2025 (12) TMI 1640 - AT - Income Tax

Income tax notice under s. 143(2) sent to deceased taxpayer, leading to s. 144 assessment-proceedings quashed as void.

The dominant issue was whether a notice u/s 143(2) and a best-judgment assessment u/s 144 issued/passed in the name of a deceased assessee were valid. The ... Validity of notice issued u/s 143(2) as well as the assessment order passed u/s 144 in the name of deceased assessee - HELD THAT:- Proceedings have been undertaken in the name of dead person. The statutory notice u/s 143(2) of the Act dated 24.08.2016, which enables the AO to carry out assessment was issued on the person who expired on 14.04.2016. Therefore, no assessment could have been undertaken without curing the notices and show cause letters etc. It is well settled that notice issued on a dead person is not valid and the consequential assessment or re-assessment order also does not survive. Hon’ble Bombay High Court in case of Sumit Balkrishna Gupta [2019 (2) TMI 1209 - BOMBAY HIGH COURT] held that a notice issued u/s 143(2) of the Act, which gives jurisdiction to complete assessment, having been issued in the name of a dead person, is non est in law and is not saved even by section 292B of the Act. The Hon’ble jurisdictional High Court in cases of Nishant Daxeshbhai Mehta [2023 (5) TMI 795 - GUJARAT HIGH COURT] held that any notice issued in the name of dead person is unenforceable and invalid. The Hon’ble Supreme Court in case of CIT vs. Amarchand N. Shroff [1962 (10) TMI 51 - SUPREME COURT] held that the individual assessee must be a living person, and no assessment can be made on a dead person. Notice issued u/s 143(2) of the Act as well as the assessment order passed u/s 144 of the Act is not liable to be sustained - Appeal of the assessee is allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether assessment proceedings initiated and continued on the basis of a statutory notice issued under section 143(2) in the name of a deceased assessee are legally valid, and whether the consequential ex parte assessment under section 144 can survive. (ii) Whether subsequent notices (including under section 142(1) and show cause notices) and the appellate proceedings/order passed in the name of the deceased assessee are a nullity, warranting quashing of the appellate order as well. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Validity of jurisdictional notice under section 143(2) issued to a deceased person and sustainability of assessment under section 144 Legal framework (as discussed by the Tribunal): The Tribunal treated the notice under section 143(2) as the statutory notice 'which enables the AO to carry out assessment', i.e., a jurisdictional foundation for completing the assessment. The Tribunal also considered whether such a defect could be cured, noting that a notice issued on a dead person is not saved even by section 292B, as applied in the reasoning adopted by the Tribunal. Interpretation and reasoning: The Tribunal found as a fact that the assessee had died prior to issuance of the section 143(2) notice, and that the Assessing Officer was intimated of the death during assessment proceedings (and the fact of such intimation was acknowledged in the assessment order). Despite this, the section 143(2) notice was issued in the name of the deceased. The Tribunal held that once the foundational notice is issued to a dead person, the assessment cannot be undertaken 'without curing the notices', and proceedings founded upon such invalid notice are unenforceable. The Tribunal treated the defect as going to the root of jurisdiction, rendering the entire assessment proceedings void. Conclusion: The Tribunal conclusively held that the notice under section 143(2) issued in the name of a deceased person is invalid and non est, and therefore the consequential assessment order passed under section 144 cannot be sustained. Both the section 143(2) notice and the section 144 assessment order were quashed. Issue (ii): Effect of conducting further proceedings and passing appellate order in the name of the deceased assessee Legal framework (as discussed by the Tribunal): The Tribunal proceeded on the settled principle, applied to the facts before it, that 'any proceedings against a dead person is a nullity,' including statutory notices and consequential orders issued in the name of a deceased individual. Interpretation and reasoning: The Tribunal recorded that, even after knowledge of death, various notices under section 142(1) and show cause notice were issued in the name of the deceased assessee. It further found that the appellate authority also issued notices under section 250 in the name of the deceased and ultimately passed the appellate order in the deceased's name, rather than in the name of the deceased represented through the legal heir. Given the Tribunal's determination that the assessment itself was void for being founded on an invalid jurisdictional notice and that proceedings against a dead person are null, it held that the appellate order could not stand. Conclusion: The Tribunal quashed the appellate order as well, holding that the proceedings having been undertaken in the name of a dead person were legally unsustainable and a nullity.