INCOME-TAX OFFICER, WD.4(2)(1), AHEMDABAD V. LATE KHODAJI RANCHHODJI THAKOR LEGAL HEIR NARENDAKUMAR KHODAJI THAKOR, AHMEDABAD

ITA 941/AHD/2025

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which quashed the notice under section 148 of the Income Tax Act and the consequent assessment made on the grounds of undisclosed Long Term Capital gain on the sale of immovable property. The primary contention was that the assessment was made in the name of a deceased person, and the legal heir had not been informed or involved in the assessment process. The Tribunal referenced a similar case involving the same assessee for a different assessment year, where it was established that assessments made in the name of a deceased person are invalid. The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786447 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 29-04-2025
• Other Referred Cases: Chandreshbhai Jayantibhai Patel v. Income-tax Officer, Income-tax Officer v. Bhupendra Bhikhalal Desai, Principal Commissioner of Income-tax v. Maruti Suzuki India Ltd., Neena Jatin Shah vs. Income-tax Officer, Utpala Pradeep Jain vs. Assistant Commissioner of Income-tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR
• Assessee Lawyers: CHETAN AGARWAL
• Keywords: Set aside; Invalid notice
• Section: 148; 144; 142(1)

Judgement Text

" आयकर अपीलीय अिधकरण, अहमदाबाद Ɋायपीठ “A”,अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD ] ] BEFORE DR. BRR KUMAR, VICE PRESIDENT AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER आयकर अपील सं /ITA No. 941/Ahd/2025 िनधाŊरण वषŊ /Assessment Year : 2016-2017 The ITO, Ward-4(2)(1) Ahmedabad . (Appellant) बनाम / v/s. Late Khodaji Ranchhodji Thakor Legal Heir Narendra Kumar Khodaji Thakor, 28 Silver Crust Bunglows, Nr. Auda Water Tank Science City Road, Sol, Ahmedabad-380060. (Respondent) ̾थायी लेखा सं./PAN: AFWPT1453 K (अपीलाथŎ/ Appellant) (Ů̝ यथŎ/ Respondent) Revenue by : Shri Alpesh Parmar, CIT. DR Assessee by : Shri Chetan Agarwal, AR सुनवाई की तारीख/Date of Hearing : 17/11/2025 घोषणा की तारीख /Date of Pronouncement: 17/11/2025 PER DR.BRR KUMAR, VICE PRESIDENT: The present appeal has bee preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), National Printed from counselvise.com Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 24.02.2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2016- 17. 2. The Revenue has raised the following grounds of appeal: (a) “The Ld.CIT(A) has erred in law and on facts and in quashing the notice u/s. 148 and consequent assessment and deleting the addition of Rs.4,35,00,000/- made by AO on account of undisclosed Long Term Capital gain on sale of Immovable property on the ground that the assessee had expired before issue of Notice u/s. 148 of the Act, despite the fact that: (i) The legal heir of the assessee had not informed the department about death of assessee at any stage prior to completion of assessment. (ii) A reopening notice u/s. 148 of IT Act was issued on 31.03.2021 and duly served upon he email id of the assessee. Further, during assessment proceedings, various statutory notices were issued on 12.11.2021, 05.01.2022 and 10.03.2022 were issued and duly served upon the email id of the assessee. However, the Legal Heir had neither complied the statutory notices nor informed the department about death of assessee. Further, the L/h did not take any steps for registration himself as a legal heir for assessment. Hence, the AO had rightly passed ex-parte order u/s. 144 of IT Act in the name of assessee. (iii) The L/h of the assessee had not raised ground regarding challenging the validity of Notice u/s. 148 as the same was issued in the name of deceased person. (b) The Ld.CIT(A) has erred in law and on facts in not deciding the appeal on merits of the case. (c) The Ld.CIT(A) ought to have set aside the assessment order to the file of the AO to pass the assessment order after taking the legal heir on record. (d) The appellant craves leave to add, alter and/or toa end all or any the ground before the final hearing of the appeal.” Printed from counselvise.com 3. At the outset, both the parties fairly submitted that the issue raised by the Revenue in the present appeal stands covered by the order of the Tribunal in the assessee’s own case in ITA No.948/Ahd/2025 for AY 2017-18 dated 06.11.2025. For the sake of ready reference, the operative portion of said order is reproduced as under: “…6. We have heard the rival contentions and perused the material on record. The core issue involved in the present appeal filed by the Department is the validity of the assessment order passed in the name of a deceased person, late Shri Khodaji Ranchhodji Thakor, who had expired on 21.03.2017, much prior to the issuance of statutory notices and completion of assessment under section 144 of the Act. It is an undisputed fact on record that all notices, including those issued under sections 142(1) and 148 of the Act, were issued in the name of the deceased assessee and were served through his registered e-mail address, of which the legal heirs had no knowledge. The legal heir, Shri Narendra