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Judgment
PER MANISH AGARWAL, A.M.:
The present appeal is filed by the assessee against the order dated 30.10.2025 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2014-15/10428856 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 20.03.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act pertaining to Assessment Year 2015-16.
Brief facts of the case are that the case of the assessee was re-opened vide notice issued on 03.04.2022 after passing the order u/s 148A(d) of the Act wherein it was stated that assessee has sold the property for INR 1,49,40,000/-and has not submitted any return of income. Therefore, this amount of Short Term Capital Gain (“STCG”) remained to be taxed.
In the first appeal, Ld. CIT(A) has confirmed the addition and dismissed the appeal of the assessee.
Aggrieved by the said order, assessee filed an appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo. From the orders of both the lower authorities, it is observed that both the orders are passed ex-parte.
Before us, in support of the Ground of appeal No. 1 of the assessee, Ld. Counsel for the assessee submits that assessee was died on 14.10.2015 and the copy of Death Certificate is placed before us. He submits that the proceedings u/s 148 were initiated and the assessee was also died and therefore, without bringing on record the Legal Heir of the assessee, reassessment proceedings initiated on the dead person is bad in law and thus the consequent order passed be quashed.
On the other hand, Ld. Sr. DR for the Revenue submits that that the Revenue was not in possession of the information that the assessee is died on 14.10.2015 therefore, in absence of such information, the AO has rightly passed the order which deserves to be uphold.
We have carefully considered the rival submissions and perused the material on record. The appellant was expired on 14.10.2015 and thereafter, no ITR was filed. However, despite of this fact, notice under Section 148 dated 03.04.2022 was issued by the AO in the name of the deceased assessee and the jurisdiction to assess the income of the deceased assessee u/s 147 was assumed. Under the circumstances, where the assessee has died prior to issue of notice u/s 148 of the Act, the issuance of notice u/s 148 and further u/s 143(2) in the name of the dead person is void ab initio and devoid of legal sanction.
The Hon’ble Delhi High Court in the case of Dharamraj vs. ITO in WP (C) 9227/2021 vide order dated 17.10.2022 has examined the issue in length and held that the notice issued against a dead person is null and void and all consequent proceedings/orders passed being equally tainted are liable to be set aside. The relevant operative paragraph in Dharamraj’s case is reproduced herein for the sake of completeness of the point.
“8.The issue of val idity of a notice and proceedings held subsequent thereto against a dead person is no longer res integra. This Court in Savita Kapila vs. Assistant Commissi oner of Income-Tax, in W.P. (C) N o.3258/2020 has held as under:
"AN ALTERN ATIV E STATUTORY REMEDY DOES NOT OPERAT E AS A B AR T O MAINTAIN ABILITY OF A WRIT PETITION WHE RE T HE ORDER OR N OTICE OR PR OC EEDINGS ARE WHO LLY WITHOUT JURISDICTION. IF THE ASSESSING OFFI CER HAD NO JURISDICTION TO IN ITIATE ASSESSMENT PRO CEEDINGS. THE MERE FACT THAT SUBSEQUENT ORDERS HAVE BEEN PASSED WOULD NOT REN DER THE C HALLENGE T O JURISDICTION INFR UCTUOUS.
24.Further, the fact that an assessment order has been passe d and it is open to challenge by way of an appeal, does not denude the peti tioner of its right to challenge the notice for assessment if it i s without jurisdic tion. I f the assumption of j urisdiction is wrong, the assessment order passed subsequent would have no le gs to stand. If the notice goes, so does the order of assessment. It is trite law that if the Assessing Officer had no juri sdict ion to initiat e assessment proceeding, the mere f act that subsequent orde rs have been passed would not re nder the c hallenge to jurisdiction infructuous. xxxxx THE SINE QUA NON FOR ACQUIRING JURISDICTION TO REOPE N AN ASSE SSMENT IS T HAT NOTICE UNDER SECTION 148 SHOULD BE ISSUED TO A COR RECT PERSO N AND NOT T O A DEAD PERSON. CONSEQUENTLY. THE JURISDICTIONAL REQUIREMENT UNDER SECTI ON 148 OF T HE ACT. 1961 OF SERVIC E OF NOTICE WAS NOT FULFILLED IN THE PRESENT I NSTANCE. xxxxx
26.In the opinion of this Court the issuanc e of a noti ce under Section 148 of the Act is the foundation for reopening of an assessment. Consequently, the sine qua non for acquiri ng jurisdiction to reopen an assessment is that such not ice should be issued in the name of the correct person. This require ment of issui ng notice to a correct person and not to a dead person is not merely a procedural requirement but is a con dition precedent to the i mpugned notice be ing valid in law. [See Sumit Balkrishna Gupta v. Asst Commissioner of Income Tax, Circl e 16(2), Mumbai & Ors., ( 2019) 2 TMI1209- Bo mbay High Court],
27.xxxxx Consequently, in view of the a bove, a reopening notice under Section 148 of t he Act, 1961 issued in the name of a deceas ed assessee is null and void. XXXX.XX
AS IN T HE PRESENT C ASE PROC EEDINGS WERE NOT INITIATED/PENDI NG AGAINST THE ASSESSEE WHEN HE WAS ALIVE AND AFTER HIS D EAT H THE LEG AL REPR ESENTATIVE DID NOT STEP INT O THE SHOES OF T HE DECEASED ASSESSEE. SECTI ON 159 OF THE ACT. 1961 DOES NOT APPL Y T O T HE PRESENT CASE.
