stand closed. //// A.H.S.GOWRI SHANKAR ASSISTANT REGISTRAR ./,/1 ( .-) SECTION OFFlCER To, TJ

1.

The tncome T,rx Officer (tIry IIN) _ 2, Hyderabad, Aaykar Bhawan, Opposite L.B Stadium, []asheerbash, nyoeiabaj _ i6d'6iii","nsrnu.

2.

The Chief Conrmissioner of,lncome Tax(lTN TXN). Bangalore, Room No. 103, _ Centrat Reven .re rC.R) Buitding G j,d;;;R,oad, Bengaturu _ 560 001. 3. One CC to Sri {. V. A. Siva Kartikeya, nOvocate IOeUC; 4. one cc to Sri Viihav K punna, (sENroR STANDING couNSEL FoR INCOME TAX) tOPUCi

5.

Two CD Copies, TKS

HIGH COUIRT DATED: 15i1012026 ORDER ALLOWINGTHE WRIT PETITION WITHOUT COSTS H E ic' 2W6 14 s Nlv B 0 o ),)) a D 2 v (' { -asF-') a \

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