Assessment order against deceased assessee quashed for failure to bring legal heirs on record under section 263

The ITAT Ahmedabad quashed an assessment order issued under section 263 against a deceased assessee. The AO was aware of the assessee's death on 07.06.2017 through a death certificate but proceeded to issue the order in the deceased's name. The tribunal held that the AO failed to provide opportunity to bring legal heirs on record and proceed according to law. The assessment order was deemed non-est in law and liable to be quashed, deciding in favor of the assessee.

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Issues:
The case involves an appeal against an order passed under Section 143(3) r.w.s. 263 of the Income Tax Act, 1961 for Assessment Year 2012-13, where the assessment was made in the name of a deceased person.

Details of the Judgment:

Issue 1: Assessment in the name of deceased person

The appeal was filed against an order passed by the ACIT in the name of a deceased person, Late Paras Chinubhai Jani. The assessee argued that the entire proceeding was vitiated due to the assessment being made in the name of a deceased person. The CIT(A) considered this ground and opined that the mistake was curable under Section 292BB of the Act. However, the appellant contended that this provision was not applicable as it pertains to the service of notice, not the finalization of assessment. The appellant relied on a judgment by the Jurisdictional High Court, which held that issuing notice to a deceased assessee renders the assessment null and void. The tribunal considered this argument and found that the assessment order in the name of the deceased was non-est in the eyes of the law, following the precedent set by the High Court.

Issue 2: Validity of Notice

The tribunal referenced the judgment in Krishnaawtar Kabra case, which highlighted that issuing a notice to a deceased assessee is a nullity and affects the jurisdiction of the Assessing Officer. The absence of a valid notice renders the assessment invalid and without jurisdiction. The tribunal noted that the assessment order under Section 143(3) r.w.s. 263 of the Act was issued in the name of the deceased assessee, despite knowledge of the death and the submission of the death certificate. The tribunal concluded that the assessment order was non-est in the eyes of the law and, therefore, quashed it based on the principles established in the Krishnaawtar Kabra case.

Decision:
The tribunal allowed the appeal of the assessee, ruling in favor of quashing the assessment order issued under Section 143(3) r.w.s. 263 of the Act, as it was made in the name of the deceased assessee. The tribunal emphasized the importance of following legal procedures and ensuring the proper representation of the legal heir in assessment proceedings.

This Order was pronounced on 23/02/2024.

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