Khodaji Thakor, came to know of the assessment proceedings only upon receipt of the recovery notice in late 2022. These facts have been duly verified and recorded by the learned CIT(Appeals), who in our view correctly held that the assessment framed in the name of a dead person is void ab initio and not sustainable in law. It is a settled position of law that proceedings initiated and completed against a deceased person are a nullity and without jurisdiction. The Hon’ble Gujarat High Court in Chandreshbhai Jayantibhai Patel v. Income-tax Officer [(2019) 101 taxmann.com 362 (Guj)] categorically held that a notice issued under section 148 of the Act in the name of a deceased person is invalid and the consequent assessment is non est in the eyes of law. The Court further observed that the obligation lies upon the Revenue to ascertain the legal heirs before initiating proceedings, and section 292BB cannot cure such a fundamental defect because that provision applies only to a living assessee. The Hon’ble Supreme Court has also upheld this legal principle. In Income-tax Officer v. Bhupendra Bhikhalal Desai [2021] 131 taxmann.com 40 (SC), the Hon’ble Supreme Court upheld the Gujarat High Court’s decision holding that a notice issued under section 153C of the Income-tax Act, 1961, in the name of a deceased person is unenforceable and void in law. In that case, the assessee, Shri Bhupendra Bhikhalal Desai, had passed away on 23.04.2017, yet the Assessing Officer issued a notice under section 153C on 29.03.2019 in his name. The legal heir informed the AO about the assessee’s death and requested that the proceedings be dropped, but the AO rejected the objection on the ground that the department was unaware of the death. The High Court quashed the notice and assessment, holding that the Revenue cannot justify an invalid notice merely because it lacked knowledge of the death of the assessee. The Supreme Court dismissed the Revenue’s Special Leave Petition, thereby affirming that any notice issued to a deceased person is void and without legal effect. In Principal Commissioner of Income-tax v. Maruti Suzuki India Ltd. [(2019) 416 ITR 613 (SC)], the Hon’ble Court held that an assessment order passed in the name of a non-existent entity, being void ab initio, cannot be validated by section 292B or section 292BB of the Act. The Court held that participation or lack of objection by the assessee does not confer jurisdiction upon the Assessing Officer when Printed from counselvise.com the very foundation of the proceedings is fundamentally defective. The ratio of this judgment applies with equal force to cases where assessment proceedings are initiated in the name of a deceased person, who, in law, ceases to exist. In the case of Neena Jatin Shah vs. Income-tax Officer [2025] 179 taxmann.com 498 (Bombay)[30- 09-2025], the Hon'ble High Court held that notice under section 148 could not be issued to a dead person, and if it was done, same was null and void. In the case of Utpala Pradeep Jain vs. Assistant Commissioner of Income-tax [2023] 153 taxmann.com 700 (Gujarat)/[2024] 467 ITR 592 (Gujarat), the Hon'ble High Court held that where assessee died and thereafter Assessing Officer issued notice under section 148 in his name to reopen assessment, initiation of reassessment proceeding in name of deceased assessee and not in name of his legal representative were illegal and liable to be quashed. 7. In the present case, the CIT(Appeals) has recorded a clear finding that the assessee had expired much prior to the initiation of proceedings and that the notices were issued and assessment was completed in the name of the deceased person. The learned CIT(Appeals) has rightly applied the binding judicial precedents to hold that such assessment proceedings are void ab initio and non est in law. We also note that the Revenue has not disputed the fact of the assessee’s death prior to the issuance of notice or brought any material on record to show that the proceedings were ever validly continued against the legal heirs in accordance with section 159 of the Act. Considering the totality of facts and the consistent legal position laid down in the judicial precedents referred to above, we find no infirmity in the order passed by the learned CIT(Appeals). 8. In the result, the appeal filed by the Revenue is, therefore, dismissed...” 4. In the absence of any change in factual matrix and legal proposition brought to our notice, the appeal of the Revenue is hereby dismissed. 5. In the result, the appeal filed by the Revenue is dismissed. The order is pronounced in the open Court on 17.11.2025. Sd/- Sd/- Sd/- (SIDDHARTHA NAUTIYAL) JUDICIAL MEMBER Sd/- (DR. BRR KUMAR) VICE PRESIDENT (True Copy) अहमदाबाद/Ahmedabad, िदनांक/Dated : 17.11.2025 Printed from counselvise.com आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ)अपील (/ The CIT(A)- 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण,राजोकट/DR,ITAT, Ahmedabad, 6. गाडŊ फाईल /Guard file. आदेशानुसार/ BY ORDER, सȑािपत Ůित //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण, ITAT, Ahmedabad Printed from counselvise.com "