Dear friends, as we are aware that under normal circumstances, tax is levied upon the person, who has earned income. The income tax considers him/her as assessee and income tax will be levied on all income he has earned in previous year. There are three types of assessees such as Resident and Ordinary Resident, Resident but not ordinary resident and non-resident. The income tax will be calculated after giving various rebate and deductions.

However, there are various cases in which it is not possible to find our real person to access tax on some income due to various circumstances. In these cases, it is not possible to collect tax from person, who has earned income due to some circumstances such as death of an assessee, etc.

The Government has introduced Chapter XV, which lays down liability of various persons who may be liable to pay the tax on such income.

This Chapter XV has fastened the liability in the below mentioned cases;

  • Liability of a Legal Representative in case of death of a person [Section 159];
  • Liabilities of a representative assessee as regards income in respect of which he is a representative assessee of another person [Section 160 & 167];
  • Liability of an Executor in respect of income of the estate of a deceased person [Section 168 & 169];
  • Liability of a predecessor and a successor to business otherwise than death [Section 170].


As per S. 2(7) of the Income Tax Act, 1961, unless the context otherwise requires, the term “assessee” means a person by whom any tax or any other sum of money is payable under this Act, and includes, –

(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or assessment of fringe benefits or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person;

(b) every person who is deemed to be an assessee under any provision of this Act;

(c) every person who is deemed to be an assessee in default under any provision of this Act.

From above definition, we can construe that normally the term ‘Assessee’ is considered as one who is supposed to pay tax under the Income Tax Act. There are different categories of Assessees, who are liable to pay tax, interest and penalties in case normal assessee is not available for assessment.



i) any person against whom proceedings under Income Tax Act are going on, irrespective of the fact whether any tax or other amount is payable by him or not;

ii) any person who has sustained loss and filed return of loss u/s 139(3);

iii) any person by whom some amount of interest, tax or penalty is payable under this Act;

iv) any person who is entitled to refund of tax under this Act.


A person may not be liable only for his own income or loss but he may also be liable for the income or loss of other persons e.g. agent of a non-resident, guardian of minor or lunatic etc. In such cases, the person responsible for the assessment of income of such person is called representative assesses. Such person is deemed to be an assessee.


i) In case of a deceased person who dies after writing his will the executors of the property of deceased are deemed as assessee.

ii) In case a person dies intestate (without writing his will) his eldest son or other legal heirs are deemed as assessee.

iii) In case of a minor, lunatic or idiot having income taxable under Income-tax Act, their guardian is deemed as assessee.

iv) In case of a non-resident having income in India, any person acting on his behalf is deemed as assessee.


A person is deemed to be an assessee-in-default if he fails to fulfill his statutory obligations. For example, an assessee who fails to pay the demand u/s 156 within 30 days, in full, shall be deemed to be an ‘Assessee in Default’, except in circumstances where he has obtained Order staying the demand in due course. An assessee in default will continue to be so, unless he has cleared the demand/ obligations in full.

Further, in case of an employer paying salary or a person who is paying interest, it is their duty to deduct tax at source and deposit the amount of tax so collected in Government treasury. If he fails to deduct tax at source or deducts tax but does not deposit it in the treasury, he is known as assessee-in-default.


Meaning: Section 2(19) states that the term “legal representative ‘‘in the Income -tax Act, 1961 has the meaning assigned to it in clause (11) of section 2of the Code of Civil Procedure, 1908. Section 2(11) of the Code of Civil Procedure provides as follows:

“Legal representative” means a person who in law represents the estate of a deceased person and includes any person who intermediates with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued.

It is not necessary that the legal representative should be the beneficial owner of the estate. Nor need he be in possession of any property of the deceased. It is sufficient that the estate devolves on him. The Act expressly declares that the legal representative is deemed to be an assessee for the purpose of this Act.


Where an individual assessee has died below mentioned situation arises;

i) The income earned by the assessee during his life time has been received by him. It only remains to be assessed or the taxes on the income, already assessed, is still to be recovered;

 ii) Items of income of the deceased are received after his death by his legal heirs, executors or administrators;

 iii) On the death, the assets of the estate vest, by testate or intestate succession on the heirs or legatees in specie or in specified shares and the income from the time of death accrues or arises to and received by them;

 iv) On death, the estate vests in the executors or administrators for the purpose of administration and, pending such administration, the executors or administrators are in receipt of the income of the estate.


