Notice to deceased assessee must first be served on legal heirs; once on record, legal heirs represent deceased assessee: ITAT

Income Tax Appellate Tribunal: The present appeal was filed by the daughter of the deceased assessee against the impugned order passed by Commissioner of Income Tax (Appeals), (‘Commissioner’) whereby the appeal was dismissed on the ground that the legal heirs have not been brought on record, and the appeal could not have been filed by the deceased person. The two-Member Bench of George Mathan (Judicial Member) and Sanjay Awasthi (Accountant Member), stated that the notice in respect of deceased assessee was to be served on legal heirs first and it was after that the legal heir so specified and brought on record, would represent on behalf of the deceased assessee. The Tribunal observed that no action was taken by the Assessing Officer to issue fresh notice in the name of the legal heir. Thus, the Tribunal quashed the notice issued to assessee under section 148 of the Income Tax Act, 1861 and other consequential assessment orders.

Background:

In the matter in hand, assessee, passed away on 18-12-2016. Thereafter, a notice under Section 148 of the Act was issued on 30-3-2018, for Assessment Year 2011-12, in the name of the deceased assessee. No fresh notice was issued to the legal heirs, nor were they brought on record prior to completion of assessment. The Assessing Officer, however, proceeded to complete the assessment, treating the deceased’s daughter, as the legal heir, without properly verifying her legal status or issuing notice to her.

Aggrieved by the assessment, an appeal was filed before the Commissioner, however, the Commissioner dismissed the appeal as not maintainable. It was held that it was filed in the name of the deceased person and that the legal heir had not been properly registered before the Assessing Officer. Earlier, on identical circumstances, for Assessment Year 2010-11, the Commissioner had held that issuance of notice under Section 148 of the Act to a deceased person was null and void and had quashed the assessment.

Hence, the present appeal has been filed before the Income Tax Appellate Tribunal, Kolkata Bench.

Analysis, Law, and Decision:

The Tribunal observed that that notice under Section 148 of the Act had not been served on the legal heir, while the assessee was deceased. The Tribunal held that notice in respect of deceased assessee was to be served on legal heirs first and it was after that the legal heir so specified and brought on record, would represent on behalf of the deceased assessee. Nothing has been done by the Assessing Officer when passed the assessment order was passed, and he was aware that the assessee was deceased.

The Tribunal concluded that, the Assessing Officer has not mentioned how he has treated the deceased’s daughter as the legal heir. It is further noticed that for the assessment year 2010-11, the Commissioner quashed the proceedings on account of notice not being issued to the legal heir but on the deceased assessee. This being so, as the notice has been issued by the Assessing Officer on a deceased assessee and even after the knowledge that the assessee is deceased, no action has been taken by the Assessing Officer to issue fresh notice in the name of the legal heir, therefore, the notice under Section 148 of the Act was quashed and the consequential assessment orders were also quashed.

[Lily Sarkar v. CIT, ITA No. 1437 Kol of 2025, decided on 3-9-2025]

Advocates who appeared in this case:

For the Appellant: Shuvo Chakraboty, A.R

For the Respondent: Sandip Sarkar, JCIT-Sr. DR