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

The brief facts of the case are that the assessee Late Shri Ranjitsinh B. Vaghela had filed his return of income on 30.03.2014, declaring long-term capital gains on sale of land situated at Sargasan. During the assessment proceedings, the Assessing Officer examined the cost of acquisition claimed as on 01.04.1981, the claim of deduction under sections 54B and 54F of the Income Tax Act, 1961 (“the Act”), and the evidence produced regarding agricultural use and subsequent acquisition of agricultural lands. The matter of cost of acquisition was referred to the Departmental Valuation Officer. After considering the valuation report, the Assessing Officer adopted the rate of Rs.5 per sq. metre, computed long-term capital gain at Rs. 4,07,29,002/-, allowed only part deduction under section 54F and rejected the majority of the deduction claimed under section 54B except to the extent of the registered purchase value. The taxable long-term capital gain was therefore computed at Rs. 3,79,67,406/-.

The assessee preferred an appeal before the CIT(Appeals) and contended that the Assessing Officer erred in adopting the cost of acquisition at Rs. 5 per sq. meter and in denying proper deductions under sections 54B and 54F. The CIT(Appeals) examined the valuation report, the submissions of the assessee and the remand report of the Assessing Officer, and finally upheld the adoption of Rs.5 per sq. metre as cost of acquisition while partly allowing the deduction u/s 54B to the extent of the registered sale deed value of Rs.59,86,160/- and recomputing the deduction allowable under section 54F at Rs.29,00,637/-. The CIT(Appeals) accordingly partly allowed the appeal of the assessee. Late Shri Ranjitsinh Bhawansih Vaghela (L/h. Through Bharatsinh R. Vaghela) vs. ITO Asst.Year –2012-13 - 3–

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

When the matter came before us, the learned counsel for the assessee raised an Additional Legal Ground contending that the assessment order was passed in the name of a deceased person. It was brought to our notice that Late Shri Ranjitsinh B. Vaghela had expired on 02-10-2012, while the assessment order was passed nearly two and a half years thereafter, on 26-03- 2015. It was contended that a letter dated 26-02-2015 had been filed before the Assessing Officer informing him of the assessee’s demise and therefore the impugned assessment order passed in the name of the deceased assessee is void. Several judicial precedents were relied upon to contend that an order passed on a deceased person is unenforceable in law.

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 the case of Late Ashvinbhai Umedbhai Patel (Deceased) By L/H Smit Ashwinbhai Patel in ITA Nos. 1105 & 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–

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 ITA No. 1741/Ahd/2024 (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 juri iction 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–

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–

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.

The appeal is accordingly allowed for statistical purposes. This Order pronounced in Open Court on 16/12/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 16/12/2025