Reopening assessment under Section 148 without fresh notice to legal heir is invalid after assessee's death

The ITAT Ahmedabad held that reopening an assessment under section 148 in the name of a deceased assessee is invalid if no fresh notice is issued to the legal heir. Informing the AO of the assessee's death and requesting to drop proceedings does not amount to participation under section 292B. Consequently, the reassessment notice issued to the deceased was held to be invalid. The appeal of the legal heir was allowed.

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ISSUES:

Whether a notice issued under section 148 of the Income Tax Act, 1961 in the name of a deceased person confers valid jurisdiction for reassessment proceedings.Whether the Assessing Officer can proceed with reassessment without issuing a fresh notice to the legal heir after being informed of the assessee's death.Whether reassessment proceedings initiated on the basis of a notice issued to a deceased person are legally sustainable or void ab initio.Whether provisions of section 292B and 292BB of the Income Tax Act cure jurisdictional defects arising from issuance of notice to a deceased person.Whether delay in filing appeal due to procedural formalities related to legal heir's PAN registration can be condoned.

RULINGS / HOLDINGS:

The notice issued under section 148 in the name of a deceased person is invalid and does not confer jurisdiction for reassessment proceedings; consequently, the reassessment order passed on such basis is void ab initio.The Assessing Officer is not justified in proceeding with reassessment without issuing a fresh notice to the legal heir as mandated by section 159(2)(b) of the Income Tax Act after being informed of the assessee's death.The reassessment proceedings initiated on the basis of a notice issued to a deceased person are legally unsustainable and liable to be quashed and set aside.The provisions of section 292B do not cure jurisdictional defects where the legal heir has not participated in the reassessment proceedings, and section 292BB does not apply to legal heirs who have not submitted to jurisdiction pursuant to the impugned notice.The delay of 9 days in filing the appeal was condoned due to the appellant's procedural difficulties in registering PAN as a legal heir, with no objection from the Revenue.

RATIONALE:

The Court applied the statutory framework of the Income Tax Act, 1961, particularly sections 144, 147, 148, 149(1)(b), 159(2)(b), 292B, and 292BB, emphasizing that issuance of a valid notice under section 148 is a jurisdictional prerequisite for reassessment under section 147.Judicial precedents were followed, including the Supreme Court ruling that notices issued to deceased persons are unenforceable and the reassessment orders passed thereon are nullities, as well as High Court decisions holding that reassessment notices must be issued to legal heirs to confer jurisdiction.The Court rejected the contention that delay in initiating reassessment was justified, noting the Assessing Officer's knowledge of the immovable property transaction and the delay until the limitation period was near.The Court underscored that legal heirs' non-participation in reassessment proceedings precludes application of section 292B's deeming provisions, and that reassessment must be initiated afresh against the legal heir within the prescribed limitation period.No dissent or doctrinal shift was noted; the judgment aligns with established principles protecting procedural fairness and jurisdictional limits in tax reassessment proceedings.

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