Section 148 Notice Issued to Dead Assessee Is Void Ab Initio, Cannot Be Saved by Section 292B or Section 159: Allahabad HC
The Allahabad High Court's Lucknow Bench quashed a reassessment notice and all consequential orders issued in the name of a deceased assessee, holding the defect jurisdictional and incurable under any saving provision of the Income Tax Act, 1961.
A Division Bench of the Allahabad High Court, Lucknow, comprising Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary, has quashed a notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2021-22, along with all subsequent orders — including the assessment order dated March 24, 2026 and the demand notice under Section 156 — on the ground that the notice was issued in the name of an assessee who had died more than a year before the proceedings were initiated. The court held, across five framed issues, that the defect was not procedural but jurisdictional, and that no provision of the Act — whether Section 159, Section 292B, Section 292BB, or Section 150 — could cure or revive it. The judgment also directed the transmission of a copy to the Ministry of Finance, noting that a legislative gap had caused prejudice to the revenue and recommended Parliamentary intervention.
The Dispute Before the Court
Shri Sanjay Dubey, who served as Chief Management Officer in the U.P. Secretariat and was a regular income tax assessee, died on January 7, 2024. His widow, Smt. Asha Dubey, the petitioner, completed the last rites and travelled to the United States to stay with her daughter on May 31, 2024, returning on September 6, 2024.
On October 15, 2020, the deceased had purchased a residential flat in Grand Omaxe, Lucknow along with his son for a total consideration of Rs. 82,83,353/-. Of this, Rs. 55,52,954/- was paid by the deceased entirely through banking channels, and an allotment letter was issued in his name. The Income Tax Department conducted a search under Section 132 of the Act on April 1, 2021 on the Omaxe group, and it was alleged that a cash transaction of Rs. 25,97,000/- had been made by the deceased. Documents seized during the search reflected a discrepancy of Rs. 27,44,000/-.
After returning to India, the petitioner instructed her Chartered Accountant to file the Income Tax Return for Assessment Year 2024-25 on behalf of her late husband. The return was electronically transmitted on July 30, 2024 and ultimately filed on November 5, 2024. It was filed in the name of the deceased assessee and verified through Aadhaar OTP, disclosing total income of Rs. 39,79,990/- and total tax of Rs. 9,29,754/-.
On March 20, 2025, the Principal Commissioner of Income Tax approved the initiation of reassessment proceedings. On March 28, 2025 — three days before the limitation period under Section 149 expired — a notice under Section 148 was issued in the name of the deceased assessee. A further notice under Section 142(1) followed on January 7, 2026, also in the name of the deceased.
On February 2, 2026, the petitioner responded for the first time by filing a reply informing the department of her husband's death and raising a preliminary objection that all proceedings were void ab initio. The department rejected the objection on February 20, 2026, on two grounds: that it had not been intimated of the death, and that there had been active misrepresentation by filing the ITR in the deceased's name. In the same order, the department substituted the petitioner's name as legal representative and directed compliance. The petitioner continued to reiterate her jurisdictional objection at every stage.
The department ultimately passed an assessment order under Section 147 in the name of the petitioner as legal heir, assessing additional income at Rs. 69,06,520/- and determining tax liability at Rs. 39,67,330/-, with a demand notice under Section 156 dated March 24, 2026. The petitioner challenged the Section 148 notice, the Section 142(1) notices, the order rejecting preliminary objections, the assessment order, and the demand notice by way of a writ petition under Article 226 of the Constitution.
The Legal Issues Framed
The bench structured its analysis around five issues:
Issue I asked whether the revenue could invoke Section 159 to validate reassessment proceedings initiated against a person already dead on the date of initiation.
Issue II asked whether the issuance of a Section 148 notice to a deceased assessee constituted a mere “mistake, defect or omission” curable under Section 292B, or a jurisdictional defect.
Issue III asked whether the legal heir had waived her jurisdictional objection by filing returns and participating in proceedings, thereby attracting Section 292BB.
Issue IV asked whether reassessment proceedings could be justified on equitable grounds to protect public revenue.
