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Facts
The assessee, Pawan Kumar Gupta, passed away on January 1, 2021. Subsequently, a search notice under Section 153C was issued in his name on June 30, 2022, despite the AO being aware of his death. The legal heir, Saroj Gupta, was later issued a letter on March 7, 2024.
Held
The Tribunal held that a Section 153C notice must be issued to the legal heir of a deceased assessee for the proceedings to be valid. Since the notice was issued in the name of the deceased assessee and not the legal heir, the entire proceedings are vitiated and liable to be quashed.
Key Issues
Whether the assessment proceedings under Section 153C are valid when the notice was issued in the name of a deceased assessee instead of their legal heir.
Sections Cited
153C, 144, 292BB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI NAVEEN CHANDRA
Sl. No./ITA Order appealed against AO’s order(s) No./assessment year 1.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2014-15) ITBA/APL/ M/250/2025-26/1075888138(1) Order dt. 18.03.2024.. order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2015-16) ITBA/APL/ M/250/2025-26/1075886619(1) Order dt. 18.03.2024 3.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2016-17) ITBA/APL/ M/250/2025-26/1075886791(1) Order dt. 18.03.2024 4.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2017-18) ITBA/APL/ M/250/2025-26/1075888318(1) Order dt. 18.03.2024 5.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2018-19) ITBA/APL/ M/250/2025-26/1075888228(1) Order dt. 18.03.2024 6.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2019-20) ITBA/APL/ M/250/2025-26/1075888434(1) Order dt. 18.03.2024 7.
CIT(A)-25, Delhi - order dt. 30.04.2025 [DIN: DCIT, CC-25, N. Delhi- (A.Y. 2020-21) ITBA/APL/ M/250/2025-26/1075890417(1) Order dt. 18.03.2024 All these appeals were heard analogously and are being disposed of by a single composite order for the sake of convenience.
From the facts leading to the instant appeals are that Pawan Kumar Gupta, original assessee, died on 01.01.2021 which is evident from the death certificate and appearing at page 274 of the paper book filed on behalf of the assessee before us.
In fact search notice under Section 153C was issued on 30.06.2022 appearing at page 223 of the paper book admittedly issued in the name of the deceased person Pawan Kumar Gupta followed by show cause dated 13.01.2024 appearing at page 248-267 of the PB filed before us. It also appears that the satisfaction recorded by the Ld. AO of the searched person was of 9.6.2022 in the name of the deceased assessee followed by the satisfaction recorded by the AO of that the death of the assessee was intimated by the legal heir of the assessee on 31.01.2024 to the AO of the assessee and the legal heir was issued with the letter dated 7.3.2024. Such fact is evident from para 16 of the assessment order which is brought to our notice by the Ld. DR. It is also further submitted by him that the legal heir of the assessee duly participated in the proceeding and neither raised any objection.
Learned Sr. Counsel Shri Salil Kapoor appearing for the assessee joins the issue here to this effect that the jurisdictional notice under Section 153C was admittedly issued in the name of the original assessee who died long back on 01.01.2021. No show cause was issued in the name of the legal heir neither 153C jurisdictional notice, which is a sine qua non in order to us emption of jurisdiction in a matter has been issued in the name of the legal heir of the assessee. The said notice 153C of the Act ought to have been issued by the Ld. AO when the fact of death of the assessee was brought to the notice by the legal heir of the assessee before him. Having not done so, the jurisdiction exercised by the Ld. AO in search matter under Section 153C is found to have no legal basis, as vehemently argued by him. In this regard he has relied upon very many judgments including the decisions in Savita Kapila v. ACIT [Delhi High Court – WP(C) 3258/2020]; v. Pranav Gupta [ITAT Delhi –ITA No. 2192/Del/2023 dated 20.06.2025].
The written submissions filed by the Ld. DR reads as under:
“Sub: Submission on behalf of the Department in the above-captioned appeal in respect of issue of initiating and conducting the assessment proceeding u/s 153C of the Act in the name of deceased Assessee-Reg. MAY IT PLEASE YOUR HONOURS' 1. The Assessee has raised the following ground , being Ground No.1, pertaining to the issue mentioned in the captioned subject -
1. On the facts and in law, the Assessing Officer has erred in initiating and conducting the assessment proceedings under Section 153C of the Act in the name of a deceased Assessee, rendering the entire proceedings a nullity in the eyes of law. The CIT(A) has further erred in failing to quash the same.
2. The Department's submissions in this regard are as under- 2.1. It is respectfully submitted that when the Assessing Officer was intimated about the death of the Assessee Sh. Pawn Kumar Gupta vide submission dated 31-01-2024, the assessing officer issued subsequent letters through legal heir of Sh. Pawn Kumar Gupta to file replies and in response the legal heir Smt. Saroj Gupta w/o Late Sh. Pawn Kumar Gupta filed the replies. Therefore, the legal heir knowingly participated in assessment proceedings. Also, the legal heir did not challenge the invalidity of notice u/s 153C of the Act during assessment proceedings. Thus, there was no prejudice caused to the legal heir and she was afforded enough opportunities by the assessing officer during assessment proceedings. The assessment order u/s 153C is also passed through legal heir Smt. Saroj Gupta. 2.2. Reliance is also placed upon Principal Commissioner of Income-tax V. Mahagun Realtors (P.) Ltd. [2022] 137 taxmann.com 91 (SC) [Copy
Enclosed] wherein Hon'ble Supreme Court has upheld the validity of an assessment conducted in the name of a non-existing Assessee (amalgamating company) on the facts where the amalgamated company participated in the assessment proceedings and no prejudice was shown. Death of an individual and amalgamation of a company are both forms of a "Person" ceasing to exist. Thus, in view of the ratio of the judgment Principal Commissioner of Income-tax V. Mahagun Realtors (P.) Ltd. [2022] 137 taxmann.com 91 (SC) the assessment order, dated 18-03-204, made u/s 153C of the Act in the name of Late Sh. Pawn Kumar Gupta through legal heir Smt. Saroj Gupta is valid and lawful.” 5.1 Ld. DR also referred to Section 292BB, which for the sake of ready reference is reproduced below:
“Notice deemed to be valid in certain circumstances. 292BB. Where an assessee has appeared in any proceeding or "co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.]” 5.2 It is the case of the Revenue as submitted by the Ld. DR that since the legal heir of the deceased assessee already participated in the proceedings the assessee is now stopped to raise the issue before any legal form. However, we find that the requirement of issuing notice under Section 153C on the legal heir is sine qua non entire proceeding is vitiated as per the ratio laid down by the different judicial forums.
Thus, having heard the respective submissions made on behalf of the parties and considering the facts and circumstances of the matter particularly having regard to the particular fact of notice under Section 153C admittedly once issued in the name of the deceased assessee and never thereafter issued in the name of the legal heir, respectfully relying upon the judgment discussed above, the entire proceeding is found to be vitiated and therefore, liable to be quashed. We order accordingly.
In the result, assessee’s appeals are allowed.
Order pronounced in open court on 13.01.2026.