ITO, Ward-50(1) vs Shiv Charan Gupta

PER ANUBHAV SHARMA, JM:

This appeal and cross objection preferred by the revenue and assessee against the order dated 25.06.2025 of Ld. National Faceless Appeal Centre, (NFAC) Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in DIN & Order No : ITBA/NFAC/S/250/2025-26/1077772168(1) arising out of the assessment order dated 19.12.2019 u/s 144 the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ITO, Ward 50(5) Delhi, for AY: 2017-18.

At the time of hearing it was pointed out that there is a delay in filing of the appeal by the department and the delay is of 31 days and an application for condonation of delay is filed. The delay is accordingly condoned as it is not a substantial period and appeal is admitted for hearing.

Then at the time of hearing it came up that assessee had filed cross objection and the primary ground being No. 1 which is reproduced below:

Though ld. DR has opposed the ground submitting that AO was never informed of death of assessee what we find is that assessee Sh. Shiv Charan Gupta had expired on 05.04.2017 as reflected by copy of death certificate available PB 6 and thereafter, the legal heir Sh Jagdish Prasad Gupta, who has now filed the CO, was registered on portal of Department on 30.10.2017 by the department for making compliances on behalf of deceased assessee. The legal heir immediately after registration has e-filed return of income of deceased assessee in status of legal heir of deceased assessee for AY 2017-18 on 01.11.2017 as reflected in ROI at PB 7.

Despite aforesaid the re-assessment proceedings were initiated in the name of deceased assessee by issue of notice dated 26.09.2018 U/s 143(2) of the Act by the Ld AO and also the consequent assessment order was also passed in the name of the deceased assesse and not in the name of legal heir.

It is a settled legal principle of law that a notice or order issued or passed in the name of the dead person is legally not enforceable in law and in fact the legal heirs are under no statutory obligation to intimate the death of the appellant to the revenue. Reliance for this can be placed on the decision of Hon’ble jurisdictional Delhi High Court in the case of Savita Kapila LH of Late Sh Mohinder Paul Kapila vs ACIT W.P.(C) 3258/2020 dt: 16.07.2020 and of Late Sh Lal Chand Verma though his legal heir vs UOI W.P.(C) 8184/2023 dated 08.01.2025. Hon'ble Madras High Court in the case of Alamelu Veerappan v. ITO 304 CTR512 (Mad) has held that Reassessment Notice issued in name of dead person is not enforceable in law and there is no statutory obligation on part of legal representative of deceased to intimate death of assessee or take steps to cancel PAN registration.

Reliance by ld. DR on section 292B of the Act is also not sustainable this is not mere irregularity in issuance of notice but actually a case of non issuance of the notice itself on assessee. The information made available to AO of the fact of death of assessee and subsequent assessment order when passed on deceased assessee is certainly a case of passing order on non-existent assessee and such an order is vitiated for which reliance is placed on Hon’ble Supreme Court decision in PCIT vs. Maruti Suzuki India Limited (SC) in Civil Appeal No 5409 of 2019 dt: 25.07.2019.

We are thus inclined to allow the grounds raised in cross objection. Consequently the impugned re-assessment order deserves to be quashed. The cross objections are sustained and same stands allowed. Resultantly the appeal of revenues is dismissed.