Smt. Chanda Shreeram Singh Vs ITO (ITAT, Mumbai Bench)
A Notice Issued Two Days After Death Cannot Expect a Reply From the Deceased: CIT(A)’s Order Against Dead Assessee Held Null & Void – 442-Day Delay Condoned
Summary: The appeal arose from the assessment of capital gains on the sale of immovable property belonging to Late Shri Shreeram Rekhai Prasad Singh.
The AO treated the gain as short-term capital gain and computed it without allowing indexed cost of acquisition. He also invoked section 50C and adopted the stamp-duty value of ₹39,47,000 as against the actual sale consideration of ₹28,09,000, resulting in a difference of ₹11,38,000.
The assessee contended that part of the sale consideration had been received on 02.11.2012, whereas the property was registered only on 12.07.2016. Therefore, the stamp-duty value prevailing on the earlier agreement or payment date ought to have been considered by applying the first and second provisos to section 50C.
The assessment was challenged before the CIT(A). However, the CIT(A) dismissed the appeal in limine as not maintainable u/s 249(4)(b) on the ground that the assessee had not filed a return of income and had not paid an amount equal to the advance tax payable.
The matter eventually reached the Tribunal through the deceased assessee’s wife and legal heir, Smt. Chanda Shreeram Singh, with a delay of 442 days.
The legal heir explained that Shri Shreeram Singh had died on 07.10.2024. Significantly, the CIT(A) issued the notice of hearing on 09.10.2024—two days after his death.
The widow was severely affected by the sudden and untimely demise of her husband. She was unaware of the pending appellate proceedings and the order subsequently passed by the CIT(A). Her health and emotional condition following the bereavement rendered her incapable of attending to legal, financial and administrative matters for a considerable period.
It was therefore submitted that the delay in approaching the Tribunal was neither wilful nor deliberate but was caused by circumstances entirely beyond the legal heir’s control.
After considering the explanation and supporting material, including the death certificate, the Tribunal held that the assessee was prevented by reasonable cause from filing the appeal within the prescribed period. The delay of 442 days was accordingly condoned and the appeal was admitted.
On merits, the legal heir submitted that the assessment had been completed ex parte and the first appeal was rejected as not maintainable without giving her an opportunity to explain the relevant circumstances. She requested restoration of the matter so that proper replies and evidence could be furnished.
The Tribunal examined the CIT(A)’s action in dismissing the appeal u/s 249(4)(b). Under that provision, where no return has been filed, an appeal is ordinarily not maintainable unless the assessee has paid an amount equal to the advance tax payable. However, the proviso to section 249(4)(b) empowers the CIT(A), for good and sufficient reasons recorded in writing, to exempt the appellant from the operation of that requirement.
The assessee’s specific grievance was that the appeal had been dismissed without granting an opportunity to seek such exemption under the proviso.
The Tribunal found considerable force in this contention. The original assessee had died on 07.10.2024, whereas the notice of hearing was issued only on 09.10.2024. There was therefore no possibility of the deceased responding to the notice or making an application explaining why advance tax on the assessed capital gains had not been paid.
There was equally no opportunity to place before the CIT(A) the grounds on which exemption from section 249(4)(b) could have been sought. Those grounds included the assessee’s contention that the AO had failed to deduct indexed cost of acquisition, wrongly treated the gain as short-term and improperly adopted the registration-date stamp value without considering the earlier part-payment made in 2012.
These contentions had a direct bearing upon the existence and quantum of capital gains and, consequently, upon the alleged advance-tax liability. Nevertheless, none of them could be presented because the hearing notice itself was issued after the assessee’s death.
The Tribunal further recorded that the CIT(A) had passed the appellate order against a deceased person without bringing the legal heirs on record. Such an order was held to be null and void.
In these circumstances, the Tribunal restored the appeal to the file of the CIT(A). The CIT(A) was directed to grant the legal heir an adequate opportunity to seek exemption under the proviso to section 249(4)(b) and thereafter dispose of the appeal in accordance with law after providing a proper hearing.
