The Income Tax Appellate Tribunal (Dehradun Bench) set aside an assessment order and a notice issued under Section 148 of the Income Tax Act on a deceased assessee, declaring the proceedings void ab initio and clarifying that notice must be served on a living person or legal heir.
Background & Facts
The Dispute
The appellant, Ashraj Ali (deceased) through his legal heir Shafiq, challenged an assessment order for Assessment Year (AY) 2020-21 and a reopening notice under Section 148 for AY 2019-20 issued by the Assessing Officer (AO) of the Income Tax Department, Dehradun. The appellant contended that the AO, unaware of the assessee’s death, issued the notice and completed the assessment on a dead person.
Key Facts
- 27.01.2024: Ashraj Ali died.
- 23.01.2025: The AO passed an ex parte order without knowledge of the death.
- 10.03.2026: The impugned order dated, passed u/s 250 of the Act, upheld the assessment.
- Assessment Year 2019-20: Notice under Section 148 was issued in the name of the deceased.
- Assessment Year 2020-21: Assessment order was eventually passed.
- 21.07.2026: Date of hearing before the ITAT.
- 07.08.2026: Pronouncement of the judgment.
- The legal heir’s death certificate was filed on page 17 of the paper book.
Procedural History
- 23.01.2025: AO issued ex parte order (assessment proceedings ongoing).
- 10.03.2026: Order dated under Section 250 of the Act passed by the AO.
- Date unspecified: Legal heir approached the Commissioner of Income Tax (Appeals) [CIT(A)] raising the death of the assessee as a ground of appeal; CIT(A) remitted the matter back to the AO for fresh adjudication.
- 21.07.2026: Appeal filed before the ITAT (ITA No.258/DDN/2026).
- 07.08.2026: ITAT delivered its judgment, allowing the appeal.
Parties' Positions
- Appellant (legal heir Shafiq): Asserted that notice issued under Section 148 on a dead person is invalid; the assessment order is void; cited several High Court and ITAT precedents.
- Respondent (Income Tax Officer): Argued that there is no statutory duty on heirs to inform the department of death; therefore the AO could lawfully proceed with assessment.
Relief Sought
The appellant sought quash of the notice issued under Section 148, set-aside of the assessment order for AY 2019-20, and allowance of the grounds relating to the death of the assessee. The remaining grounds of appeal were left untouched.
The Legal Issue
Whether an assessment order and a notice issued under Section 148 of the Income Tax Act, 1961, on a deceased assessee, without serving the legal heir, are void ab initio and must be set aside.
Arguments Presented
For the Appellant
- Relied on Neeraj Kataria (ITA 4979/Del/2025) and several High Court decisions holding that a notice u/s 148 served on a dead person is not enforceable.
- Submitted that the AO had no knowledge of the death and therefore could not lawfully issue notice; the assessment proceeding is void.
- Emphasised that the legal heir’s death certificate was on record, establishing the fact of death.
For the Respondent
- Contended that the statute does not impose a duty on heirs to inform the department of the assessee’s death.
- Argued that the AO’s powers under Section 148 are discretionary and can be exercised irrespective of the assessee’s status.
- Cited Late Ashvinbhai Umedbhai Patel v. ITO (ITA Nos. 1105 & 1106/Ahd./2025) to support the view that assessment can continue until the department is formally notified.
The Court's Analysis
The Tribunal examined the statutory scheme of Sections 144, 148 and 292B of the Income Tax Act. It observed that the purpose of a notice under Section 148 is to invite the assessee to appear and that such notice must be served on a living person capable of responding. The Court quoted the coordinate bench in Neeraj Kataria:
"We observed that the Ld. CIT(A) sustained the addition for the reason that return was filed by the assessee and there was no communication from the legal heirs to the department about the death of the assessee..." The Tribunal further noted that the Madras High Court in Alamelu Veerapan v. ITO held that a notice issued in the name of a dead person is not enforceable, and the Gujarat High Court in Rashid Lal v. ITO declared that completing assessment on a deceased assessee is erroneous. The Delhi High Court in Braham Prakash v. ITO and Dharamraj v. ITO were also relied upon to establish that notices under Section 148 issued to a deceased assessee are null and void, rendering subsequent assessment orders illegal. Applying these precedents, the Tribunal concluded that the notice issued on 10.03.2026 under Section 148 for AY 2019-20 and the assessment order framed thereafter were illegal, bad in law and void-ab-initio. Consequently, the grounds of appeal relating to the death of the assessee were allowed, while the remaining grounds were left open.
The Verdict
The appeal was allowed. The Tribunal quashed the notice issued under Section 148 of the Income Tax Act and the assessment order for AY 2019-20, holding them void ab initio. The grounds challenging the assessment on a dead person were allowed; the other grounds of appeal were left untouched.
What This Means For Similar Cases
Notice Must Be Served on a Living Person
- Practitioners must verify the assessee’s status before issuing a notice under Section 148.
- If the assessee is deceased, the notice must be directed to the legal heir or representative.
Legal Heir Must Be Brought on Record
- Departments should proactively seek confirmation of death and record the heir’s details to avoid jurisdictional defects.
- Failure to do so renders any subsequent assessment proceedings void.
Assessment Proceedings Void If Deceased
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Any assessment order framed on a dead assessee without proper notice is liable to be set aside.
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Courts will follow the line of Neeraj Kataria and related High Court judgments in similar disputes.
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Ensure death certificates are filed promptly.
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Issue fresh notices to legal heirs before reopening assessments.
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Review pending assessments for compliance with the principle that notice must be served on a living person.
