INCOME TAX OFFICER, ICHALKARANJI V. SHRIKANTA AMRITKUMAR JAIN, ICHALKARANJI

ITA 2018/PUN/2025

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A)/NFAC, which had allowed the appeal of the assessee's legal heir. The primary contention was whether the assessment order passed in the name of a deceased person was valid. The legal heir argued that the assessment was void ab initio as it was passed after the death of the assessee, despite the legal heir being registered on the e-filing portal. The Tribunal considered various judicial precedents and the provisions of section 159 of the IT Act, which allows proceedings to continue against the legal representative from the stage they stood at the time of death. The Tribunal decided to set aside the CIT(A)'s order and remand the matter for a fresh assessment in the name of the legal heir.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838359 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Appeal Filed On: 26-08-2025
• Other Referred Cases: CIT vs. Shri I. Mahabaleshwarappa, CIT vs. Sumantbhai C. Munshaw (decd.), Haresh Dayashankar Shrivastav vs. ITO, Vijay Garg vs. ITO, Md. Zafrulla vs. CIT, Kamalesh Kumar Mehta vs. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit
• Section: 143(3); 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2018/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 ITO, National e-Assessment Centre, Delhi. Vs. Shrikanta Amritkumar Jain, 341, 342, Khanjire Industrial Estate, Shahpur, Ichalkaranji- 416115. PAN : AAXPJ0016G Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the Revenue is directed against the order dated 30.06.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19. 2. The Revenue has raised the following grounds of appeal :- “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee? 2. On the facts and circumstances of the case and in law the Ld. CIT(A) erred in disregarding the fact that the notice u/s. 143(2) was issued on 28.09.2019 which was prior to the death of the assessee i.e. on 13.11 2019? Revenue by : Shri Amit Bobde Assessee by : Shri Pramod S. Shingte Date of hearing : 17.12.2025 Date of pronouncement : 19.02.2026 Printed from counselvise.com ITA No.2018/PUN/2025 2 3. On the facts and circumstances of the case and in law the Ld.CIT(A) erred in disregarding the fact that when the assessee expired during the course of proceedings and the assessment order was passed by the Assessing Officer subsequent to the death of the assessee, such assessment order was not void ab initio since the issue is covered under section 159(2) of the Act? 4. Whether on the facts and in the circumstances of the case and in law, order u/s 143(3) of the Act was passed by the AO and the name of legal hair mark in the body of the order through E- portal which was duly responded by the Legal Heir during the course of assessment proceeding is deemed to be issued to the Legal Heir? 5. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) was justified in allowing the appeal of the assessee, in spite of the fact that the Legal Heir actively participated in the assessment proceedings but inform about the demise of the assessee at the fag end of the year when show cause notice was issued by AO on 10.03.2021.?” 3. Facts of the case, in brief, are that the assessee is an individual and furnished her return of income on 30.09.2018 declaring an income of Rs.13,19,400/-. The case was selected for scrutiny through CASS. Statutory notice u/s 143(2) was issued to the assessee on 28.09.2019. Subsequently, notice u/s 142(1) was also issued to the assessee on 10.02.2020. After considering the submissions of the assessee, a draft assessment order was issued to the assessee on 10.03.2021. The legal heir of the assessee Riteshkumar Amritkumar Jain submitted that the assessee i.e. his mother Late Shrikanta Amritkumar Jain has expired on 23.11.2019 and his name was already added as legal heir on the income tax Printed from counselvise.com ITA No.2018/PUN/2025 3 portal since 26.06.2020, therefore it was claimed that the notice issued to deceased person has no effect and it is bad in law. After considering this reply, the Assessing Officer observed in his order that the notice u/s 143(2) was issued on 28.09.2019 which was prior to the death of the assessee i.e. on 23.11.2019, hence the subsequent notices issued are not bad in law. With this remark, the assessment was completed u/s 143(3) r.w.s. 144B of the IT Act and vide