The Allahabad High Court has clarified that a notice under Section 148 of the Income Tax Act issued in the name of a deceased assessee is void ab initio and cannot confer jurisdiction on the Assessing Officer. Such a defect is not curable under Section 292B, is not validated by Section 159 unless proceedings had already been validly initiated during the lifetime of the assessee, and is not saved by Section 292BB through participation or objection by the legal representative. The Court also held that equitable doctrines have no role in supplying jurisdiction under tax law, and an order quashing such a notice does not amount to a finding or direction under Section 150(1) for issuing a fresh time-barred notice to the legal representative.
Applying these principles, the High Court quashed the notice dated 28 March 2025 issued under Section 148, along with all consequential proceedings, assessment orders, and demand raised pursuant to it. At the same time, the Court recorded that the petitioner’s act of filing a return in the name of the deceased was contrary to Section 140 and left it open to the Revenue to proceed in accordance with law on that aspect. In the epilogue, the Court also observed that the case exposed a legislative gap regarding proceedings against estates of deceased assessees and directed that a copy of the judgment be transmitted to the Ministry of Finance, Government of India, so that the issue may be considered for appropriate statutory amendment.
The Division Bench comprising Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary treated the validity of the Section 148 notice as the central jurisdictional question. It held that a notice under Section 148 is the foundational step for reopening an assessment and must be issued to the correct person. If the notice itself is issued in the name of a dead person, it is not a mere procedural defect but a jurisdictional defect going to the root of the matter. Since a dead person has no legal existence for the purpose of receiving notice, replying, participating, or being assessed, reassessment proceedings initiated in that manner are void ab initio. The Court repeatedly emphasized that the Department cannot build valid reassessment proceedings on an invalid jurisdictional notice.
The Court then examined Section 159 dealing with legal representatives and drew a clear distinction between continuation of valid proceedings already initiated during the assessee’s lifetime and initiation of fresh proceedings after death. It held that Section 159(2)(a) applies where proceedings had already begun before death and may then continue against the legal representative. Section 159(2)(b) permits fresh proceedings only against the legal representative directly, not against the deceased person. Therefore, Section 159 could not rescue the Department in this case because the very first reassessment notice had been issued after the assessee’s death and in his own name. The Court held that if the Department wished to proceed, it had to issue notice to the legal representative within the prescribed limitation period.
On Section 292B, the Court rejected the Department’s argument that the defect was curable. It held that Section 292B protects notices and proceedings only against technical mistakes, defects, or omissions where the substance is otherwise in conformity with the Act. A notice to a dead person does not satisfy that standard because it defeats the statutory requirement that the reassessment notice must be issued to the assessee or a legally recognized person capable of being assessed. Accordingly, substituting the legal heir later could not retrospectively validate the void notice.
The Court also rejected reliance on Section 292BB. It observed that Section 292BB applies where an assessee appears or cooperates in proceedings and is then barred from objecting to defects in service of notice. Here, the assessee himself was already dead. The petitioner, as legal heir, had raised a jurisdictional objection before completion of reassessment and had not submitted to the Assessing Officer’s jurisdiction by responding on merits in a manner that would cure the defect. More importantly, the Court held that neither participation nor conduct can confer jurisdiction where the statute does not. There can be no estoppel against law in a taxing statute.
The Bench further held that equitable considerations could not save the Department’s action. Although it accepted that the petitioner had wrongly caused a return to be filed in the name of her deceased husband and observed that such conduct may have consequences under Section 140 and possibly Section 277, it made it clear that the Department cannot defend an otherwise illegal assumption of jurisdiction by invoking equity, waiver, acquiescence, or public revenue considerations. Taxing statutes must be strictly construed, and liability or jurisdiction must arise strictly from the statute, not from conduct or perceived unfairness.
Finally, the Court refused the Department’s attempt to rely on Section 150(1) to seek liberty for issuing a fresh notice beyond limitation. It held that an order quashing a void notice issued to a dead person is not a “finding” or “direction” that can trigger Section 150(1). Since the original initiation itself was void, there was no valid proceeding from which such a consequential finding or direction could emerge. Therefore, once limitation under Section 149 had expired, the Department could not revive the matter by treating the High Court’s judgment as a basis for a fresh reassessment notice to the legal representative.
Briefly, the case arose from reassessment proceedings initiated by the Income Tax Department for Assessment Year 2021-22 against late Sanjay Dubey, husband of the petitioner Asha Dubey. Sanjay Dubey had purchased, along with his son, a residential flat in Lucknow in October 2020, and during a later search conducted by the Department on the Omaxe Group, the Department allegedly found material suggesting an unaccounted cash transaction linked to that purchase. Sanjay Dubey died on 7 January 2024. After his death, the petitioner caused an income tax return for a later assessment year to be filed in his name through Aadhaar OTP verification.
Subsequently, on 28 March 2025, the Department issued a notice under Section 148 in the name of the deceased assessee, followed by notices under Section 142(1). When the petitioner received the notices, she informed the Department that her husband had already died and objected that proceedings against a dead person were void from inception. Despite this objection, the Department rejected her stand, substituted her as legal representative, and passed an assessment order and consequential demand on 24 March 2026 alleging escaped income from the supposed cash transaction.
