LATE SHRI RANJITSINH BHAWANSINH VAGHELA THRU L/H BHARATSINH R. VAGHELA,GANDHINAGAR vs. THE INCOME TAX OFFICER, WARD-3,, GANDHINAGAR

In response, Ld. DR placed reliance on the observations made by CIT(Appeals) in the appellate order.

We have heard the rival contentions and perused the material on record.

We observe that in the instant case the return of income itself was filed on 30-03-2014 in the name of the deceased assessee and not through any legal heir, even though the death had occurred on 02-10-2012. The PAN of the assessee was not surrendered. No evidence is produced before us to show that the Assessing Officer had actual knowledge of the death at any stage before passing of the assessment order. The reliance placed on an alleged intimation letter dated 26-02-2015 is not supported by any proof of receipt, nor does it Late Shri Ranjitsinh Bhawansih Vaghela (L/h. Through Bharatsinh R. Vaghela) vs. ITO Asst.Year –2012-13 - 4– in our view qualify as a lawful and effective intimation that could obligate the Assessing Officer under section 159 of the Act. In the above circumstances, the key issue that arises is whether the assessment order is void ab initio, or whether, the defect is an irregularity requiring corrective action by bringing legal heirs on record. In our view, two recent decisions of the Ahmedabad Tribunal directly address this situation, and we reproduce their facts, ratio and relevant extracts for ready reference.

In the case of Late Ashvinbhai Umedbhai Patel (Deceased) By L/H Smit Ashwinbhai Patel in & 1106/Ahd/2025 (Order dated 30-09-2025), the assessee had not filed a return of income. Reassessment proceedings under section 147 were initiated on the basis of bank information, and notice under section 148 was issued. The assessee had expired prior to initiation of reassessment. The legal heir did not intimate the death of the assessee to the Department, nor was the PAN surrendered. The notices were issued electronically to the deceased assessee’s Chartered Accountant’s e-mail address. Thereafter, the assessment was completed and penalty proceedings were initiated. The CIT(A) dismissed the appeal ex parte. When the matter reached the Tribunal, the legal heir raised a legal ground that the assessment was void since it had been passed on the deceased. The Tribunal held that although a notice issued on a deceased person is ordinarily unenforceable, this principle applies only where the Assessing Officer had knowledge of death. Where the legal heir never intimated the demise, and the assessee’s PAN remained active, and even proceedings were responded to in some manner, the Assessing Officer cannot be imputed with knowledge of the death. The Tribunal emphasised the operation of section Late Shri Ranjitsinh Bhawansih Vaghela (L/h. Through Bharatsinh R. Vaghela) vs. ITO Asst.Year –2012-13 - 5– 159(1) and (3), holding that the legal representative is treated as an assessee in law and is obligated to file return in the capacity of legal representative. While passing the order, ITAT made the following observations:

The Tribunal accordingly allowed the appeal for statistical purposes and restored the matter to the Assessing Officer to bring legal heirs on record and reframe the assessment.

In the case of Prasanna Prabhakaran (L/H of Late Vasava Panicker Prabhakaran) in (order dated 24-09- 2025) the assessee had not filed a return and reassessment was initiated based on bank information. A Notice u/s 148 was issued when the assessee was alive. During the course of assessment, the assessee expired. The son/legal heir responded in an online communication stating that the assessee had expired, but no death certificate or legal heir details were filed for several months. Only at the fag end of limitation was the death certificate uploaded even then, particulars of legal heirs required for section 159 compliance were never furnished. The Assessing Officer, with no legal heirs on record and with limitation expiring, passed the reassessment order in the name of the deceased. The Tribunal held that where jurisdiction was validly assumed while the assessee was alive, and the assessee expired during proceedings, the passing of order in the name of the deceased is an irregularity but not Late Shri Ranjitsinh Bhawansih Vaghela (L/h. Through Bharatsinh R. Vaghela) vs. ITO Asst.Year –2012-13 - 6– an illegality. The assessment is not void ab initio. The Tribunal relied on section 159 and the Gujarat High Court decision in CIT v. Sumantbhai C. Munshaw, holding that omission to substitute legal heirs is a curable defect where the Assessing Officer lacked knowledge or where legal heirs failed to cooperate. While passing the order, ITAT made the following observations:

The Tribunal thus set aside the assessment and restored it to the Assessing Officer.

We are of the considered view that the facts of the present case fall squarely within the framework of the above two Tribunal rulings. In the case before us, the assessee had expired on 02-10-2012, yet the return of income was filed on 30-03-2014 in his name, without any indication that the assessee was deceased. The PAN was not surrendered. No valid or verifiable intimation of death was placed on record before the Assessing Officer. Even the alleged letter dated 26-02-2015 relied upon by the assessee has not been shown to be an effective or legally cognizable intimation. Therefore, the Assessing Officer cannot be held to have acted with knowledge that the assessee was deceased.

Following the ratio of Late Ashvinbhai Umedbhai Patel (supra), where the Tribunal held that the Assessing Officer cannot be penalised for lack of knowledge of death where legal heirs failed to inform promptly, and Late Shri Ranjitsinh Bhawansih Vaghela (L/h. Through Bharatsinh R. Vaghela) vs. ITO Asst.Year –2012-13 - 7– the ratio of Prasanna Prabhakaran (supra), where the Tribunal held that passing an assessment order on a deceased person during ongoing proceedings is an irregularity and not an illegality, the present case must be treated as one where the defect is curable by bringing legal heirs on record.

We therefore hold that the assessment order passed in the name of Late Shri Ranjitsinh B. Vaghela is not void ab initio but is an irregular assessment requiring rectification under section 159. In view of the above discussion and respectfully following the decisions of the Tribunal in Late Ashvinbhai Umedbhai Patel (deceased) (ITA Nos. 1105 & 1106/Ahd/2025, order dated 30-09-2025) and Prasanna Prabhakaran (ITA No. 1741/Ahd/2024, order dated 24-09-2025), we set aside the assessment order to the file of the Assessing Officer with a direction to bring the legal heir(s) of Late Shri Ranjitsinh B. Vaghela on record, issue appropriate statutory notices to such legal heir(s), allow due opportunity of hearing and reframe the assessment in accordance with law.