order dated 26.04.2021 the income was determined at Rs.6,38,21,750/- as against the income of Rs.13,19,400/- returned by the assessee. The above assessed income includes addition of Rs.5,46,97,765/- u/s 68 of the IT Act being unexplained credit and also includes an addition of Rs.78,04,588/- claimed as interest on unsecured loan. 4. Being aggrieved with the above assessment order, the legal heir of the assessee furnished an appeal before Ld. CIT(A)/NFAC. After considering the submissions, Ld. CIT(A)/NFAC allowed the appeal filed by the assessee by observing as under :- “8.8 Ground of Appeal No. 1: 8.8.1 Vide the above ground of appeal, the appellant has challenged the validity of the assessment order on the ground that the same was passed on a deceased person, despite intimation of death on 12.03.2021 and registration of legal heir on 26.06.2020. The appellant has relied on Section 159 of the Act, submitting that once the death of the assessee was intimated, subsequent proceedings ought to have been taken in the name of the legal heir, and failure to do so renders the assessment void ab initio. Reliance has been placed on Rupa Shyamsunder Dhumatkar Printed from counselvise.com ITA No.2018/PUN/2025 4 (Bom HC WP 404/2019), Sumit Balkrishna Gupta (103 taxmann.com 188 (Bom HC)], and Chandreshbhai Jayantibhai Patel (Gujarat HC SCA 15172/2018), wherein assessments on deceased persons were held to be invalid. 8.8.2 I have carefully considered the submissions of the appellant and examined the records. It is noted that the notice u/s 143(2) was issued on 28.09.2019, prior to the date of death on 23.11.2019, thereby validly initiating the proceedings in the name of the assessee. As per section 159(2)(a), such proceedings shall be deemed to continue against the legal representative from the stage at which they stood on the date of death of the deceased. In the present case, the legal heir had responded to subsequent notices and had participated in the assessment proceedings without objection until the final show cause notice was issued. It is only at that belated stage le in response to show cause notice dated 10-03-2021, legal heir of appellant intimated AO that Smt Srikantha Amrit Kumar Jain had already expired on 23.11.2019. Sri Ritesh kumar Amrit Kumar Jain also stated that he registered himself as legal representative on e- filing portal on 26-06-2020. Claim of appellant that he registered himself as legal representative of Smt Srikantha Amrit Kumar Jain appears correct. Screenshot of system where he is approved as legal representative by income tax department is reproduced as under. ...... 8.8.3 Since notices u/s 143(2) /142(1) were issued in the name of Smt Srikantha AmritKumar Jain prior to intimation of her death to AO, they can't be considered invalid. However, Sri Ritesh AmritKumar Jain has intimated AO with regard to death of Smt Srikantha AmritKumar Jain, the FAO should have taken steps to pass order in the name of Legal representative since by that time Sri Ritesh AmritKumar Jain had already registered himself as legal representative in e filing portal. If system did not allow change of name of assessee from Smt Srikantha AmritKumar Jain to Smt Srikantha AmritKumar Jain, LR Sri Ritesh Amrit Kumar Jain, the case should have been transferred to JAO for completion of assessment in the name of Legal representative. It appears that sufficient time to transfer the case to JAO through NFAC after taking approval from appropriate authorities was not available with JAO. However, it is settled law that assessment order can't be passed in the name of deceased person. 8.8.4 Hon'ble Kamata High Court in the case of CIT v. Shri. 1. Mahabaleshwarappa [IT Appeal No. 561 of 2013, dated 16-6-2021] held that when the assessee expired after the hearing was over and the assessment order was passed by the Assessing Officer subsequent to the death of the assessee, such assessment order was not void ab initio as opined by the Tribunal since the issue is covered under section 159(2) of the Act. The High Court, however, set aside the issue to the Printed from counselvise.com ITA No.2018/PUN/2025 5 Assessing Officer directing him to issue notice to the legal representatives of the deceased assessee and thereafter to pass a fresh order of assessment. 