Dead Person Can’t Be Assessed: ITAT Quashes Entire Assessment Despite AO Being Informed of Death

Khursheed Dumasia Legal heir of late Sh. Rusi Kaikhushroo Bhumgara Vs ITO (ITAT Mumbai)

Dead Person Can’t Be Assessed: ITAT Quashes Entire Assessment Despite AO Being Informed of Death

The Mumbai ITAT quashed an assessment framed in the name of a deceased person, holding that any proceedings continued against a dead assessee after the Department was informed about the death are legally void and unsustainable.

In the case, the assessee had expired in January 2012, but the AO nevertheless proceeded to complete assessment under section 144 in October 2019 by making additions of ₹19 lakh towards alleged unexplained bank credits. The legal heir had specifically informed the AO about the death through a written reply along with the death certificate in response to notice issued under section 142(1).

Even before the CIT(A), the legal representative clearly stated that the appeal was being filed as legal heir of the deceased and once again furnished the death certificate. Despite this, both the AO and CIT(A) continued proceedings and passed orders in the name of the deceased person.

The Tribunal observed that once the Department was informed about the death, the authorities ought to have taken corrective steps and issued fresh proceedings in accordance with law instead of mechanically continuing against a non-existent person.

Relying on Bombay High Court rulings including Devendra v. JCIT and Santosh Kanakmal Munot v. ITO, the ITAT reiterated that an order passed in the name of a deceased person is a nullity in law. Accordingly, both the assessment order and appellate order were quashed in entirety.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

1. This appeal by the appellant is filed against the order of CIT(A)dated 22.09.2025 for Assessment Year (A.Y.) 2017-18.The assessee has raised the following grounds of appeal:

“1. On the facts and the circumstances of the case, the order passed by the Id. CIT(A) is bad on facts and in law.

2. The order of the Id. CIT(A) is bad in law and vitiated inasmuch as it is passed in the name of the deceased.

3. Without prejudice, the Id. CIT(A) erred in not deciding the legal issue that the Appellant had expired and the assessment made in his name was null and void.

4. The Id. CIT(A) erred in not holding that the assessment proceedings are without jurisdiction as the alleged notice under section 142(1) calling upon the deceased to file a return was not issued/served as statutorily required.

5. The Id. CIT(A) erred in remanding the matter to the AO for making a fresh assessment order in the hands of the Appellant, when such an assessment was legally void for the Deceased-Appellant could not have possibly deposited cash in the bank account after his death and the alleged income is post the death of the Deceased-Appellant.

6. The Id. CIT(A) erred in remanding the matter to the AO when no such addition could have been made on merits since the exact amount of cash redeposited by the deceased- Appellants daughter in the bank account during the demonetization period was withdrawn earlier from the same bank account during the same financial year.

7. The Id. CIT(A) ought to have held that no interest was chargeable under sections 234A to 234D of the Act.

8. The Id. CIT(A) erred in not quashing the initiation of penalty under sections 271AAC, 272A(1)(d) and 271F of the Act. ”

2. Rival submissions of both the parties have been heard and record perused. Shri Percy J. Pardiwalla Advocate Senior Advocate (learned Senior Advocate) submits that assessment was passed against the deceased assessee. The Assessing Officer passed assessment order on 31.10.2019. However, the assessee has expired on 16.01.2012. The Assessing Officer (AO) was informed about the death of assessee vide reply/letter dated 31.10.2019, filed in response to notice dated 23.08.2019, which was issued in the name of deceased assessee Mrs. Khursheed Dumasia. Copy of letter/reply dated 31.10.2019 with copy of death certificate is placed on record. The legal heir/appellant again while filing appeal before the CIT(A) in the statement of fact clearly mentioned that appeal is filed by the legal representative. The death certificate was also filed while filing the appeal. The lower authorities instead of issuing any fresh notice under section 148 in the name of legal heir continued the proceeding against the dead person. The Ld. Senior Counsel submits that it is an admitted position under the law that assessment order passed against dead person is nullity. The Ld. Senior Counsel submitted that there are series of decisions of different High Courts, wherein it was held that legal heirs have no statutory obligation to intimate death of the assessee to the revenue department. However, in the present case the legal heirs of the assessee intimated the Assessing Officer about the death of the assessee at the initial stage. Therefore, assessment order is to be quashed being invalid. To support his submission, the Ld. Senior Counsel relied upon the decision of Bombay High Court in Devendra vs. JCIT in WP No.5557/2022 dated 13.07.2023 and in Santosh Kanakmal Munot (legal heir of Shri Kanaklal Ramchand Munot) vs. ITO in WP No.4885/2022 dated 29.04.2022. On merit, the learned Senior Counsel submits that AO made addition on account of credit in the Bank account. The impugned bank account was in the joint name of appellant and assessee. The appellant is Non-Resident Indian (NRI) and entire credit in the bank account was explained.

3. On the other hand, the Ld. Sr. DR of the revenue supported the order of lower authorities.

4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We have also deliberated on various case laws relied by Ld. Senior Counsel. On perusal of record, we find that AO ompleted assessment on 31.10.2019 under Section 144 of the Act. The AO r while passing the assessment order made addition of Rs.19,00,000/- on account of credit entries in the bank account of assessee. The said bank account in Bank of India is a joint account in the name of Rushi Kaikhushroo Bhumgara. We find that the legal heir of the assessee in response to show-cause notice dated 23.08.2019 issued in the name of deceased assessee, vide her reply dated 31.09.2019 communicated to the AO about the death of the assessee in January 2012. The legal heir also furnished his death certificate of assessee. We find that AO in assessment order has nowhere mentioned about such fact. We further, find that while filing appeal before CIT(A) the legal heir again contended that the appeal is filed by legal heir of deceased assessee. The Ld. CIT(A) instead of taking any corrective steps again passed the order in the name of deceased assessee. It is an admitted position under law that any order passed in the name of deceased person is not legally sustainable order. Hence, the assessment order dated 30.10.2019 as well as order of ld CIT(A) dated 22.09.2025 for assessment year 2017-18 is quashed/set aside.

5. In the result, the appeal raised by the assessee is allowed.

Order pronounced in the open Court on 11/05/2026.