Court holds that reassessment proceedings initiated against a deceased assessee are without jurisdiction; fresh notice must be issued to legal representatives within limitation period; directs Ministry of Finance to consider legislative amendments to plug existing legal lacuna
In a landmark decision dated July 21, 2026, the Allahabad High Court (Division Bench, Lucknow) in the case of Smt. Asha Dubey v. Union of India has held that a notice under Section 148 of the Income Tax Act, 1961 issued against a deceased person is void ab initio. The court quashed the entire reassessment proceedings initiated in the name of the deceased, holding them to be without jurisdiction and consequently null and void.
The case arose when the Income Tax Department issued a notice under Section 148 for Assessment Year 2021-22 to the deceased husband of the petitioner, Shri Sanjay Dubey, who had passed away on January 7, 2024. Despite the death, the petitioner filed the Income Tax Return for the Assessment Year 2024-25 in the name of her deceased husband, verified electronically using his Aadhaar OTP. The department proceeded with reassessment notices and subsequent proceedings against the deceased person, substituting the petitioner as the legal representative only at a later stage.
The petitioner challenged the reassessment notices and consequential orders on the ground that the proceedings initiated against the deceased were void ab initio as the law mandates that reassessment notices must be issued to the correct person who is alive, or to the legal representative if the assessee dies after initiation of proceedings. The court agreed with the petitioner, extensively analyzing statutory provisions and precedents.
- Key findings of the court include:
- 1. Jurisdictional Defect in Issuance of Notice to Deceased: The issuance of a Section 148 notice to a deceased assessee is a fundamental jurisdictional defect that cannot be cured under Section 292B of the Income Tax Act, which is meant to rectify mere procedural or technical defects. Such notice fails the foundational requirement for reassessment and all subsequent proceedings are void.
- 2. Scope of Section 159: Section 159 of the Income Tax Act allows continuation of proceedings against legal representatives only if proceedings were validly initiated against the assessee during his lifetime. It does not authorize initiation of proceedings against a deceased person or validate a notice issued after death in the deceased’s name.
- 3. No Statutory Obligation to Inform Death: The legal representatives are under no statutory obligation to intimate the department regarding the death of the assessee. The department cannot rely on non-intimation as a ground to validate the notice or extend the limitation period.
- 4. Section 292BB and Waiver Not Applicable: The doctrine of estoppel or waiver under Section 292BB applies only if the original assessee appeared or cooperated in proceedings. In this case, the deceased person could not cooperate. The petitioner's conduct in filing a return in the deceased’s name does not create jurisdiction or estop raising jurisdictional objections.
- 5. Strict Interpretation of Taxing Statutes: The court reiterated the settled principle that taxing statutes must be strictly construed, and equitable doctrines such as estoppel, waiver, approbate and reprobate have no place in the imposition or validation of tax liability. Ambiguities are to be resolved in favor of the assessee.
- 6. Limitation Bar on Fresh Notice: The court held that the quashing of the invalid notice under Section 148 does not amount to a ‘finding’ or ‘direction’ under Section 150(1) to lift the limitation bar for issuing a fresh notice to the legal representatives. Since the reassessment order was passed beyond limitation, no fresh notice can be issued beyond the statutory period.
- 7. Direction to Government: The court observed that the present case exposes a lacuna in the law whereby the absence of a provision mandating intimation of death leads to prejudice against the revenue. It directed that a copy of the judgment be sent to the Ministry of Finance, Government of India, for consideration of appropriate legislative amendments to plug this gap.
The court thus allowed the writ petition, quashing the notice under Section 148 dated March 28, 2025, all subsequent notices, the reassessment order, and the demand order, holding them to be void ab initio. It clarified that the Income Tax Department remains at liberty to initiate proceedings against the legal representatives within the prescribed limitation period by issuing a valid notice in their name.
This judgment reiterates the principle that tax proceedings must comply strictly with statutory provisions, particularly jurisdictional conditions, and that courts will not countenance assessments or proceedings initiated against non-existent legal entities such as deceased persons. It also underscores that the burden lies on the revenue to issue valid notices timely and in the correct name, and that legislative reforms may be necessary to address procedural lacunae affecting revenue interests.
Bottom Line:
Notice under Section 148 of the Income Tax Act, 1961 issued against a deceased person is void ab initio, rendering all consequential proceedings null and void; reassessment proceedings can only be validly continued against legal representatives if initiated during the lifetime of the assessee, and such proceedings must comply strictly with statutory provisions including limitation periods.
Statutory provision(s): Income Tax Act, 1961 Sections 142(1), 147, 148, 148-A, 149, 150, 159, 292B, 292BB
Smt. Asha Dubey v. Union of India, (Allahabad)(DB)(Lucknow) : Law Finder Doc id # 2946765