8.8,5 In the case of Md. Zafrulla, Legal Representative of Md. Rafiulla v. CIT 72 TAXMAN 231, Hon'ble Gauhati the High Court held that as per principle under Order 22, rule 6 of the Civil Procedure Code, if death occurs between conclusion of hearing and pronouncement of judgment, judgment may in such case be pronounced notwithstanding death and shall have same force and effect as if it had been pronounced before death took place, should be extended in a proceeding under Income-tax Act on the ground of policy of law. Therefore, this would at best be a defect which could be corrected and therefore, assessment order made without notice to legal representative is not null and void where death of assessee occurs between conclusion of hearing and making of assessment. In view of the above, Hon ble court held that the Tribunal was correct in law in setting aside the order of the Commissioner (Appeals) and directing the Assessing Officer to remove the defect by issuing notice to all the legal representatives of the deceased and bringing them on record. 8.8.6 in the case of Kamalesh Kumar Mehta v. CIT 106 ITR 855 (CAL), the High Court held that section 159 does not provide for any annulment of assessment, reassessment or re-computation but expressly provides for continuance of proceedings from stage at which they stood on date of death of assessee against his legal representatives who in terms of section 159(3) is deemed to be assessee and he is liable to pay tax which deceased would have been liable to pay if he had been alive. The facts of this case are that the Assessee died during pendency of assessment proceedings. However, his death was not brought to notice of ITO who completed assessment. The AAC set aside assessment and directed ITO to reframe assessments after getting names of legal representatives and after issuing notices to them. 8.8.7 Hon'ble Gujarat High Court in the caCIT v. Sumantbhai C Munshaw (decd.)5 Taxman 27 (Gujarat) held that A decree against a dead person, is not a nullity for all purposes. If at the date of the death of the deceased assessee, a retum in respect of the income earned by him in the previous year had already been filed and the assessment proceeding had commenced, it would not be necessary to start the proceeding afresh, against the legal representative, since any proceeding taken against the deceased prior to the date of his death is, by a fiction, deemed as having been taken against the legal representative. It would be necessary, therefore. to determine who the legal representative is and take all further steps in the proceeding against him. The legal representative will also be given full opportunity of being heard before an assessment is made on him in respect of the estate of the deceased. Printed from counselvise.com ITA No.2018/PUN/2025 6 8.8.8 In all the cases cited above, Hon'ble courts have held that assessment against a deceased person is not void but a defect which can be cured by passing it against legal representative, accordingly directions were given to AO. The Bombay High Court decisions relied upon by the appellant pertain to situations where the initial notice itself was issued to a dead person, which is distinguishable on facts. Since CIT(A) do not have power to give directions to AO to issue fresh notice in the name of legal representative, redo assessment, since the base order in this case was passed u/s 143(3) and assessment order in the name of deceased can't be sustained even as per decisions cited above. Accordingly, Ground of Appeal No. 1 is Allowed. 8.8.9 Since Ground of appeal No 1 is Allowed by which appellant gets full relief, other grounds of appeal are not adjudicated. 9. As a result, appeal of appellant is Allowed.” 5. It is the above order against which the Revenue is an appeal before the Tribunal. 6. Ld. DR appearing from the side of the Revenue submitted before us that in the light of section 159 of the IT Act the order of assessment cannot be annulled since the assessee was alive when notice u/s 143(2) was issued to her. It was also submitted by Ld. DR that Legal Heir participated in the assessment proceedings and the name of legal heir was also mentioned in the body of the assessment order. Apart from above, Ld. DR also submitted that even after observing that various courts have already held that the assessment against a deceased person is not void but a defect which can be cured, Ld. CIT(A)/NFAC allowed the appeal of the assessee instead of restoring the matter back to the file of the Assessing Printed from counselvise.com ITA No.2018/PUN/2025 7 Officer to pass assessment order afresh by issuing notice to legal heir. In support of this contention, Ld. DR relied on following judgements and decisions :- (i) CIT vs. Shri I. Mahabaleshwarappa, ITA No.561 of 2013 (Karnataka). (ii) CIT vs. Sumantbhai C. Munshaw [1981] 128 ITR 142 (Gujrat) (iii) Haresh Dayashankar Shrivastav, ITA No.684/Ahd/2025 Accordingly, Ld. DR requested to remand the matter back to the file of the Assessing Officer to pass assessment order afresh in the name of the legal heir. 7. