2025 (8) TMI 435 - AT - Income Tax

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 ... Reassessment order passed in the name of a deceased person - as submitted AO was informed about the death of the assessee and no fresh notice u/s 148 was issued to the legal heir - curable defect u/s 292B or not? - HELD THAT:- The Jurisdictional High Court in the case of Chandreshbhai J Patel vs. Income Tax Officer [2019 (1) TMI 353 - GUJARAT HIGH COURT] held that where original assessee died and thereafter AO issued notice u/s.148 in his name to reopen assessment and petitioner being heir and legal representative of deceased raised an objection that assessee had already expired and, therefore, notice in his name was not valid, merely because petitioner had informed AO about death of assessee and asked him to drop proceedings, it could not be construed that petitioner had participated in proceedings and, therefore, provisions of section 292B would not be attracted and notice under section 148 was to be treated as invalid. Reopening of assessment made in the hands of the dead person is invalid in law - Assessee appeal allowed. 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.