Issue V asked whether, if the court decided against the department on the validity of the notice, the order of quashing would itself constitute a “finding or direction” enabling a fresh Section 148 notice to the legal representative under Section 150(1).
How the Bench Reasoned
Issues I and II — Section 159 and Section 292B
The bench held that Section 148 is a jurisdictional notice. The sine qua non for the Assessing Officer to assume jurisdiction to reopen an assessment is that the notice must be issued in the name of the correct person — a living person. Issuing the notice to a dead person is not a procedural irregularity; it goes to the root of the matter and makes the notice void ab initio.
The court distinguished the two limbs of Section 159(2). Section 159(2)(a) applies only where proceedings were already pending against the assessee during his lifetime — those proceedings may continue against the legal representative from the stage at which they stood on the date of death. Section 159(2)(b) authorises fresh proceedings which could have been taken against the deceased if he had survived, but such fresh proceedings must be initiated directly in the name of the legal representative, not in the name of the dead person. Neither limb validates a notice issued to someone who was already dead when the notice was dispatched. The court held: “Section 159 presupposes a valid foundational notice issued during the lifetime of the assessee.”
The bench considered the department's reliance on Section 292B, which protects notices from invalidity on account of any mistake, defect, or omission provided the notice is in substance and effect in conformity with the intent and purpose of the Act. The court rejected this argument. For Section 292B to operate, the notice must be in substance consistent with the Act's intent. A notice issued to a dead person is not in conformity with Section 148 — which contemplates service on the assessee — or with the scheme of Section 159. The defect is foundational, not technical, and Section 292B cannot cure a jurisdictional error.
The bench drew extensively on consistent rulings across multiple High Courts. The Madras High Court in Alamelu Veerappan v. Income Tax Officer, the Delhi High Court Division Bench in Savita Kapila v. Assistant Commissioner of Income Tax, the Bombay High Court Division Bench in Sumit Balkrishna Gupta v. Assistant Commissioner of Income Tax and in Shri Devendra v. Addl./Joint Commissioner of Income Tax, and the Gujarat High Court Division Bench in Bhupendra Bhikhalal Desai v. ITO — whose special leave petition was dismissed by the Supreme Court — had each quashed Section 148 notices issued to deceased assessees as void ab initio and held that neither Section 292B nor Section 159 could rescue such notices. The Delhi High Court's ruling in Spice Entertainment Ltd. v. CST, affirmed by the Supreme Court in CIT v. Spice Enfotainment Ltd., which held that framing an assessment against a non-existent entity is a jurisdictional defect incapable of cure, was found directly on point.
The respondents had cited several judgments, including the pre-independence Bombay High Court decision in Maharaja of Patiala v. Commissioner of Income Tax, the Constitution Bench decision in Estate of Late Rangalal Jajodia v. Commissioner of Income Tax, and the Supreme Court's decision in CIT v. Jai Prakash Singh. The bench distinguished each. In Maharaja of Patiala, both the concurring judges had themselves observed that assessing a deceased person is “obviously a nullity”; the leniency shown in that case arose because the Foreign Minister of the present Maharaja had himself understood the proceedings and participated by filing returns and pursuing appeals — a factual matrix absent here. In Rangalal Jajodia, the proceedings had commenced during the lifetime of the assessee and continued after death. In Jai Prakash Singh, the issue was failure to serve notice on all legal heirs where some legal heirs had already filed returns and participated, not a notice issued to a dead person in the first place.
The court also rejected reliance on the Supreme Court's Skylight Hospitality LLP decision, where a wrong name in a notice had been treated as a clerical error under Section 292B. That case involved a limited liability partnership that had taken over a private limited company; the court found the situation entirely different from a notice issued to a person who was dead.
On the absence of any statutory obligation on legal heirs to inform the department of a death, the bench affirmed that no such duty exists under the Act. Failure to intimate death cannot extend the period of limitation, and cannot shift the jurisdictional defect from the department to the petitioner.
