Income Tax Reassessment Notice Issued to a Dead Person: ITAT Nagpur Restores Case to CIT(A)

 

What happens when the Income Tax Department reopens the assessment of a person who had already died nearly five years earlier? Can a reassessment proceeding survive if the notice under section 148 is issued in the name of the deceased? And what if the legal heir is brought on record only later?

A recent case argued by me before Hon’ble ITAT, Nagpur Bench, provides an interesting answer-not by finally deciding the validity of the reassessment, but by restoring the matter to the CIT(A) for deciding the crucial jurisdictional issue.
The case is Mohammad Shafique Mohammad Ismail Malnas through legal heir Mhd. Jubair Mhd. Shafique Malnas vs. ITO, Ward-1, Yavatmal, ITA No. 294/NAG/2026, for Assessment Year 2020-21. The appeal was heard on 31 July 2026 and the order was pronounced on 6 August 2026.

The story begins with an assessment of a person who was no longer alive

The facts of the case are quite striking.
The assessee had expired on 14 December 2019. However, the Income Tax Department initiated reassessment proceedings almost five years later. The notice under section 148 was issued in March 2024 in the name of the deceased assessee. The subsequent assessment order dated 2 January 2025 was also passed in the name of the deceased person.
In other words, the chronology was broadly:

•  14.12.2019 – Assessee died.

•  March 2024 – Reassessment proceedings initiated in the name of the deceased.

•  30.03.2024 – Notice under section 148 issued.

•  02.01.2025 – Assessment order passed in the name of the deceased.

•  11.02.2026 – CIT(A) passed order.

•  31.07.2026 – ITAT heard the appeal.

•  06.08.2026 – ITAT pronounced its order.
The Paper Book placed before the Tribunal also contained the death certificate, notice under section 148, order under section 148A(d), communication regarding the death of the assessee and the legal heir certificates issued by the court.

But there was more to the case than the deceased assessee’s name

The reassessment had not been initiated without any information. The Department had data from various sources.
The assessment records referred to GST turnover of approximately ₹2.38 crore, cash deposits of ₹2.01 crore in the Yavatmal Urban Co-operative Bank and TDS information showing payment of ₹2.06 lakh by Hindustan Unilever Limited under section 194C.
The Department treated the matter as a non-filer case and, based on the information available through the Insight portal and other sources, initiated reassessment proceedings.
During the assessment proceedings, notices were issued and the assessment was ultimately completed ex parte under section 144 read with section 147.
The Assessing Officer estimated business income at 8% of the gross sales of ₹2,38,31,908, resulting in an addition of ₹19,06,552. A further ₹2,06,457 was added as undisclosed contract income received from Hindustan Unilever Limited. Thus, the total assessed income came to ₹21,13,009.
A demand of approximately ₹9.80 lakh was also raised in the name of the deceased assessee.

The most important question was not about the ₹21 lakh addition

The legal heir’s case was that the Department had made a fundamental jurisdictional mistake even before reaching the question of income.
The assessee was already dead when the reassessment proceedings were initiated. Therefore, according to the appellant, the notice under section 148 issued in the name of the deceased was itself invalid.
The argument was not merely that there was a technical defect in the notice. The contention was that the very assumption of jurisdiction under section 147 was defective.
The Paper Book specifically argued that the legal heir had never been brought on record before or during the reassessment proceedings and that the mandatory scheme of section 159 had not been followed.
This distinction is crucial.
A mistake in a notice may sometimes be capable of being corrected. But if the very person against whom jurisdiction is sought to be exercised is no longer alive, the question becomes: Can jurisdiction be assumed against a person who does not legally exist?

The Department was allegedly informed about the death

The case became even more interesting because, according to the Paper Book, the issue was not merely that the Department failed to discover the death.
The legal heir had communicated the fact of death to the Department during the reassessment proceedings and had supplied the death certificate through WhatsApp when requested by the Department. Despite this, the proceedings continued in the name of the deceased and the assessment order was eventually passed in the deceased person’s name.
The Paper Book also records an important sequence relating to registration of the legal heir. The legal heir approached the court for an English version of the legal heir certificate, obtained it on 3 January 2025, and surprisingly found that the assessment order had already been passed on 2 January 2025.
This sequence makes the case particularly relevant for professionals handling cases of deceased taxpayers.