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is justified. Ld. AR also submitted that the order passed in the name of the deceased person is void ab initio and bad in law. Ld. AR relied on following judgements in support of his contentions and requested before the bench to confirm the order passed by Ld. CIT(A)/ NFAC :- (i) Sumit Balkrishna Gupta vs. ACIT [2019] 103 taxmann.com 188 (Bombay). (ii) Savita Kapila vs. ACIT [2020] 188 taxmann.com 46 (Delhi). Printed from counselvise.com ITA No.2018/PUN/2025 8 (iii) Rupa Shyamsundar Dhumatkar vs. ACIT, Writ Petition No.404 of 2019 order dated 05.04.2019. 8. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee as well as by Ld. DR. In this regard, we find that the assessee died during the continuance of assessment proceedings and admittedly the notice u/s 143(2) was issued to the assessee on 28.09.2019 i.e. prior to the date of death of the assessee i.e. prior to 23.11.2019 when the assessee died. We find force in arguments of Ld. DR that the case laws relied on by the assessee are distinguishable on facts since in all those cases the notice was issued after the death of the assessee and therefore Hon’ble Courts held that the assessment orders are bad in law. We further find that Ld. DR relied on judgements passed by Hon’ble Karnataka High Court and Hon’ble Gujarat High Court and also placed reliance on latest coordinate bench decision passed in the case of Haresh Dayashankar Shrivastav in ITA No.684/Ahd/2025 order dated 24.07.2025 wherein the Tribunal by relying on judgement passed by Hon’ble High Court of Delhi in the case of Vijay Garg vs. ITO [2023] 146 taxmann.com 231 (Delhi) and also relying on the Printed from counselvise.com ITA No.2018/PUN/2025 9 judgement passed by Hon’ble Gujarat High Court in the case of CIT vs. Sumantbhai C. Munshaw (Decd), [1981] 5 Taxman 27 (Guj.) allowed the appeal filed by the Revenue by observing as under :- “7.6. Thus, we are fully satisfied that the assumption of jurisdiction by the Assessing Officer to pass the Assessment order is well within the provisions of law. Next Question that arise for our consideration is, can the assessment order is setaside with direction to pass fresh order in the name of legal heir, and if the same not time barred ? 7.7. We have answer for the same by the Jurisdictional High Court in the case of CIT -Vs- Sumantbhai C. Munshaw (decd.) reported in [1981] 5 Taxman 27 (Guj.) wherein it was held as follows: ****** 7.8. Respectfully following the above judicial precedents we hereby setaside the orders passed by the lower authorities and restore the issue to the file of the Jurisdictional Assessing Officer with direction to pass fresh assessment in the name the legal heir of the deceased assessee by giving proper opportunities of hearing to the legal heir and in accordance with the provisions of law. Thus the Grounds of Appeal raised by the Revenue are allowed. 8. In the result the appeal filed by the Revenue is allowed for statistical purpose.” 9. Respectfully following the above decision passed by a coordinate bench of the Tribunal in the case of Haresh Dayashankar Shrivastav (supra) wherein relying on judgements passed by Hon’ble Delhi High Court and Hon’ble Gujarat High Court, the Tribunal allowed the appeal filed by the Revenue, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of the Assessing Officer with a direction to pass assessment order afresh in the name of legal heir Printed from counselvise.com ITA No.2018/PUN/2025 10 and also as per provisions of law after providing reasonable opportunity of hearing to the legal heir of the deceased assessee. Thus, the grounds of appeal raised by the Revenue are allowed for statistical purposes. 10. In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced on this 19th day of February, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 19th February, 2026. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr.CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "