Assessment against Dead Person is a Nullity; Order passed without notifying Legal Representative quashed

Issue

Whether an assessment order passed in the name of a deceased assessee is valid if the Assessing Officer (AO) failed to issue notice to the legal representative (LR) and bring them on record, even though the death occurred while proceedings were pending.

Facts

The Timeline:
- Pending Proceedings: The assessee (engaged in money lending) was undergoing assessment for AY 2018-19.
- Hearing Fixed: A hearing was scheduled for 05.06.2021.
- Death: The assessee passed away on 03.06.2021 (just 2 days before the hearing).
- The Order: Unaware of the death (or ignoring it), the AO completed the assessment and passed the order on 17.06.2021 in the name of the deceased person.
The Defect: No notice was issued to the legal representative to continue the proceedings.

Decision

Nullity, not Irregularity: The Tribunal/Court held that an assessment order passed against a dead person is a nullity (void ab initio). It is not merely a procedural irregularity that can be cured.
Mandate of Section 159: Under Section 159(2), if an assessee dies during the pendency of proceedings, the proceedings must be continued against the legal representative from the stage at which the deceased left them.
Break in Chain: Since the assessee died on 03.06.2021, the proceedings were valid only up to that date. Any action taken thereafter (hearing on 05.06.2021 and order on 17.06.2021) without complying with the statutory requirement of notifying the LR was illegal.
Ruling: The assessment order was set aside in favour of the assessee.

Key Takeaways

Duty to Inform: While the AO has a duty to bring the LR on record, the legal heirs also have a practical duty to intimate the Department about the death immediately (by uploading the Death Certificate on the Portal or writing to the AO).

Nullity vs. Curable Defect: Courts distinguish between issuing a notice to a dead person (Nullity) and issuing a notice to a living person who dies during proceedings (Proceedings can continue if LR is joined). Passing a final order against a dead name without joining the LR renders the order void.

HIGH COURT OF KERALA

Shini Shajan

Principal Commissioner of Income-tax

ZIYAD RAHMAN A.A., J.

WP(C) NO. 19341 OF 2023

SEPTEMBER 17, 2025

Smt. Preetha S. Nair, Adv. for the Petitioner. Cyriac Tom, SC for the Respondent.

JUDGMENT

1. The petitioner is the widow of Sri. Shajimon Mathew, who was an assessee of the Income Tax, and whose assessment is the subject matter in this writ petition. The said assessee had been carrying on the business of money lending since 1997 and had been filing income tax returns from 2005-2006 onwards.

2. For the assessment year 2018-19, the draft assessment order under Section 143(3) r/w Section 144 B of the Income Tax Act was issued to the deceased assessee on 21.05.2021 by the 2nd respondent. Later, the show cause notice dated 24.05.2021, which is Ext.P2, was also issued to the deceased assessee, requiring him to furnish objections, if any, to the draft assessment order, and the date fixed for such objections was on 27.05.2021, which was within three days from the date of Ext.P2. According to the petitioner, the deceased assessee was admitted to the hospital on 26.05.2021, and therefore, an application was submitted seeking extension of time to submit the reply. The time was thus extended up to 05.06.2021.

3. In the meantime, while undergoing treatment, the assessee passed away on 03.06.2021. Thereafter, the assessment was completed on 17.06.2021 by issuing Ext.P5 order in the name of the deceased assessee. On coming to know about the same, a revision was submitted by the petitioner before the 1st respondent, highlighting this aspect, but the same was rejected as per Ext. P8. This writ petition is submitted by the petitioner, in such circumstances, challenging Exts. P5, P6, and P8.

4. A statement has been submitted on behalf of the 1^st respondent, wherein, the sequence of events that ultimately led to the Ext.P5 assessment order was mentioned. It was also contended that, in the light of Section 159, the assessment made against the assessee can be enforced against the legal representatives of the assessee, in the case of death of the assessee. Therefore, they sought dismissal of the writ petition.

5. I have heard Smt. Preetha S. Nair, learned counsel appearing for the petitioner, and Sri. Cyriac Tom, learned standing counsel for the respondents.

6. The specific contention raised by the learned counsel for the petitioner is that, the Ext.P5 assessment order and further proceedings based on the same, are not legally sustainable. This is because, Ext.P5 assessment order and Ext.P6 demand notice are null and void, as they have been issued against a dead person. Besides, it was also contended that the said order was issued in violation of the principles of natural justice. The learned counsel for the petitioner also brought to the attention of this Court, a press release made by the Central Board of Direct Taxes on 20.05.2021, requiring the officers concerned not to fix any hearing of cases up to 10.06.2021. This was issued in view of the fact that, in preparation for the launch of E-filing and migration activities, the existing portal of the department would not be available to taxpayers and other external stakeholders for a period of six days from 01.06.2021 to 06.06.2021. In this case, the hearing was scheduled on 05.06.2021. Therefore, on that ground also, an interference is required, points out the learned counsel for the petitioner.

7. On the other hand, learned Standing Counsel for the respondents opposes the aforesaid contentions pointing out that, a series of notices were issued prior to Ext.P2 notice to the assessee, and therefore ample opportunity was extended. Besides, the learned Standing Counsel also placed reliance upon the statutory stipulations contained in Section 159 of the Income Tax Act, which contemplates the liability of the legal representative in case of the death of the original assessee.

8. I have carefully gone through the records. It is evident from Ext.P3 that the assessee died on 03.06.2021, whereas, the hearing of the assessment proceedings was scheduled to be held on 05.06.2021. The order of assessment was also passed on 17.06.2021 in the name of the assessee, who was no more, as of the said date. Thus, as rightly pointed out by the learned counsel for the petitioner, the order of assessment is passed against a dead person, and therefore it has to be treated as a nullity.

9. Of course it is true that Sec. 159 of the Income Tax Act contemplates the liability of legal representatives in the case of the original assessee, and it reads as follows:

(1) Where a person dies, his legal representative shall be liable to pay any sum that the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.

(2) For the purpose of making an assessment (including an assessment, reassessment, or recomputation under section 147) of the income of the deceased and for the purpose of levying any sum in the hands of the legal representative in accordance with the provisions of subsection (1),

(a) any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased;

(b) any proceeding that could have been taken against the deceased if he had survived may be taken against the legal representative; and

(3) The legal representative of the deceased shall, for the purposes of this Act, be deemed to be an assessee.

(4) Every legal representative shall be personally liable for any tax payable by him in his capacity as legal representative if, while his liability for tax remains undischarged, he creates a charge on or disposes of or parts with any assets of the estate of the deceased, which are in, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of, or parted with.

(5) The provisions of subsection (2) of section 161, section 162, and section 167 shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative.

(6) The liability of a legal representative under this section shall, subject to the provisions of subsection (4) and subsection (5), be limited to the extent to which the estate is capable of meeting the liability.

10. It is true that Subsection (1) of section 159 provides that, “Where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased”. However, subsection 2(a) provides that any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased; Subsection 2(b) further contemplates that, any proceeding that could have been taken against the deceased, if he had survived, may be taken against the legal representative; and all the provisions of this Act shall apply accordingly.

11. On carefully going through the statutory stipulations as referred to above in Sec. 159, it is evident that the Department could have continued the proceedings against the legal representatives upon the death of the assessee from the stage at which it stood at the time of the death of the assessee.

12. In this case, the death of the deceased was at a time when the assessment proceedings were in progress, and the death happened just before the date on which, the hearing of the assessment was proposed to be conducted. Therefore, the proceedings only up to the date of death of the deceased could be treated as valid, and any further proceedings thereafter could have been continued by the Department only after issuing notice to the legal representative. This is because, subsection 2(a) of Sec.159 specifically contemplates that the proceedings may be continued against the legal representative from the stage at which it stood on the date of the death of the deceased, and therefore, when such proceedings are intended against the legal representative, the same could have been continued only upon issuing notice to the legal representative or representatives.

13. In this case, admittedly, no such exercise has been carried out, and instead, the assessment proceedings were finalized on 17.06.2021, whereas the assessee died on 03.06.2024. Therefore, the proceedings that culminated in Ext. P5 on 17.06.2021, which is in the name of the deceased and without issuing notice to the legal representative, cannot be treated as legal proceedings contemplated under Sec. 159 of the Income Tax.

14. Apart from the above, as pointed out by the learned counsel for the petitioner, as per the Press Release dated 20.05.2021 published by the Deparment, no hearing could have been conducted by the 2nd respondent on 05.06.2021. Evidently, Ext.P5 order dated 17.06.2021, was based on the hearing, which was proposed to be conducted on 05.06.2021. For that reason also, an interference is required.

15. Of course, it is pointed out by the learned Standing Counsel for the respondent that the petitioner failed to intimate the death to the 2^nd respondent. However, I am not inclined to accept the said contention for more than one reason. Firstly, it is to be noted that, the death of the deceased, who is none other than the husband of the petitioner, took place on 03.06.2021, and the hearing was scheduled on 05.06.2021. The order was passed on 17.06.2021. Expecting a wife, who lost her husband just days before the proposed hearing date, to submit an intimation immediately after such death, to the Income Tax Authorities as to his death, is highly irrational and impractical. Evidently, the priorities at that point in time, for a person who is under the grief of the deceased husband would be different, and under no circumstances can that be an intimation to be submitted before the statutory authorities. Therefore, no adverse consequences, merely because of that reason, can follow on the basis of non-submission of such intimation to the statutory authorities.

16. Apart from the above, observations made by the High Court of Delhi in the decision rendered in Savita Kapila v. Assistant Commissioner of Income-tax ITR 502 (Delhi)/ WPC No. 3258/2020, are also relevant. It was observed in the said decision that, in the absence of any specific statutory requirement imposing an obligation upon the legal representative to intimate the death of the assessee, such a stand cannot be taken by the Department. I am convinced of the aforesaid observation made by the Delhi High Court, particularly in view of the peculiar facts and circumstances of this case, which is to the effect that, the assessment was completed immediately after the death of the husband of the petitioner. In such circumstances, on that ground also, I find that the Ext.P5 proceedings require interference. As far as Ext.P8 revisional order passed by the 1^st respondent is concerned, I am of the view that the same also requires interference, in view of the fact that this Court has already found that Ext.P5, revision of which was sought before the 1^st respondent, is not legally sustainable. Thus, after considering all the relevant aspects, I find that the petitioner is entitled to the reliefs sought.

Accordingly, this writ petition is disposed of, quashing Exts. P5, P6, and P8 with a direction to the 2^nd respondent to complete the relevant assessment, after issuing fresh notice to the petitioner and other legal representatives, if any.