Section 159(1)- where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.

Note:  the legal representatives of deceased person are made liable to pay out of deceased estate the tax, penalty, interest or any other sum that would have been payable by the deceased.


For the purpose of making an assessment or reassessment [ Section 147] of the income of the deceased and for the purpose of levying any sum in the hands of the legal representatives, the following procedure shall apply;

i) Any proceeding taken against the deceased before his death shall be deemed to have been taken against the legal representative and may be continued against the legal representative from that stage;

 ii) Any proceedings, which could have been taken against the deceased if he had survived, may be taken against the legal representative;

 iii) All provisions of the Act shall apply accordingly;

iv) As per provisions of Section 159(3), the legal representative of the deceased shall be considered as deemed assessee;

The liability of legal representative shall be limited to the extent to which the estate of deceased is capable of meeting the tax liability.

PERSONAL LIABILITY OF LEGAL REPRESENTATIVE [ Section 159(4)]; where legal representative creates a charge on or disposes of or parts with any asset of the estate of the deceased, while the liability for tax on income of the deceased remains undischarged, the legal representative shall be personally liable for any tax payable by him in his capacity as legal representative. However, such liability is limited to the value of assets charged, sold or parted with.

Note: in this case personal liability of legal representative shall be limited to only tax payable and not for interest or penalty charges.


1. CIT Vs. Hukumchand Mohanlal (1971) 82ITR624(SC); it was held that although income arising after the date of death is treated as income of the estate and is taxable in the hands of the executors under Section 168 but it will be assessed in the hands of the legal representatives under Section 159.

2. Palmer Vs. Cattlemore (1937) 21 TC 191 & Arvind Bhogilal Vs. CIT (1976) 105 ITR 764(Bom): it was held that where death occurs in the middle of an accounting year, it may be necessary to apportion the accrued income on a time basis except where the income accrues, not de in diem but on a specific day which may fall after date of death.

3. CIT Vs. Dalumal Shyamuchand (2005) 276 ITR 62 (MP); where an assessee dies, pending any assessment proceedings, it is duty of Assessing Officer to ensure compliance of Section 159(2) by bringing legal representatives on record before passing any assessment order. Hence, the assessment order passed by the Assessing Officer without bringing the legal representatives on record was not justified.

4. CIT Vs. M. Hemanathan (2016) 384 ITR 177(Madrass); proceedings initiated on a dead person is nullity and are different from proceedings initiated on an alive person which continues after death of such person. Service and participation in such proceedings by legal heirs dose not save it from nullity.


i) it means that if an income tax proceeding going on an assessee and he has died before assessment order or decision, the proceedings will be carried on and legal representatives will be assessed to the extent of deceased estate. But an Assessing Officer does no issue notices or start proceedings on a person, who has already died on the date of issue of proceeding.

 ii) It necessary for an Assessing Officer to bring legal representatives of a deceased assessee on record first.


i) Where proceedings have come to a conclusion during the lifetime of the deceased but assessment order was passed in the name of the deceased though by that time the officer has come to know of the death, the assessment order has been upheld as valid. [ Joseph Joseph Vs. ITO (Ag.) (1973) 92 ITR 114(Kerala)].

 ii) Where legal representatives have appeared voluntarily or in response to notices and have allowed the proceedings to continue against the deceased without objection, the assessment may be only sent aside for being done a fresh, not annulled. [ CIT Vs. Roshan Lal (1982) 134 ITR 145(Delhi)].

 iii) Where a legal representative has filed return in response to notice received from the department, without informing that there are other legal representatives. The assessment cannot be annulled. [ Sajjan Kumar Saraf Vs. CIT (1978)114 ITR 155(Kolkata)]. 

iv) Assessment on a legal representative without notice to all the representatives is a procedural irregularity it was held in case of CIT Vs. Jai Prakash Singh (1996) 85 Taxmann 407(SC). The Supreme Court held that where after death of an individual “B”,” J” one of his ten legal representatives filed returns and notice was issued to “J” under Sections 142(1) and 143(2) and he complied with it and the assessment was duly computed, omission to service notice to all legal representative of “B” was only an irregularity and not a nullity.

