Estate of Vandravan P Shah Vs ACIT (ITAT Mumbai)
Reassessment on Deceased’s PAN Valid for Pre-Death Years; s.35AC Disallowance on Navjeevan Trust Sustained: ITAT Mumbai
ITAT Mumbai (E Bench) in Estate of Vandravan P. Shah vs ACIT (ITA Nos. 5401, 5402 & 5403/Mum/2024; AYs 2011-12, 2012-13 & 2017-18; order dated 23.12.2025) has partly rejected the assessee’s jurisdictional challenge and upheld the validity of reassessment proceedings initiated and completed in the name of the deceased through legal representative u/s 159, while also sustaining the disallowance of deduction u/s 35AC on alleged bogus donation to Navjeevan Charitable Trust.
The Tribunal drew a clear statutory distinction between s.159 and s.168, holding that:
- Income earned prior to death must be assessed in the name of the deceased through the legal representative u/s 159, even if an estate PAN exists
- Section 168 applies only to post-death income of the estate, not to pre-death years
- Reassessment notices issued and orders passed on the PAN of the deceased through legal representative are not void, relying on Bombay HC in Arvind Bhogilal
On merits, the reassessment was triggered by search findings in the case of Navjeevan Charitable Trust, revealing a cash-back accommodation-entry racket in the guise of donations eligible u/s 35AC. The AO disallowed ₹50 lakh donation claimed by the deceased, noting that:
