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Facts
The Revenue filed an appeal against the CIT(A)'s order which quashed a reassessment order for AY 2009-10. The assessee, Shri Vinod Choudhary, passed away on January 20, 2016, but the reassessment notice under Section 148 of the Income Tax Act, 1961, was issued in his name on February 18, 2016 (or March 3, 2016). Despite the legal heirs informing the Assessing Officer about the demise, no remedial action was taken to re-issue the notice to the legal representatives, and the assessment order was passed in the name of the deceased.
Held
Both the CIT(A) and the ITAT held that a reassessment notice issued under Section 148 of the Act to a deceased person is invalid, rendering the entire reassessment proceedings null and void. The ITAT affirmed that it is not the legal heir's duty to inform the Revenue authorities of the assessee's death, and since no valid notice was issued to the legal heir, the proceedings were vitiated. The Tribunal upheld the CIT(A)'s decision.
Key Issues
The primary legal issue is the validity of a reassessment notice issued under Section 148 of the Income Tax Act, 1961, to an individual who was already deceased at the time of issuance, and the consequential legality of the reassessment proceedings.
Sections Cited
143(3), 147, 148, 142(1), 159, 292BB
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Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: Ms. MADHUMITA ROY & SHRI NAVEEN CHANDRA
O R D E R
PER Ms. MADHUMITA ROY, JM:
The instant Revenue’s appeal is directed against the order dated 01.02.2024 (DIN & Order No. ITBA/NFAC/S/250/2023-24/1060388071(1) passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 26.12.2016 passed by the ITO, Ward-52(2), New Delhi under Section 143(3) r.w.s.
147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for Assessment Year 2009-10.
1(a) The Ld. CIT(A) has erred in not appreciating the fact that assessment was made not on a dead person but it was made in the name of Sh. Vinod Choudhary (deceased) through S.C. Nanda, Advocate, the Executor of the deceased person. (b) The Ld. CIT(A) has erred in not appreciating the fact that during the course of assessment proceedings the AR of the assessee filed a copy of Will which was clearly depicting the fact that Sh. S.C. Nanda, Advocate was appointed as Executor by the deceased assessee for all the legal proceedings Ground 2 (c) The Ld. CIT(A) has erred in not appreciating the fact that the return with reference to notice u/s 148 of the Act was aiso filed by Sh. S. C. Nanda, Advocate who appointed as Executor by the deceased assessee for all the legal proceedings. (d) The ld. CIT(A) has erred in not appreciating the fact that during the assessment proceedings the CA attended the proceedings and this CA was given POA by Sh. S. C. Nanda. Advocate who has appointed as Executor by the deceased assessee for all the legal proceedings. 3 (e) The Ld. CIT(A) has erred in not appreciating the fact that during assessment proceedings, Sh. S.C. Nanda (appointed as Executor by the deceased assessee for all the legal proceedings) given letter dated 22.11.2016 and submitted therein that in his legal capacity being executor of the Will of Sh. Vinod Choudhary, he has all the authority and power to perform all the acts and deeds of Sh. Vinod Choudhary (deceased person) and he is lawfully competent to perform as his Executor. (f) The Id. CIT(A) has erred in not appreciating the fact that during the assessment the validity of notice u/s 148 of the Act never challenged (g) The appeal before CIT(A) was filed by Legal Heir appointed by order of Delhi High Court vide order dated 30.01.2017. However, Id. CIT(A) has erred in ignoring the Will of deceased assessee which appointed S.C. Nanda (Advocate) as the executor of this Will.”
The short issue for adjudication in the instant Revenue’s appeal is as to whether the Ld. CIT(A) is right in holding the notice issued under Section 148 of the Act as invalid, having been issued in the name of a dead person, and consequently treating the reassessment order as null and void. treating the reassessment as null and void, inter alia, by observing as under:
“7. During the appellate proceedings, ……. the legal heir of the appellant has challenged the very validity of the notice dated 18.02.2016 issued u/s 148 of the Act. Accordingly, the said issue is taken up for adjudication first. 7.1 Submissions filed by the legal heir of the appellant and the copy of the death certificate filed along with, shows that the appellant had passed away on 20th January 2016. A perusal of the assessment order further shows that the AO himself has not disputed the fact that the AR of the assessee attended the hearing on 22.11.2016 and explained that the assessee had expired on 20.01.2016. The AR also submitted a copy of the death certificate of the assessee, Shri Vinod Choudhary bearing No. SA-1346189 dated 29.01.2016 issued by the Sub- Registrar/Registrar of Estate, South Delhi Municipal Corporation, New Delhi, in support thereof. The relevant extract at Para No. 5 of the said assessment order is reproduced hereunder for better appreciation of facts:- 5. Notice u/s 142(1) of the I.T. Act was issued alongwith questionnaire on 01.08.2016 and 25.10.2016, requiring the assessee to furnish a copy of the return of income. In response to the notices, Sh, Sumit Siwal, C.A. and A.R. of the assessee attended on 22 11.0216 and explained that the assessee Sh. Vinod Choudhary left for heavenly abode on 20.01.2016 in support thereof he sübmitted a photocopy of the death certificate No. SA-1346189 dated 29.01.2016 issued by Sub- Registrar/Registrar of Estate, Govt. of National Capital Territory of Delhi, South Delhi Municipal Corpn., New Delhi. 7.2 In addition the appellant has also filed the copy of letter dated 22.11.2016, obtained from the records of the AO and certified as true copy by the AO, vide which the AO was provided with the complete details of all the legal heirs of estates of Late Shri Vinod Chaudhary, the assessee.
7.3 She has also relied on the following case laws, the relevant extract of which was made part of her submissions, in support of the contention that the notice issued in the name of a dead person is not a valid notice: ……. ……. . 7.6 As a dead individual is not a person in the eyes of law, assessment or reassessment proceedings or subsequent proceedings taken in his name will be invalid. The Department must bring all the legal representatives on record and continue proceedings against them as required under and in accordance with section 159 of the Act, which provides that any re- assessment proceeding taken against the deceased before his death may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased and accordingly. all the provisions of this Act shall apply to that legal representative. No assessment or reassessment proceedings or subsequent proceedings can be undertaken against a dead person. In the instant case despite the fact all the legal heirs was provided to the AO, no remedial measures were taken by the AO to regularize the reassessment proceedings. 7.7 Reliance is also placed on the Hon'ble High Court of Bombay's decision in the case of Devendra vs. Addl./Joint Commissioner of Income Tax [2023] 153 taxmann.com 520 (Bombay) dated 13.07.2023, wherein after discussing decisions of various High Courts on the issue of validity of notice issued in the name of dead person, the Hon'ble Court held that the notice issued on dead person or re-opening of assessment of a dead person is null and void, and the notice and all the consequential proceedings in the name of the deceased assessee are null and void. 7.8 In view of the submissions filed by the legal heir of the appellant, the supporting documents filed along with, reliance placed by her on various decisions and the provisions of Sec. 148/292BB of the Act, it is held that the notice dated 18.02.2016 issued u/s 148 of the Act, being issued in the name of a dead person is not a valid notice. Consequently, the entire reassessment proceedings initiated by the AO is bad in law. As a result, the re-assessment 26.12.2016 becomes null and void, and all the three grounds, vis. 1, 2 & 7 raised by the appellant are hereby allowed.”
Aggrieved, the Revenue is in appeal before us. For the first time it appears from page 8 of the paper book filed by the Learned DR that notice under Section 148 was issued on 03.03.2016. The moot question before us is as to whether the 148 proceeding is sustainable in the eyes of law when admittedly the notice under Section 148 of the Act has been issued in the name of the deceased person.
None appears on behalf of the assessee inspite of notices being sent on very many occasions and thus as the matter was before us for a long time we have preferred to finalize the issue in the absence of the assessee.
Further fact, as revealed from the paper book filed by the Learned DR is that the firm namely Ramesh Gupta & Co. brought to the notice of the Assessing Officer on 22.11.2016 of the fact of assessee’s demise on 22.1.2016. It further appears from the paper book that on 22.11.2016 two notices were issued, one in the name of Shri N.C. Nanda, Advocate who happens to be the sole executor of the Will of the deceased assessee and the other was issued in the name of the deceased assessee. It is a fact that Shri Nanda filed his return of income on 22.11.2016 in the reassessment proceedings initiated against the deceased assessee. Before us the Department has not been able to show a single document through which it appears that notice under Section 148 of the Act has been issued and served either in the name of Smt. Shalini Sharma Choudhry who in terms of the order passed by the Court has been found to be the legal heir of the assessee. In fact the assessment order as passed on 26.12.2016 in the name of Shri Vinod Chaudhry, deceased through Shri N.C. Nanda, Advocate, the executor of the Will of the deceased person and the appellate order was in the name of Smt. Shalini Sharma Choudhry when none of these persons were issued any notice under Section 148 of the Act which ought to have been done in order to assume jurisdiction by the Learned Assessing Officer for initiating the reassessment proceedings against the deceased assessee. In our considered opinion the entire proceeding is, thus, vitiated and therefore, liable to be quashed.
In this regard the Learned DR relied on the ratio of decision of Hon’ble Supreme Court in the case of Mahagun Realer Pvt. Ltd. (2022) 443 ITR 194(SC) facts of which are completely different as it appears from the order passed by the Hon’ble Supreme Court the matter relates to amalgamation and in our considered opinion as the fact is completely different from the facts of the case before us, the said judgment is not applicable rather the order passed by the Hon’ble Jurisdictional High Court in the cases of Braham Prakash v. ITO (2005) 275 ITR 242; Savita Kapila v. ACIT (2020) 426 ITR 502; and Vipin Walia v. ITO (2016)
382 ITR 19 laid down the ratio that it is neither the duty incumbent upon the legal heirs of the assessee to intimate the death of the assessee to the Revenue Authorities and therefore, initiation of the reassessment proceedings under Section 148 of the Act in the case in hand and finalization of the same in the name of the deceased assessee in effect instead of notice under Section 148 in the name of the legal heir of the assessee namely Smt. Shalini Sharma Choudhry, the entire proceedings are found to have been vitiated and therefore, quashed. The order of the Learned CIT(A) being in conformity with the decisions of higher forms, is upheld.
In the result, Reenue’s appeal is dismissed.
Order pronounced in open court on 19.12.2025.