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Facts
The assessee, who had expired before the proceedings were initiated, was subjected to reassessment proceedings under Section 147 for AY 2015-16. The legal representative had updated the assessee's portal with the death information.
Held
The Tribunal held that proceedings initiated against a deceased person without impleading legal representatives are void ab initio. The updates to the portal were deemed sufficient intimation of death.
Key Issues
Whether reassessment proceedings initiated against a deceased assessee, whose death was updated in the department's portal, are valid.
Sections Cited
147, 144, 144B, 148, 148A, 271D, 269SS, 234A, 234B, 271(1)(c), 271F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
Date of Hearing : 03-07-2025 Date of Pronouncement : 05-08-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 04/03/2025 in respect of the A.Y. 2015-16 and raised the following grounds: “
A. GENERAL GROUNDS:
1. The appellate order passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] is contrary to law, facts and circumstances of the case B. LEGAL GROUNDS:
2. The appellate order dated 04.03.2025 passed by the CIT(A) upholding the assessment order dated 10.03.2023 passed by the assessing officer under section 147 read with section 144 read with section 144B of the Income-tax Act, 1961 ("Act") is bad in law in as much as the same is passed in the name of a dead person and hence is non est and void.
3. The CIT(A) erred in not appreciating that the proceedings under section 147 were initiated against a dead person and hence the entire proceedings are non-est and void and deserved to be quashed.
4. The CIT(A) erred in not appreciating that the assessee had expired on 19th May 2019 which was intimated to the Income Tax Department and the details of the legal representative were updated in the Income Tax portal. appeal against the ex-parte order of the AO was filed by the representative assessee.
5. The CIT(A) erred in dismissing the appeal without providing the effective opportunity of hearing to the Appellant.
6. The CIT(A) erred in not adjudicating the grounds challenging validity of the assessment proceedings initiated by the AO against a dead person.
7. Without prejudice to the above, the reassessment proceedings initiated by the AO under section 148 read with section 148A of the Act are bad in law. C. GROUNDS IN RELATION TO COMPUTATION OF LONG- TERM CAPITAL GAINS ("LTCG"): 8. The CIT(A) and AO have erred in law and on facts in computing LTCG of Rs.59,53,488/-.
The CIT(A) and AO erred in not appreciating that the proceeds from the sale of property were reinvested by the Appellant and hence, there was no taxable capital gains.
10. The CIT(A) and AO erred in not considering the cost of improvement incurred by the Appellant while computing the capital gains.
The CIT(A) and AO erred in initiating proceedings under section 271D of the Act for violation of section 269SS of the Act for receipt or Rs.19,20,000/- in cash without appreciating that the amendment to section 269SS prohibiting receipt of any sum in cash in relation to transfer of immovable property was introduced with effect from 01.06.2015 and was not applicable for AY 2015-16. D. CONSEQUENTIAL GROUNDS: 12. The Ld AO erred in charging interest under section 234A and 234B of the Act.
The Ld AO erred in initiating penalty proceedings under section 271(1)(c) and 271F of the Act. Each of the above grounds is independent and without prejudice to the other grounds of appeal
preferred by the Appellant. The Appellant reserves the right to further add, alter or amend each one of the above grounds of appeal”
2. The brief facts of the case are that the assessee had not filed his return of income for the A.Y. 2015-16. Based on the information available with the department it was found that the assessee had sold an immovable property for the total sale consideration of Rs. 80 Lakhs. The profit on the said sale of property is liable to be taxed under the provisions of the capital gains. Therefore the AO had issued a show cause notice as per section 148A(b) of the Act on 18/03/2022. The assessee had not replied to the said show cause notice and therefore the AO had passed an order u/s. 148A(d) of the Act. The AO was of the view that, for any of the notices sent through the email ID of the assessee and also by way of speed post intimation, the assessee had not responded and therefore issued a final show cause notice on 17/02/2023. Even for this notice, the assessee had not responded and therefore the AO having no other option made a best judgment assessment u/s. 144 of the Act. In the assessment order, the AO referred the sale deed and arrived the long term capital gains. As against the said order, the assessee’s representative filed an appeal before the Ld.CIT(A). Before the Ld.CIT(A), it was submitted that the assessee Shri Devaraj expired on 19/05/2019 and thereafter the financial aspects of the deceased assessee was looked after by his wife Mrs. Surekha. The wife of the deceased assessee also stated, that the fact of the death of her husband has been updated properly in the portal of the department and therefore all the notices issued by the AO in the name of the deceased assessee and the consequential assessment order made u/s. 147 r.w.s. 144 of the Act are illegal one. The Ld.CIT(A) had dismissed the appeal ex-parte on the ground that the assessee had not responded to the three notices issued on 24/06/2024, 07/08/2024 and 17/02/2025.
