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Facts
The assessee filed their income return for AY 2015-16. The assessee passed away on April 14, 2016, prior to the issuance of notice under section 143(2) on August 24, 2016. Despite the Assessing Officer being informed of the death, subsequent notices and the assessment order were issued in the name of the deceased.
Held
The Tribunal held that statutory notices issued to a deceased person are invalid and not legally sustainable. Proceedings conducted against a dead person are considered a nullity. Therefore, the assessment order passed under section 144 and the order of the CIT(A) are quashed.
Key Issues
Whether assessment proceedings initiated and orders passed in the name of a deceased assessee, after intimation of death, are legally valid.
Sections Cited
250, 143(2), 142(1), 144
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Before: SHRI DINESH MOHAN SINHA & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 28.10.2024 by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2015-16.
The grounds of appeal raised by the assessee are as under: “Validity: (1) The proceedings having been undertaken in the name of dead person are not legally sustainable. (2) The statutory notice u/s 143(2) that enables to carry out assessment issued on dead person no assessment could have been undertaken without curing. and that the assessment order is required to be held non-est.
/AY.2015-16 Late Priyank Narendrabhai Patel (3) All the notices u/s 142(1) having been issued on dead person, they are not legally valid. (4) The Ld. CIT(A) order being issued on dead person is required to be quashed. Merits: (1) On the facts and circumstances of the case, the learned CIT(A) ought to have allowed the appeal rather than setting it aside. (2) With the powers of the learned CIT(A) co-terminus with the Assessing Officer, he ought to have taken into consideration the evidence tendered before him. Miscellaneous: (1) All of the above grounds are prejudiced to one another. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal
.”
3. The facts of the case in brief are that the assessee filed his return of income on 05.09.2015, declaring total income of Rs.11,18,990/-. The case was selected under limited scrutiny. Notice u/s 143(2) of the Act was issued on 24.08.2016. In response, it was submitted that the assessee had died on 14.04.2016. Thereafter, the Assessing Officer (in short, ‘AO’) asked the assessee to furnish reply, but there was no response from the assessee. The AO also issued show cause notice on 11.07.2017, but again there was non- compliance. Hence, the AO passed an ex parte order u/s 144 of the Act by making addition of Rs.1,37,39,900/-, being the amount deposited in the bank accounts of various persons, as for the details in the table at para 5 of the assessment order.
4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) condoned the delay of 77 days in filing the appeal and /AY.2015-16 Late Priyank Narendrabhai Patel admitted the appeal for adjudication. He observed that since the assessee expired, the AO issued notices to the legal heir of the appellant. He set aside the order of AO passed u/s 144 for making a fresh assessment because the appellant had not furnished any documentary evidence during the assessment proceedings.
5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted two paper books containing 67 pages including copy of death certificate of Priyank N. Patel dated 14.04.2016 (Page 1 of PB), copy of notices u/s 143(2), 142(1) and show cause notices, letter dated 09.02.2022 to CIT(A), copies of cash flow summary and bank statements, ITR for previous 3 years and bank statements showing date-wise cash deposit and withdrawal. He submitted all the documents before the AO and CIT(A). The ld. AR submitted that the order is liable to be set aside both on jurisdictional and factual grounds. He submitted that the AO issued notice u/s 143(2) of the Act on 24.08.2016 on the assessee, who had expired on 14.04.2016. The intimation to this effect was given to the AO during the assessment proceedings, but the AO did not issue any notice u/s 143(2) of the Act in the name of the leal heir of the deceased assessee. He submitted that the AO issued notice in the name of deceased person, which is not valid. The ld. AR relied on the decisions in cases of Sumit Balkrishan Gupta vs. ACIT, 112 taxmann.com 93 (Bom.), Vikram Bhatnagar vs. ACIT, 147 taxmann.com 254 /AY.2015-16 Late Priyank Narendrabhai Patel (Del.), Chandreshbhai Jayantibhai Patel vs. ITO, 101 taxmann.com 362 (Guj.), Bhupendra Bhikhalal Desai vs. ITO, 130 taxmann.com 196 (Guj.), Nishant Daxeshbhai Mehta vs. ITO, R/Special Civil Appeal No.5512 of 2023, dated 27.04.2023 (Guj.), Urmilaben Anirudhhasinhji Jadeja vs. ITO, 117 taxmann.com 504 (Guj.), Pravinchandra A. Shah vs. UOI, 154 taxmann.com 616 (Guj.), Himadri Kandarp Mehta vas. ITO, 144 taxmann.eom 34 (Guj.) and Laxmiben Ravji Rabadia vs. ITO, 152 taxmann.com 468 (Guj.) and submitted that the notice u/s 143(2) issued in the name of the deceased person was invalid. Hence, the order passed u/s 144 is also invalid. The order passed by the CIT(A) in the name of the dead person is also a nullity.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of the lower authorities.
We have heard both the parties and perused the materials available on record. We have also deliberated upon the decisions relied upon by ld. AR. The assessee expired on 14.04.2016. The intimation regarding death of assessee was given to the AO, which has been acknowledged by the AO at para 2 of the assessment order. However, the AO issued various notices u/s 142(1) and show cause notice in the name of deceased assessee. The CIT(A) has also issued the notices u/s 250 in the name of the deceased assessee. He has also passed the order in the name of “Priyank N. Patel” instead of “Late Priyank N. Patel through his L/H Shri Narendrabhai Patel.” It is, therefore, clear that the proceedings have been undertaken in the name of /AY.2015-16 Late Priyank Narendrabhai Patel dead person. The statutory notice u/s 143(2) of the Act dated 24.08.2016, which enables the AO to carry out assessment was issued on the person who expired on 14.04.2016. Therefore, no assessment could have been undertaken without curing the notices and show cause letters etc. It is well settled that notice issued on a dead person is not valid and the consequential assessment or re-assessment order also does not survive. The Hon’ble Bombay High Court in case of Sumit Balkrishna Gupta (supra) held that a notice issued u/s 143(2) of the Act, which gives jurisdiction to complete assessment, having been issued in the name of a dead person, is non est in law and is not saved even by section 292B of the Act. The Hon’ble jurisdictional High Court in cases of Nishant Daxeshbhai Mehta (supra) held that any notice issued in the name of dead person is unenforceable and invalid. The Hon’ble Gujarat High Court again in case of Himadri Kandarp Mehta (supra) held that a notice issued for commencement of assessment or re-assessment proceedings against dead person is null and void. It is now well settled that any proceedings against a dead person is a nullity. The Hon’ble Supreme Court in case of CIT vs. Amarchand N. Shroff, (1963) 48 ITR 59 (SC) held that the individual assessee must be a living person, and no assessment can be made on a dead person. In view of the authoritative precedents cited supra, the notice issued u/s 143(2) of the Act as well as the assessment order passed u/s 144 of the Act is not liable to be sustained and are accordingly quashed. Consequently, the order of CIT(A) is also quashed.
/AY.2015-16 Late Priyank Narendrabhai Patel 8. In the result, the appeal of the assessee is allowed. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 03/12/2025.