Reopening of assessment in deceased's name upheld as informed legal heir ignored notices under Sections 147 and 148

ITAT Kolkata upheld the reopening and completion of assessment made in the name of a deceased assessee, holding that the legal heir was duly informed and repeatedly requested to furnish details for being brought on record but chose not to cooperate. The Tribunal noted that the legal heir had communicated the death and was aware of the proceedings, yet failed to respond to subsequent emails and letters. As CIT(A) had already restored issues to the AO for readjudication and the Revenue had not appealed that relief, ITAT found no ground to interfere. The appeal by the assessee (through legal heir) was dismissed.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether the assessment framed in the name and PAN of a deceased assessee, after intimation of death by the legal heir, is invalid and liable to be quashed.

1.2 Whether the non-cooperation of the legal heir, despite specific notices and requests to come on record, affects the validity of the assessment and the assessee's claim to relief.

1.3 Whether the decisions of the High Courts and CBDT circulars/orders relied upon by the assessee render the assessment order or the first appellate order invalid.

1.4 Whether the Tribunal, in an appeal filed by the assessee alone, can interfere with or curtail the relief already granted by the first appellate authority in setting aside the assessment for readjudication.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of assessment framed in the name of a deceased assessee

Interpretation and reasoning

2.1 The assessment order records that the Assessing Officer was informed by the wife of the deceased assessee, and furnished with the death certificate, that the assessee had expired. The Assessing Officer also sent an email requesting her to bring the legal heirs on record, and later issued a further letter, both of which remained uncomplied with. Left with no cooperation from the legal heir, the Assessing Officer completed the assessment in the name of the deceased on the original PAN.

2.2 The Tribunal noted that the legal heir, having assumed the status of legal heir for the purposes of litigation, chose not to cooperate during assessment proceedings, which was characterised as contumacious conduct. The Tribunal viewed that due taxes are required to be recovered and the department cannot be expected to be deprived of lawful tax due merely because of such non-cooperation.

2.3 The Tribunal also observed that the provisions of section 159 of the Act, providing for bringing legal representatives on record, exist in the statute and therefore the argument that there is no provision for assessing legal heirs "does not stand to a reason".

Conclusions

2.4 In the facts where the legal heir was aware of the proceedings, was called upon to come on record and to furnish details, but failed to cooperate, the assessment could not be treated as invalid solely because it was framed in the name of the deceased, and the assessee was not entitled to the relief of quashing the assessment on that ground.

Issue 2: Effect of non-cooperation by legal heir on entitlement to relief

Interpretation and reasoning

2.5 The Tribunal found that the legal heir had full knowledge of the reassessment and assessment proceedings, as indicated by her letter intimating death and supplying the death certificate, and by the subsequent email and letter addressed to her by the Assessing Officer.

2.6 Despite such knowledge and specific requests to bring the legal heirs on record, the legal heir did not respond. The Tribunal considered this conduct as deliberate non-cooperation intended to avoid assessment while later asserting legal heir status to seek relief in appeal.

2.7 The Tribunal emphasised that while the assessee seeks justice from the tax authorities, there is a corresponding obligation to cooperate; the legal heir cannot claim benefit from her own non-cooperation.

Conclusions

2.8 The non-cooperation of the legal heir, despite due notice, disentitled the assessee to further relief beyond what was already granted by the first appellate authority, and the assessment could not be set aside merely on technical grounds in such circumstances.

Issue 3: Applicability of cited High Court decisions and CBDT circulars/orders

Legal framework discussed

2.9 The Tribunal considered the Delhi High Court decision holding that there is no statutory obligation on legal heirs to intimate death of an assessee, and the Rajasthan High Court decision reiterating the principle that no tax can be imposed without clear words in the statute, as well as CBDT circulars/orders regarding (a) conduct of personal hearings and (b) procedure in faceless assessments where PAN is not available.

Interpretation and reasoning

2.10 The Delhi High Court decision was distinguished on facts. In that case the assessment had been framed on the deceased without any notice or request to the legal heir to come on record. In the present matter, there were repeated requests from the revenue to the legal heir to furnish details and to be brought on record, which went unanswered; hence, the ratio of that decision was held inapplicable.

2.11 The Rajasthan High Court decision was found not to support the assessee. The Tribunal held that, in view of section 159 of the Act providing for assessment of legal representatives, there is statutory authority to levy tax through the legal heir, and thus the argument that there is no provision to bring legal heirs on record was contrary to the statute and to the said High Court's own principle.

2.12 As to the CBDT circular and section 119 order, the Tribunal observed that these related to the procedure for handling assessments by jurisdictional and faceless assessing officers, including when PAN is not available. In the present case, the jurisdictional officer had issued notices, the PAN of the legal heir was available, and the legal heir had deliberately not cooperated. Therefore, the said circulars and orders did not render the assessment or appellate orders invalid or confer any substantive benefit on the assessee.

Conclusions

2.13 The judicial precedents and CBDT circulars/orders relied upon by the assessee were either inapplicable on the facts or, in view of section 159, did not assist the assessee's contention that the assessment was without authority of law. They did not justify quashing the assessment or the appellate order.

Issue 4: Scope of Tribunal's interference with the relief granted by the first appellate authority

Interpretation and reasoning

2.14 The first appellate authority had set aside the assessment to the Assessing Officer for readjudication in accordance with law, thereby granting the assessee another opportunity. The assessee alone appealed before the Tribunal; the revenue did not challenge the set-aside direction.

2.15 The Tribunal held that, as the first appellate authority had already restored the issues to the Assessing Officer for fresh adjudication, and the revenue had not appealed against that direction, the Tribunal could not, in an appeal by the assessee, deny or curtail that relief.

2.16 Considering the conduct of the legal heir and the fact that appropriate notices had already been issued and PAN of the legal heir was available, the Tribunal found no ground to grant any relief beyond what the first appellate authority had already allowed.

Conclusions

2.17 The Tribunal upheld the order of the first appellate authority restoring the matter to the Assessing Officer for readjudication, found that no further relief was due to the assessee, and consequently dismissed the appeal.

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