30.Section 159 of t he Act, 1961 applies to a situation w here proceedings are initiated/pending against the assessee when he i s alive and after his death the legal representative steps into the shoes of the deceased assessee. Since that is not the present factual scenario, Section 159 of the Act, 1961 does not apply to the present case. 31. xxxxx
THERE IS N O S TATUTORY REQUIREMENT IMPOSING AN OBLI GATION UPON LEGAL HEIRS TO INTIMATE THE DEAT H OF THE ASSESSEE.
32.This Court is of the view that in the absence of a statutory provision it is difficult to cast a duty upon the legal representati ves to intimate the factum of death of an assessee to the income t ax department. After a ll, there may be cases where the l egal repre sentatives are e stranged fro m the deceased assessee or t he deceased assessee may have bequeathed his entire wealth t o a charity. Consequently, whether PAN record was updated or not or whether the Depart me nt was made aware by the legal representatives or not is irrelevant. In Alamelu Veerappan (supra) [2018 (6) TMI 760 - Madras Hi gh C ourt] i t has been held“nothing has bee n placed before thi s Court by t he Revenue to sho w that there is a statutory obligation on the part of the legal representatives of the deceas ed assessee to immediat ely i ntimate the death of the assessee or t ake st eps to cancel t he PAN registration. ” xxxxx
34.Consequently, the l egal hei rs are under n o statut ory obligation to intimate the death of the asse ssee to the Reve nue.
SECTI ON 292B OF THE ACT. 1961 HAS BEEN HELD T O BE INAPPLICABLE. VIS- A- VIS. N OTICE ISSUED TO A DEAD PERSON IN RAJ EN DER KUM AR SEHGAL 12018 ( 12) TMI 697 ( DELHI)]. CHANDRES HBHAI JAYAN TIBHAIPATEL 12019 (I) TMI353 -GUJARAT HI GH COURT1 AND ALAMELU VEERAPPAN f2018 (6) TMI 760 - MADRAS H IGH CO URT 1.
35.This Court is of the opinion that issuance of notice upon a dead person and non-service of notice does not come unde r the ambit of mistake, defect or o mission. Consequently, Section 292B of the Act, 1961 does not apply t o the present case.
IN RAJIN DER KUMAR SEH GAL (SUPRA) A COORDINATE BENCH OF THIS COURT HAS HELD T HAT SECTI ON 292BB OF THE ACT 1961 IS APPLI CABLE TO AN ASSESSEE AND N OT TO A LEG AL REPRESE NTATIVE. xxxxx
38.This Court is also of the view that Sect ion 292BB of the Act, 1961 is applicabl e to an assessee and not t o a legal representati ve. Further, i n the present case one of the le gal heirs of the dece ased assessee, i.e. the petitione r, had neit her cooper ated in the assessment proceedin gs nor f iled return or waived t he requirement of Section 148 of the Act, 1961 or submitted to jurisdiction of the Assessing Officer. She had merely uploaded the death certificate of the deceased assessee . Xxxxxx
40.Consequently, the applicability of Section 292BB of the Act, 1961 has been held to be attracted to an assessee and not t o l egal repre sentatives. ”
9.The above judgment was followed by this Court i n W.P.(C) No.2678/2020 titled Mrs. Sripathi Subbaraya Manohara L/H Lat e Sripathi Subbar aya Gupta vs. Principal Commissi oner of Inco me Tax 22, N .Delhi & Anr.
10.In the present case also, as the notice unde r Section 148 of the Act was issue d against a dead person, the same is null and void an d al l consequent proceedings/orders, incl uding t he assessment order and the subsequent notices, be ing equally tainted, are liable to be set aside.
11.Consequently, the impugned not ice da ted 30.03.2019 issue d under Section 148 of the Act is set aside along with all c onsequential proceedings/noti ces/assessment orders.
12.The petition is allowed. T he re shall be no order as to costs.”
The Hon’ble Delhi High Court has earlier expressed the aforesaid view in Braham Prakash vs. ITO reported in 275 ITR 242 (Del). Similar view has been consistently expressed in plethora of other judgments of different High Courts as well as Co-ordinate Benches of Tribunal.
In terms of the explicit observations made in the aforesaid judgment of the Hon’ble Delhi High Court, we find considerable merit in the legal ground raised on behalf of the legal heir for the assessee that the entire proceedings beginning from issuance of notice u/s 148 and culminating in reassessment order passed u/s 147 r.w.s. 144B of the Act is a nonest exercise and cannot be given effect in law and the same is thus quashed.
In view of the above finding, the reassessment order in question itself is found to be bad in law, therefore, other grounds on aspects of merits are not required to be looked into.
In the result, appeal filed by the Assessee is allowed.