The appeal was accordingly allowed for statistical purposes.
Author’s Comment
This decision involves more than compassionate condonation of delay. It identifies a foundational jurisdictional defect: an appellate order cannot validly be passed against a person who had already died without substituting and hearing the legal heir.
The proviso to section 249(4)(b) is equally important. Non-payment of advance tax where no return was filed does not always close the appellate door permanently. The CIT(A) possesses discretion to grant exemption for good and sufficient reasons. That discretion must be exercised judicially after allowing the appellant to explain the circumstances.
The Tribunal has not decided whether the capital gain was long-term, whether indexation was allowable or whether the 2012 stamp value should replace the 2016 value u/s 50C. All those questions remain open before the CIT(A).
For now, the legal principle is simple: a dead person cannot answer a hearing notice, seek statutory exemption or prosecute an appeal. When the notice was born two days after the assessee had died, the resulting appellate order could not remain alive.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT MUMBAI
This appeal is filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”] dated 26.11.2024, for the assessment year 2017-18.
2. The Assessee has raised the following grounds of appeal:
“1) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in dismissing the appeal in limine for non compliance with Section 249(4)(b) of the Income Tax Act, 1961 without affording the Appellant an opportunity to seek exemption under the proviso thereto, thereby violating the principles of natural justice. The Appellant prays that the appeal be admitted and decided on merits.
2) On the facts and in the circumstances of the case and in law, the Learned Assessing Officer (AO) has erred in issuing notice under sections 148 of the Act and in consequently framing the assessment order under section 147 read with section 143(3) of the Act, without providing to the Appellant a copy of the approval granted by the specified authority prior to issuance of notice under section 148A of the Act. The Appellant submits that non supply of the aforesaid material has resulted in violation of principles of natural justice and renders the reassessment proceedings bad in law.
3) On the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) erred in treating and confirming the capital gain arising from the sale of immovable property as Short Term Capital Gain. The Appellant prays that the capital gain be held as Long Term Capital Gain and taxed accordingly.
4) On the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) erred in computing capital gain at INR 28,09,000 without allowing deduction for the indexed cost of acquisition. The Appellant prays that the indexed cost of acquisition be deducted and only the net capital gain OR loss be brought to tax.
5) On the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) erred in making and confirming an addition of INR 11,38,000 under Section 50C by adopting the stamp duty value of INR 39,47,000 as the full value of consideration against the actual sale consideration of INR 28,09,000, without giving benefit of first and second proviso to section 50C of Income Tax Act, 1961. The appellant prays that the part payment of the consideration was made on 2nd November 2012 and registration was done on 12th July 2016 and hence the stamp duty value as on 2nd November 2012 should be considered.
6) On the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) erred in levying and confirming interest of INR 7,27,510 under Section 234A. The Appellant submits that the levy of interest under section 234A is not justified and be deleted.
7) On the facts and in the circumstances of the case, the Ld. Assessing Officer and the Ld. CIT(A) erred in levying and confirming interest of INR 7,69,082 under Section 234B. The Appellant denies the liability to pay interest under section 234B and prays that the same be deleted.
8) The appellant prays that the delay in filing the appeal may be condoned as there was a reasonable cause on the part of the appellant to not file the appeal within the statutory time limit. The appellant craves the permission to lead the evidence in this regard at the time of hearing
9) The Appellant craves leave to add, alter, amend OR withdraw any of the above Grounds of Appeal, which are without prejudice to one another.”
3. Learned Counsel for the assessee, at the outset, submitted that the assessee has filed the appeal with a delay of 442 days and has also filed an application for condonation of delay in filing the appeal before the Tribunal. Learned Counsel for the assessee, referring to page 26 of the paper book, which is the petition for condonation of delay, submitted that the appeal was not admitted on the ground that the assessee had not filed the return of income and had not paid an amount equal to the advance tax payable by the assessee.
4. Learned Counsel submitted that the delay occurred for the reason that the assessee, Shri Shreeram Rekhai Prasad Singh, expired on 07.10.2024 (death certificate enclosed) two days prior to the issuance of notice by the learned CIT(A), i.e., on 09.10.2024, and the assessee’s wife and legal heir, Smt. Chanda Shreeram Singh, was severely affected by the sudden and untimely demise of her husband. Therefore, the proceedings before the learned CIT(A), as well as the filing of the appeal against the order of the learned CIT(A), were delayed due to her not knowing about the order passed by the learned CIT(A). Further, she was not in a good state of health and was emotionally deprived following the loss, which rendered her incapable of attending to any legal, financial, or administrative matters for a considerable period after the passing of her husband. Therefore, Learned Counsel for the assessee submitted that the delay in filing the appeal was neither wilful nor indeliberate, but was due to the circumstances explained.
5. Considering the rival submissions and perusing the reasons adduced by the legal heir of the assessee in the application for condonation of delay, we are of the view that the assessee was prevented by reasonable cause from filing the appeal within the prescribed time. Thus, the delay in filing the appeal is condoned and the appeal is admitted.
6. Coming to the merits of the case, Learned Counsel for the assessee submitted that the assessment was made ex-parte and the appeal of the assessee was also dismissed by the learned CIT(A) as not maintainable for the reason that the assessee had not filed the return of income and had not paid the self-assessment tax payable. In view of the circumstances explained, as the assessee had expired and the legal heir was not aware of the proceedings, the matter may be restored to the file of the Assessing Officer for fresh adjudication, and the legal heir would be able to furnish the replies.
7. We have considered the rival submissions and perused the orders of the lower authorities. We observed that the learned CIT(A) dismissed the appeal of the assessee as not maintainable on the ground that the assessee had not filed the return of income and no advance tax had been paid invoking the provisions of section 249(4)(b) of the Act.
8. In Ground No. 1 of the grounds of appeal, the assessee contended that the appeal of the assessee was dismissed in limine for non-compliance of the provisions of section 249(4)(b) of the Act, without affording the assessee an opportunity to seek exemption under the proviso thereto for admission of the appeal for non payment of advance tax on capital gains, thereby violating the principles of natural justice.
9. We observed that the assessee expired on 07.10.2024, whereas the learned CIT(A) issued the notice of hearing on 09.10.2024, after the death of the assessee. There was no occasion for the assessee to reply to the notice or make an application seeking exemption under the proviso to section 249(4)(b) of the Act for admission of the appeal, though advance tax was not paid by the assessee. There was also no occasion for the assessee to explain the circumstances under which the assessee could not pay the advance tax on the capital gains assessed by the Assessing Officer.
10. In the grounds of appeal, the assessee contends that the Assessing Officer, while computing the capital gains, failed to allow deduction towards the indexed cost of acquisition to the assessee. In the grounds of appeal, the assessee also contends that the provisions of section 50C were adopted and the stamp duty value was taken as the full value of consideration against the actual sale consideration without giving the benefit of the first and second proviso to section 50C of the Act. Further, it was also contended that part payment of the consideration was made on 02.11.2012 and the registration was done on 12.07.2016 and, hence, the stamp duty value as on 02.11.2012 should be considered. Therefore, we observed that there was no occasion for the learned CIT(A) to consider any of the submissions of the assessee, which were the grounds for seeking exemption under the proviso to section 249(4)(b) of the Act. Further, the learned CIT(A) passed an order against a deceased person without bringing the legal heirs on record and thus the said order is null and void.
11. In these circumstances, we restore this appeal to the file of the learned CIT(A) for providing adequate opportunity to the legal heir of the assessee to seek exemption from the provisions of section 249(4)(b) of the Act and to dispose of the appeal in accordance with law after providing adequate opportunity to the assessee.
12. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11/09/2026.