As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that the legal representative of the deceased assessee had updated the assessee’s portal by including her name as the legal representative and therefore the proceedings initiated on the dead person is bad in law. The Ld.AR also filed a paper book enclosing the written submissions as well as the death certificate of the deceased assessee Shri Devaraj and the screenshot of the CPC portal for the PAN Nos. AKNPD7215R and AFWPD5189E and also the judgments of the Hon’ble Jurisdictional High Court as well the other High Courts and prayed that the appeal may be allowed.
The Ld.DR relied on the orders of the lower authorities and filed a written submission based on the report received from the Jurisdictional Assessing Officer and submitted that the death of the assessee was not informed to the department either by the legal representative or the legal heirs of the assessee. In the said written submissions, the Ld.DR further submitted that the assessee acquired two PAN Nos. and not provided any reasons for the allotment of the second PAN and also no request has been received for the cancellation of anyone of the PANs. Based on that, the Ld.DR submitted that the order passed by the lower authorities are in order.
We have heard the arguments of both sides and perused the materials available on record.
As seen from the certificates filed in the paper book, it is clear that the assessee died on 19/05/2019. Further, we have also perused the screenshot of the CPC portal for the two PAN nos. which is available in pages 8 & 9 of the paper book. From the said screenshots, the legal representative of the deceased assessee had not only updated the portal in respect of one PAN, but updated the second PAN also on 29/10/2021 and 18/02/2022. The L/R has updated the PAN No. AKNPD7215R on 29/10/2021 whereas updated the second PAN AFWPD5189E on 18/02/2022. Therefore the legal representative of the deceased assessee had properly done the procedures contemplated in the Income Tax Act after the demise of her husband on 19/05/2019. Once the portal has been updated by the legal representative, it is deemed that the assessee had intimated the death of the assessee to the authorities. Therefore there is no need to send any separate communication to the assessing officer about the death of the assessee. Now we are in the e-assessment proceedings and everything is based on the profile available in the portal. Further, it is also a fact that the appeal before the First Appellate Authority was filed through online and therefore without making proper entries in the portal of the assessee, the appeal could not be filed through the online portal of the assessee. Only when the L/R had updated the details in the portal of the assessee, the portal will allow the appeal to be filed online otherwise it will not accept the said filing. Therefore we are not accepting the contention of the Ld.DR that the assessee had not informed the assessing officer about the death of the assessee.
In the present case, admittedly, the notice u/s. 148A(b) of the Act was issued on 18/03/2022 i.e. after the portal of the assessee in both the PAN numbers were updated on 29/10/20211 and 18/02/2022. Therefore, the initiation of the proceedings u/s. 147 by issuing notice u/s. 148A(b) itself is not in accordance with the provisions and therefore the subsequent orders passed u/s. 148A(d) and the assessment order passed u/s. 147 r.w.s. 144 are also bad in law. The first principle is that proceedings could not be initiated on the dead person. We are of the view that the AO could not initiate any proceedings on the dead person without impleading the legal representatives. The following judgments are relied on by the assessee in support of their case that the assessment made on the dead person is liable to be set aside. a) Judgement of Hon’ble Karnataka High Court in case of ITO vs. Smt. Preethi V reported in (2025) 170 taxmann.com 673 b) Judgment of Hon’ble Delhi High Court in case of Savita Kapila vs. ACIT reported in (2020) 118 taxmann.com 46 c) Judgement of Hon’ble Bombay High Court in case of Mary Gene Gracious vs. ITO reported in (2025) 170 taxmann.com 82 d) Judgment of Hon’ble Delhi High Court in case of Lal Chand Verma vs. Union of India reported in (2025) 170 taxmann.com 825 9. We have also perused the judgements cited by the assessee and we are in full agreement that the facts of the present case is similar to the facts available in the judgements relied on by the assessee. Therefore we are following the principles laid down by the different High Courts and particularly the Jurisdictional High Court to the effect that the proceedings initiated on a dead person cannot be sustained under the provisions of the Act. Even though, the AO as well as the Ld.CIT(A) had passed the orders ex- parte, we are inclined to decide the issue based on the materials furnished by the assessee as well as the written submissions made by the Ld.DR. The death of the assessee was prior to the initiation of the proceedings u/s. 147 and after the legal representative had updated the profile of the assessee in the portal and therefore, without doing any further enquiry we are able to concluded that the proceeding was initiated on the dead person and the consequential assessment order was made on the dead person. The said facts are not disputed by both sides. In such circumstances the initiation of the proceedings u/s 147 is ab initio void. We therefore set aside the orders of the AO as well as the Ld.CIT(A) as not sustainable since the orders are made on the deceased assessee and after the profile in the portal has been updated by the legal representative of the deceased assessee on 29/10/2021 and 18/02/2022.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 05th August, 2025.