Facts of the Case

The present writ petition pertains to Assessment Year 2017–2018, wherein the petitioners (legal heirs of late Mr. Kuldip Kohli) challenged:

  • Notice dated 06.04.2021 issued under Section 148, and
  • Assessment order dated 09.05.2023.

The impugned notice was issued in the name of Mr. Kuldip Kohli, who had already expired on 22.12.2017. The petitioners established that they are the surviving legal heirs of the deceased assessee.

It was further demonstrated that the Revenue had prior knowledge of the death, as evident from earlier assessment proceedings (dated 30.12.2019) where petitioner no.1 participated as legal representative.

 Issues Involved

  1. Whether a notice under Section 148 can be validly issued in the name of a deceased assessee?
  2. Whether an assessment order passed against only one legal heir, ignoring others, is legally sustainable?
  3. Whether prior knowledge of death by the Revenue affects the validity of proceedings?

 Petitioner’s Arguments

  • The notice under Section 148 was void ab initio, as it was issued in the name of a deceased person.
  • The Revenue was aware of the death, as reflected in earlier proceedings where legal heirs participated.
  • The assessment order was flawed as it was directed only against one legal heir, despite existence of multiple heirs.
  • Proceedings conducted without proper substitution of legal representatives are legally unsustainable.

 Respondent’s Arguments

  • The Revenue chose to proceed on the basis of available records.
  • However, during hearing, the Revenue did not contest strongly and accepted procedural infirmity regarding issuance of order against only one legal heir.

Court’s Findings / Order

  • The Court observed that:
    • The notice was issued in the name of a deceased assessee.
    • The Revenue had prior knowledge of death, yet failed to take corrective steps.
    • The assessment order was incorrectly directed against only one legal heir, ignoring others.
  • Accordingly, the Court held:
    • The assessment order cannot be sustained in law.
    • The assessment order dated 09.05.2023 was set aside.
  • Directions issued:
    • The Assessing Officer shall issue fresh notice to all legal heirs.
    • Adequate opportunity of hearing must be provided.
    • A speaking order must be passed thereafter.

Important Clarification

  • Proceedings against a deceased person are null and void.
  • Even where legal heirs are involved, all legal representatives must be properly impleaded.
  • Prior knowledge of death by the department strengthens the case against validity of such proceedings.

 Sections Involved

  • Section 148 – Income Escaping Assessment
  • Section 142(1) – Inquiry before Assessment
  • General principles relating to legal representatives under Income Tax Law

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/60831052023CW79042023_162409.pdf

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