Issue III — Section 292BB and Waiver
The bench held that Section 292BB, which creates a statutory estoppel where an assessee has appeared or cooperated in proceedings without raising timely objection, applies only to the assessee — not to a legal representative. The dead assessee could not appear or cooperate; it was the petitioner-wife who filed objections, and she raised the jurisdictional challenge at the very first opportunity after receipt of the Section 142(1) notices. Section 292BB's precondition — that the assessee himself appeared or cooperated — was simply absent.
More fundamentally, the bench held that jurisdiction under a taxing statute cannot be conferred by consent, waiver, acquiescence, or conduct of parties. The Supreme Court's two-judge bench in Principal Commissioner of Income Tax v. Maruti Suzuki India Limited, speaking through Dr. D.Y. Chandrachud, J., had expressly held that participation by a successor entity in proceedings initiated against a non-existent entity does not create estoppel against law. The same principle applied here.
Issue IV — Equity in Tax Law
The bench held that equitable considerations have no place in the interpretation of taxing statutes. A taxing statute must be interpreted strictly according to what is clearly expressed; the court cannot imply provisions not expressly enacted, cannot supply deficiencies, and cannot read down provisions to prevent revenue loss. Article 265 of the Constitution of India — which mandates that no tax shall be levied or collected except by authority of law — was central to this reasoning.
Issue V — Section 150(1) and Fresh Notice
The department had argued, alternatively, that even if the Section 148 notice was quashed, the court's order would constitute a “finding or direction” within Section 150(1), which overrides the limitation period under Section 149 and permits a fresh notice to be issued at any time to give effect to findings or directions of a court.
The bench rejected this argument. Section 150(1) is triggered only where there is an actual finding or direction by an authority in an appeal, reference, revision, or by a court in any proceeding under any other law. An order quashing a Section 148 notice as void ab initio is not such a finding or direction. Since no valid notice was ever issued, no valid proceeding was ever pending; the High Court's order does no more than reassert the elementary legal position that the initiation was void.
Even if Section 150(1) were applicable, Section 150(2) would bar it: that sub-section expressly provides that the benefit of Section 150(1) is unavailable where the relevant assessment year was already barred by limitation at the time the order which was the subject matter of the appeal or revision was made. The court found that the revenue could not use a quashing order obtained by the assessee as a springboard to revive time-barred proceedings. The correct course — issuing a fresh Section 148 notice directly upon the legal representative within the Section 149 limitation period — had never been taken.
The Department's Conduct and the Legislative Gap
The bench did not confine itself to the legal analysis. It observed that the Income Tax Department had been in possession of the allegedly incriminating search material since April 1, 2021, yet took no action for more than three years. The Section 148 notice was issued on March 28, 2025 — three days before the limitation period expired. Despite receiving categorical intimations of the assessee's death in February 2026, the department pressed ahead with assessment proceedings.
The bench recorded that the petitioner had herself contributed to the situation by filing and verifying the Assessment Year 2024-25 return in the name of the deceased through Aadhaar OTP after his death, which the court described as acting in an illegal manner contrary to Section 140 of the Act. However, taxing statutes require strict interpretation and the jurisdictional defect could not be cured on that account.
In its Epilogue, the bench noted that the outcome caused prejudice to the revenue and a possible loss to the public exchequer. It observed that a loophole existed where legal heirs could withhold information about a death, continue filings in the name of a deceased assessee, and thereafter seek annulment of proceedings after limitation expired. Describing the matter as requiring legislative attention, the court directed the Senior Registrar to transmit a copy of the judgment to the Ministry of Finance so that Parliament may consider appropriate amendments to the Income Tax Act and analogous taxing statutes.
Order
The Division Bench allowed the writ petition. The court quashed the notice dated March 28, 2025 issued under Section 148 for Assessment Year 2021-22. All proceedings, orders, and demands consequential to that notice — including the notice under Section 142(1) dated January 7, 2026, the order dated February 20, 2026 rejecting preliminary objections, the assessment order under Section 147, and the demand notice under Section 156 dated March 24, 2026 — were quashed and set aside. The Senior Registrar was directed to send a copy of the judgment to the Ministry of Finance, Government of India.