Calcutta HC Quashes Income Tax Section 154 Order Against Deceased Person

Murari Lal Soni Vs Union of India & Anr (Calcutta High Court)

Calcutta High Court has quashed an order issued under Section 154 read with Section 147 of the Income Tax Act, 1961, for the assessment year 2013-14, ruling it was passed against a deceased individual. The writ petition was filed by the daughter-in-law of the late assessee, Murari Lal Soni.

The petitioner’s counsel, Mr. Agarwal, argued that the assessee had passed away on March 20, 2022, well before the show-cause notice under Section 154 was issued on July 25, 2024. Despite being informed of the death, the Assessing Officer proceeded with the order.

The High Court observed that the Assessing Officer was aware of the assessee’s demise when the impugned order was passed. Consequently, the court deemed the order unsustainable in law and set it aside. However, the ruling clarified that this decision does not prevent the tax authorities from initiating proceedings against the assessee’s legal heirs in accordance with the law. The writ petition, WPO/189/2025, has been disposed of.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

The Court: 1. Challenging the order under section 154 read with section 147 of the Income Tax Act, 1961 (hereinafter referred to as “the said Act) dated 25t^h July 2024 for the assessment year 2013-14, the instant writ petition has been filed.

2. Mr. Agarwal, learned advocate appearing in support of the writ petition by drawing attention of this Court to the show cause notice and the response filed by the daughter-in-law of the assessee since deceased would submit that as on the date when the notice of proceeding was issued under section 154 of the said Act, the assessee had already expired. The factum of death of the assessee on 20^thMarch 2022 would corroborate from the death certificate of the assessee as appearing at page 36 of the writ petition. Mr. Agarwal would further submit that the Assessing Officer notwithstanding being aware on being put on notice as regards the factum of death of the assessee had proceeded to pass the order impugned. According to Mr. Agarwal, the same is not sustainable in law and should be set aside.

3. Having heard the respective parties and noting that when the show cause notice was issued under section 154 of the said Act the assessee had died and the factum of death being within the notice of the Assessing Officer when the order dated 25^thJuly 2024 was passed, in my view, the order passed by the Assessing Officer under section 154 of the said Act dated 25t^h July 2024 for the assessment year 2013-14 cannot be sustained, the same is accordingly quashed.

4. The aforesaid order shall, however, not stand in the way of the respondents from proceeding against the heirs of the assessee in accordance with law.

5. The writ petition being WPO/189/2025 is accordingly disposed of.