 v) In another case it was held that where an assessment order was made without notice to all legal representatives, it is procedural irregularity and liable to be corrected. [ CIT Vs. Pushpa Devi (2003) 132 Taxmann 506(Rajasthan].

vi) CIT Vs. Hemanathan (2016) 68 22 (Madras); The Original Assessment Order was a Scrutiny Assessment. After two years, the Commissioner sought to invoke Section 263. The assessee has died in meantime. The show cause notice under Section 263 was issued after death of the assessee. The benefit can be given to the Department that they were not aware the death of the assessee on the date of issue the notice. But the notice was sent through post, returned with the endorsement that the addressee was dead. Thereafter the department served the very same notice on the legal heirs of the deceased through a messenger. In this case the department cannot take advantage of provisions of Section 159(3), but if Department has issued the same notice taking recourse to the provisions of Section 159(3) to the legal heirs of the deceased, the deeming fiction could have been taken advantage of by the Department. It is too late in the day for the Department to take advantage of the same. The case on hand will not fall under the said exception. Therefore, the very initiation of the proceedings against the dead person and the continuation of the same despite having noticed the factum of death of the assessee, cannot be approved.



Section 159(1)- where a person dies, his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.

Note: The above words do not imply that there should a separate assessment in respect of the deceased estate(separate from personal assessment of legal representatives) but also that the computation of income of the deceased estate shall have to be made in the status applicable to the deceased, granting all reliefs, which deceased may be entitled to in respect of that status, and calculating the deductions and allowances and rebates that the deceased may be entitled to ,and finally levying the tax at the average rate applicable to the deceased.   

In case of an assessee has died during accounting year, then there should be two assessment;

  1. One from start of assessment year to the date of death of assessee;
  2. Two after the date of death of assessee to the end of financial year.


Section 159 applies only in respect of income of the deceased only up to the date of death and not up to the end of accounting year in which death occurs. If there is a will of deceased and executor is appointed, the income of the estate of the deceased for the period from the date of death of the deceased to the end of accounting year, will be taxed in the hand of executors till estate of the deceased is distributed among legal heirs of the deceased.


Tapati Pal Vs. CIT (2000) 241 ITR 468(Kolkata); it was held that penalty proceeding for a default committed by the deceased can be started or continued against the legal representatives under Section 159, which applied not only amount of tax but also any other sum i.e. penalty, interest also.

Section 221: provides that a legal representative can be panelised for his own default under different provisions of Income Tax Act, 1961.

Section 271(1): a legal representative shall be liable to penalty if he has failed to file return of deceased within due date of has filed incorrect income tax return of deceased.


i) a legal representative is not liable to be prosecuted for offences under the Act. 

ii) Under Wealth Tax, no penalty can be levied on legal representative for default of the deceased assessee as provisions of Section 18 of Wealth Tax Act, 1957(relating to penalty) are outside of ambit of Section 19, dealing with liability to assessment in special cases. 

CONCLUSION:  There are some other types of deemed assessees also. We shall consider and discuss on them in our next article. As we are aware that paying our taxes on time will help a lot in nation building. The Government has provided various rebates and deductions, while computing our taxable income. The Government has considered us an honest citizen and generally considered returns of income we are filing as true and correct. Only in some cases the authorities securitize returns filed by us. The Government has recently introduced Faceless Assessment facility, which will be held assessees a lot and save a lot of time and money. We shall participate in progress of our country by paying taxes at time and accurately.


DISCLAIMER; The entire contents of this article have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, author assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws and take appropriate advice of consultants. The user of the information agrees that the information is not professional advice and is subject to change without notice. Author assume no responsibility for the consequences of the use of such information.

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A Qualified Company Secretary, LLB , LIII , Bsc( Maths) BHU, Certification in Insurance Risk Management ( ICSI-III) have completed Limited Insolvency Examination and having more than 20 years of experience in the field of Secretarial Practice, Project Finance, Direct Taxes ,GST, Accounts & F View Full Profile

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