Late Shri Gopaliyengar Madabushi Muralidhar Vs ITO (Karnataka High Court)
The Karnataka High Court held that an assessment order passed in the name of a deceased assessee is unsustainable in law when the AO had knowledge of the death. In this case, the assessee died during the pendency of assessment proceedings. However, the AO completed the assessment u/s 143(3) in the name of the deceased on 27-12-2018.
The legal heirs contended that the AO was aware of the death because a notice u/s 142(1) had already been issued to the legal heirs. The Tribunal had earlier set aside the assessment and remanded the matter to the AO for fresh assessment.
The High Court examined the original assessment records and found that the AO had indeed issued notice dated 13-12-2018 to the legal heirs, which clearly showed that the AO had knowledge of the death of the assessee. Once such knowledge existed, the AO ought to have proceeded against the legal heirs in accordance with law. Passing the assessment order in the name of a deceased person was therefore invalid.
The Court further observed that a remand by the Tribunal would have been justified only if the AO had no knowledge of the death. Since the AO was aware of it, the assessment itself was void and could not be revived through remand. Accordingly, the High Court set aside both the ITAT order and the assessment order, while keeping the issue of jurisdiction open as academic.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
