LATE ADIREDDY RAMA REDDY L/R BY T N JAYALAKSHMI ,BANGALORE V. INCOME TAX OFFICER, WARD-7(2)(1), BANGALORE

ITA 2042/BANG/2025

AI Insights

The case involves an appeal by the legal heir of Late Adireddy Rama Reddy against the orders of the Income Tax Officer and the CIT(A), which were made in the name of the deceased. The primary contention was that the assessment and subsequent proceedings initiated against the deceased were invalid as the legal heir had informed the Assessing Officer about the death. The tribunal also considered the legal implications of conducting tax assessments and issuing notices to a deceased person, which are not permissible without involving the legal representatives. Additionally, the case touched upon the exemption claims under section 54F of the Income Tax Act, which were not adequately addressed by the lower authorities.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836561 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 18-09-2025
• Other Referred Cases: Smt. Preethi V. Vs. ITO, Mrs. Vanitha Gopal Shetty vs. ACIT, Sandeep Kumar Shah vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K. SARAVANAN
• Assessee Lawyers: AVINASH MALLYA
• Keywords: Set aside; Recovery proceedings
• Section: 143(3); 142(1); 54F; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 2042/Bang/2025 Assessment Year : 2017-18 Late Adireddy Rama Reddy, Represented by Smt. T.N. Jayalakshmi, (L/R of Late Shri Adireddy Rama Reddy), No. 4, 4th Cross, 8th Main Road, 3rd Block East, Jayanagar, Bengaluru – 560 011. PAN: ACKPR6555K Vs. The Income Tax Officer, Ward – 7(2)(1), Bangalore. APPELLANT RESPONDENT Assessee by : Shri Avinash Mallya, Advocate Revenue by : Shri K. Saravanan, Addl. CIT – DR Date of Hearing : 28-01-2026 Date of Pronouncement : 10-02-2026 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the legal heir of the deceased assessee challenging the order of the NFAC, Delhi dated 12/02/2025 in respect of the A.Y. 2017-18 and raised the following grounds: “1. The assessment order which was framed in the name of the deceased appellant even after the information about pertaining to death of the appellant was communicated to the assessing officer by their legal heir, renders the assessment order non-est and void ab-in initio in the eyes of the law. Printed from counselvise.com Page 2 of 6 ITA No. 2042/Bang/2025 2. A notice issued in the name of a dead person is not enforceable in law and if such is the legal position then, the income tax department cannot be held to be justified in contending that they have no knowledge about the death of the appellant. 3. The Assessing officer erred in not taking cognizance of the submissions filed by the legal heirs of the appellant regarding the death of the appellant and in this regard, the assessment order along with the subsequent penalty proceedings are vitiated in the eyes of the law. 4. The assessing officer has not considered the various documentations provided during the assessment proceedings to substantiate the claims of the exemption claimed u/s 54F of the appellant. 5. The assessing officer has not appreciated the merits of the submission furnished by the appellant during the course of the assessment proceedings and proceeded to reject the contentions of the appellant on bald grounds without passing any speaking order rebutting the arguments endorsed in them. 6. The assessing officer has disallowed the entire amount of exemption claimed by the appellant in the presence of tangible evidence in support of it. The denial of the cost of investment in the residential flat in the absence of substantive reasons is unjustified. 7. The assessing officer has failed to consider that the current residential flat which the legal heir of the appellant was currently residing in was one residential unit and for the convenience of the late assesseee's family, different floors were built. 8. The learned assessing officer has erred in disallowing the exemption claimed u/s 54F of the Act since the BDA authorities for the purpose of property tax for this residential property have assigned one PID Number taking into consideration that the entire residential dwelling is one individual unit. 9. The legal heir of the appellant denies the liability to pay interest under section 234A, 234B and 234C of the Act in view of the fact that there is no liability to additional tax as determined by the learned assessing officer. Without prejudice the rate, period and on what quantum the interest has been levied are not in accordance with law and further are not discernible from the order and hence Printed from counselvise.com Page 3 of 6 ITA No. 2042/Bang/2025 deserves to be cancelled on the facts and circumstances of the case. 10. The legal heir of the appellant craves to add, alter, amend, substitute, change and delete any of the grounds of appeal. 11. For the above and other grounds that may be urged at the time of hearing of the appeal, the legal heir of the Appellant prays that the appeal may be allowed, and justice rendered, and the appellant shall be awarded cost in prosecuting the appeal and also order for the refund of institution fees as part of the cost.” 2. The brief facts of the case are that the assessee is an individual and filed his return of income on 10/07/2017. Thereafter the case was selected for scrutiny and notices u/s. 143(2) was issued on 10/08/2018. Subsequently, notice u/s. 142(1) was also issued on 08/07/2019. The legal heir of the assessee filed the documents as called for by the AO. The assessee Shri Adireddy Rama Reddy expired on 27/12/2017 and therefore the L/R has filed their objections to the various notices issued by the AO. The AO had also observed in his order that the assessee’s L/R was asked to file the objections for the disallowance since the benefit of section 54F would be applicable to one residential house only. The AO was of the view that the assessee had two dwelling units