The Income Tax Appellate Tribunal’s ruling in Poonam v. DCIT establishes a critical procedural safeguard: tax assessments cannot proceed against a deceased assessee through notices issued in their name, even if a subsequent notice is issued to the legal representative. This decision reinforces the principle that procedural compliance is not a mere formality but a jurisdictional requirement under the Income Tax Act.
Background & Facts
The Dispute
The dispute arose from an income tax assessment under Section 153A of the Income Tax Act, 1961, following a search operation conducted on 12-13 March 2019 in the case of Shri Net Ram and associates, including the deceased assessee, Shri Kshitij Lal. The deceased had filed his original return for A.Y. 2017-18 on 6 March 2018, declaring income of Rs. 9,69,440. He passed away on 27 September 2019. Despite this, the Assessing Officer issued a notice under Section 153A on 20 January 2020 in the name of the deceased, to which a return was filed on 29 January 2020. A second notice under Section 153A was issued on 20 January 2021 to the legal representative, Ms. Poonam, who filed a revised return on 25 January 2021. However, the final assessment order dated 19 August 2021 was framed solely on the basis of the first notice issued to the deceased, ignoring the second notice and the return filed by the legal representative.
Procedural History
- 12-13 March 2019: Search conducted under Section 132
- 27 September 2019: Assessee, Shri Kshitij Lal, died
- 20 January 2020: First notice under Section 153A issued to deceased assessee
- 29 January 2020: Return filed under Section 153A by deceased’s estate
- 20 January 2021: Second notice under Section 153A issued to legal representative, Ms. Poonam
- 25 January 2021: Return filed by legal representative
- 12 February 2021: Notice under Section 142(1) issued to deceased (post-death)
- 19 August 2021: Assessment order passed under Section 153A r.w.s. 143(3) in name of deceased, ignoring legal representative’s return
- 8 August 2025: CIT(A) dismissed appeal
- 29 January 2026: ITAT allowed appeal
Relief Sought
The appellant sought quashing of the assessment order on grounds that proceedings initiated against a deceased person are void ab initio, and that the assessment based on an invalid notice cannot stand, regardless of subsequent corrective steps.
The Legal Issue
The central question was whether an assessment order under Section 153A can be sustained when the initial notice was issued to a deceased assessee, even if a subsequent notice was issued to the legal representative and a return was filed by them, but the final order relied exclusively on the invalid notice.
Arguments Presented
For the Appellant
The appellant’s counsel relied on the Delhi High Court’s decision in Savita Kapila v. ACIT Circle 4(1), which held that the legal representative has no statutory duty to intimate the department of the assessee’s death. Consequently, any notice issued to a deceased person after their death is void and cannot form the basis of a valid assessment. The counsel argued that the assessment order, which cited only the first notice (to the deceased) and ignored the return filed by the legal representative, was procedurally defective and jurisdictionally invalid.
For the Respondent
The Revenue contended that the issuance of a second notice to the legal representative on 20 January 2021 cured any defect, and that the omission of reference to this notice in the final order was merely an inadvertent clerical error. The Revenue relied on the CIT(A)’s view that substantial compliance had been achieved and that the assessment should not be invalidated on technical grounds.
The Court's Analysis
The Tribunal rejected the Revenue’s argument that procedural lapses could be cured by subsequent action. It emphasized that jurisdictional defects cannot be remedied by post-facto corrections. The Court noted that the assessment order explicitly referenced only the first notice issued to the deceased, and made no mention of the return filed by the legal representative. The issuance of a notice under Section 142(1) to the deceased after his death further demonstrated a systemic failure to recognize the change in legal status.
"The notice in respect of which the assessment has been finalized is invalid in the light of decision of the Hon'ble Jurisdictional High Court in the case of Savita Kapila (supra)."
The Tribunal held that Section 153A proceedings are initiated by notice, and the identity of the person to whom the notice is addressed is fundamental to the validity of the entire proceeding. Once the assessee dies, the legal representative becomes the only competent person to receive notices and file returns. Any action taken against the deceased after death is a nullity. The fact that the department later issued a valid notice did not retroactively validate the initial invalid notice, especially when the final order did not rely on it.
The Verdict
The appellant won. The Tribunal held that assessment proceedings under Section 153A are void if initiated against a deceased assessee, even if a subsequent notice is issued to the legal representative. The assessment order was quashed for being based on an invalid notice, and the Revenue was directed to initiate fresh proceedings, if warranted, against the legal representative with proper notice.
What This Means For Similar Cases
Notice Must Match Legal Status at Time of Issuance
- Practitioners must verify the status of the assessee before filing any response to a notice under Section 153A
- If the assessee has died, the notice must be addressed to the legal representative; otherwise, the proceeding is void
- Revenue authorities must update records immediately upon learning of death, even without formal intimation
Final Order Must Reflect Valid Proceedings
- Assessment orders must explicitly reference only valid notices and returns
- Courts will not infer compliance from unmentioned documents or subsequent actions
- Any reliance on an invalid notice renders the entire assessment unsustainable, regardless of other procedural steps
Legal Representatives Must Act Promptly
- While the law does not impose a duty on legal representatives to inform the department, they should proactively file a notice of death and request re-issuance of notices
- Delay in acting may lead to prolonged litigation, but does not validate invalid proceedings
- Legal representatives should preserve all correspondence and file objections at the earliest stage to preserve rights
