Assessment order against deceased person invalid without proper notice to legal representative under section 159

The ITAT Kolkata allowed the appeal challenging an assessment order where the AO issued a notice u/s 148 to a deceased person. The tribunal held that under section 159 of the Act, when an assessee dies, proceedings must be taken against the legal representative who is deemed to be an assessee. The AO failed to substitute the legal heir's name and issue proper notice u/s 148 to the legal representative. The assessment order was declared bad in law as it was neither issued to nor framed against any specific legal heir, making it unenforceable.

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Issues:
1. Validity of notice u/s 148 issued in the name of a deceased person.
2. Determination of legal heir for assessment proceedings.
3. Applicability of section 159 of the Income Tax Act.

Analysis:
1. The appeal was filed against the order of the National Faceless Appeal Centre passed under section 250 of the Income Tax Act. The deceased assessee, Sri Arjun Dass Agarwal, had his return of income processed under section 143(1) of the Act. After his death, the Assessing Officer issued notices to the deceased and later to his legal heir without proper verification. The legal heir, Sri Vivek Agarwal, repeatedly informed the Assessing Officer of his status and lack of liability. Despite this, the assessment was finalized only in the name of 'The Legal Heir Late Arjun Dass Agarwal.'

2. The appeal before the CIT(A) was dismissed on the grounds that there was no determined legal heir of the deceased at that time. Subsequently, an order by the 8th Additional District Judge appointed Sri Vivek Agarwal as the administrator of the estate. The appeal was then filed by the Estate of Arjun Das Agarwal through Sri Vivek Agarwal, challenging the dismissal by the CIT(A) based on the appointment of the administrator.

3. The Tribunal considered the provisions of section 159 of the Income Tax Act, which state that the legal representative of a deceased person shall be liable to pay any sum the deceased would have been liable to pay. The Tribunal noted that the Assessing Officer did not follow the procedure outlined in section 159, which requires the substitution of the legal heir's name in place of the deceased for tax liability purposes. As a result, the assessment order was deemed void due to the notice being issued in the name of a dead person and the failure to properly identify and involve the legal heir in the proceedings. The Tribunal allowed the appeal, quashing the assessment order.

In conclusion, the Tribunal found that the assessment order was invalid due to procedural errors in identifying and involving the legal heir of the deceased assessee. The appeal was allowed, and the assessment order was quashed.

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