and therefore they are not entitled for the benefit u/s. 54F of the Act. The AO made the assessment u/s. 143(3) of the Act in the name of the deceased assessee. As against the said order, the L/R of the deceased assessee filed an appeal before the Ld.CIT(A) and also filed the written submissions. The assessee had submitted the death certificate of the assessee and also raised a legal plea that the assessment made in the name of the deceased assessee instead of making in the name of the L/Rs of the deceased assessee is bad in law. The Ld.CIT(A) had not accepted the appeal filed by the assessee on merits and not at all discussed anything about the legal plea raised by the assessee’s L/R. 3. Therefore the present appeal has been filed before this Tribunal with a delay of 141 days. The L/R of the deceased assessee filed an affidavit in support of the said delay and submitted that all the hearing notices were Printed from counselvise.com Page 4 of 6 ITA No. 2042/Bang/2025 sent to some other email ID but not to the email ID mentioned in form 35. Therefore, the L/R of the assessee and the AR had no knowledge about the appeal hearing dates. The assessee also submitted that the order of the Ld.CIT(A) was also not communicated to the email ID given in form 35. Only when the recovery proceedings and penalty proceedings were initiated in the month of September, 2025, the assessee came to know about the order passed by the Ld.CIT(A) and thereafter steps were taken to file the appeal before this Tribunal. The L/R of the deceased assessee also filed the screenshot of the hearing notices sent by the Ld.CIT(A) to show that the hearing notices were sent to a different email ID. The L/R of the assessee therefore submitted that the delay was neither wilful nor wanted and prayed to condone the delay and decide the issue on merits. 4. We have considered the said submissions and also perused the screenshots of the hearing notices as well as the profile of the assessee and we are satisfied that the notices and orders were neither sent to the email ID mentioned in form 35 nor sent to the email ID mentioned in the profile of the assessee and therefore we are inclined to condone the said delay of 141 days in filing the appeal and proceeded to consider the appeal on merits. 5. At the time of hearing, the Ld.AR submitted that before issuing notice u/s. 143(2), the assessee died and the said fact was also intimated to the AO and therefore the assessment made on the deceased assessee is not a valid one. The Ld.AR further submitted that the assessee should be granted the benefit u/s. 54F since the building is constructed by the assessee in which two floors were constructed and also relied on the replies filed by the assessee to the notices issued by the AO. The Ld.AR also filed a paper book and also filed a case law compilation and submitted that the assessment order is ab-initio-void since the assessment was made in the name of the deceased assessee. 6. The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal. Printed from counselvise.com Page 5 of 6 ITA No. 2042/Bang/2025 7. We have heard the arguments of both sides and perused the materials available on record. 8. We have perused the death certificate filed by the assessee from which we found that the assessee died on 27/12/2017 and the said death certificate was also produced before the AO and therefore the AO has knowledge about the death of the assessee before issuing notice u/s. 143(2) of the Act. The fact remains that the assessment proceedings were commenced on 10/08/2018 by which date, the assessee expired. We have also perused the replies filed by the L/R of the deceased assessee in which it was informed that the assessee had deceased, in spite of that the AO had made the assessment in the name of the deceased assessee. 9. The L/R of the deceased assessee also raised a legal plea before the Ld.CIT(A) about the assessment made on the deceased person, but unfortunately, the Ld.CIT(A) had not at all discussed anything about the plea and rejected the appeal on merits. From the facts available before us, it is clear that the assessee died before initiation of the proceedings and therefore the subsequent proceedings initiated by the AO in the name of the deceased assessee is not liable to be sustained. 10. The first principle is that proceedings could not be initiated on the dead person. We are of the view that the AO could not initiate any proceedings on the dead person without impleading the legal representatives. The following judgments are relied on by the assessee in support of their case that the assessment made on the dead person is liable to be set aside. a) Judgement of Hon’ble Karnataka High Court in case of Smt. Preethi V. Vs. ITO reported in (2025) 171 taxmann.com 100 b) Judgment of Hon’ble Karnataka High Court in case of Mrs. Vanitha Gopal Shetty vs. ACIT reported in (2021) 129 taxmann.com 163 c) Decision of Hon’ble Kolkata Tribunal in case of Sandeep Kumar Shah vs. ITO reported in (2023) 157 taxmann.com 850 Printed from counselvise.com Page 6 of 6 ITA No. 2042/Bang/2025 11. We have also perused the judgements cited by the assessee and we are in full agreement that the facts of the present case is similar to the facts available in the judgements relied on by the assessee. Therefore we are following the principles laid down by the different High Courts and particularly the Jurisdictional High Court to the effect that the proceedings initiated on a dead person cannot be sustained under the provisions of the Act. We therefore set aside the orders of the AO as well as the Ld.CIT(A) as not sustainable since the orders are made on the deceased assessee. 12. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 10th February, 2026. Sd/- Sd/- (PRASHANT MAHARISHI) (SOUNDARARAJAN K.) Vice – President Judicial Member Bangalore, Dated, the 10th February, 2026. /MS / Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "