Validity of notice under section 153A served in deceased taxpayer's name held invalid; assessment set aside on that basis

Notice under section 153A issued in the name of a deceased assessee is treated as invalid where a subsequent notice was issued to the legal representative and a return was filed by that representative but the assessment proceeded on the earlier notice in the deceased's name; the operative effect is that the assessment founded on the invalid notice is set aside and the appeal was allowed. The decision follows precedent establishing that service and processing must correctly involve the legal representative before finalising assessment.

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Issues: Whether the notice under Section 153A of the Income-tax Act, 1961 and the consequent assessment framed under Section 153A read with Section 143(3) of the Income-tax Act, 1961 are valid where the initial notice was issued in the name of the deceased assessee and a subsequent notice to the legal representative was issued but not recorded or acted upon in the assessment order.

Analysis: The materials establish that the assessee died before the first notice under Section 153A was issued, a later notice under Section 153A was issued to the legal representative, and the assessment order records only the first notice to the deceased while also issuing a notice under Section 142(1) in the name of the deceased. The assessment was finalized on the basis of the notice recorded in the assessment order without considering the subsequent notice and return filed by the legal representative. The issue requires determination whether an assessment finalized on the basis of notices issued in the name of the deceased, without recording or considering the notice issued to the legal representative, is valid in view of the statutory scheme and relevant precedent regarding notice validity after death.

Conclusion: The notice and the resulting assessment under Section 153A read with Section 143(3) of the Income-tax Act, 1961 are quashed for being invalidly predicated on the notice issued in the name of the deceased without due recognition of the notice issued to the legal representative. The appeal is allowed in favour of the assessee.

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