What does section 159 have to do with it?

Section 159 is the statutory bridge between the deceased assessee and the legal representative.
The appellant’s contention was that after the death of an assessee, proceedings have to be continued in accordance with the statutory framework applicable to the legal representative. In the present case, however, the legal heir was never substituted before the reassessment proceedings were initiated or completed.
The Paper Book therefore contended that the reassessment was void ab initio and that the additions made in such proceedings could not survive independently.

Can section 292B or 292BB save such a notice?

This was another important issue raised before the Tribunal.
The appellant relied upon the Bombay High Court decision in Sumit Balkrishna Gupta v. ACIT, where the Court held that issuance of notice under section 148 in the name of the correct person is a foundational requirement for assuming jurisdiction. According to the proposition relied upon in the Paper Book, issuing the notice to a dead person is not merely a procedural defect and cannot be protected by sections 292B or 292BB.
The Paper Book also relied upon the jurisdictional Bombay High Court’s decision in Shri Devendra S/o Vasudeo Jambhulkar v. Addl. CIT, where proceedings initiated in the name of a deceased assessee were held to be null and void. The Court held that the notice and consequential proceedings in the name of the deceased were liable to be quashed.
Another interesting authority placed before the Tribunal was Savita Kapila, Legal Heir of Late Shri Mohinder Paul Kapila v. ACIT, relied upon for the proposition that legal heirs are not under a statutory obligation to intimate the death of the assessee to the Income Tax Department.
Thus, the appellant’s argument was that even if the Department initially did not know about the death, that would not automatically validate proceedings initiated against a deceased person.

There was also a merits issue hiding behind the jurisdictional issue

The case was not limited to the deceased-person controversy.
The assessment itself contained substantial additions based on third-party information. The Department had identified cash deposits of ₹2.01 crore and GST turnover of ₹2.38 crore. The Assessing Officer compared the business turnover of earlier years and estimated income at 8% of the turnover.
There was also an addition of ₹2.06 lakh based on contract receipts from Hindustan Unilever Limited, for which confirmation was obtained under section 133(6).
The Paper Book, however, consciously placed the jurisdictional challenge at the forefront. The strategy was simple: if the foundation itself is invalid, there may be no need to fight over the additions standing on that foundation.
That is an important litigation lesson. In tax appeals, the first question should sometimes be: Was the assessment validly assumed at all? before asking whether the addition is correct.

Then came an unexpected procedural hurdle at the ITAT

The ITAT order is only four pages long, but the procedural point contained in it is extremely important.
The assessee raised several grounds challenging the validity of the reassessment, including the fact that the section 148 notice was issued in the name of a person who had died on 14 December 2019.
However, the CIT(A) had not adjudicated this legal issue.
The Tribunal noted this specifically. It then referred to the Delhi High Court decision in Divine Infracon Private Limited v. PCIT, relied upon for the proposition that the Tribunal cannot decide a ground which did not arise from the order of the first appellate authority.
Therefore, despite the detailed arguments and judicial precedents placed before the Tribunal, the ITAT did not itself pronounce upon the ultimate validity of the reassessment.
Instead, it restored the issues, including the legal grounds, to the file of the CIT(A) for necessary adjudication in accordance with law and with proper opportunity of hearing.

So, was the appeal allowed?

Yes—but with an important qualification.
The ITAT recorded that the effective grounds were allowed for statistical purposes, and the appeal was accordingly allowed for statistical purposes.
This does not mean that the ITAT finally held that the reassessment was void.
It means that the assessee succeeded in getting the matter restored to the CIT(A), who now has to adjudicate the legal issues that had not been decided earlier.
This is an important distinction that should not be lost while reporting the case.

Why is this order important for tax professionals?

The case offers at least five practical lessons.
First – Always check whether the assessee was alive when reassessment proceedings were initiated.
In cases involving old assessments, inherited properties, dormant PANs, non-filers and deceased taxpayers, this basic factual verification can become a jurisdictional issue.
Second – Do not treat a notice issued in the name of a deceased person as merely a spelling or clerical error.
The authorities cited in the Paper Book treat the identity of the person to whom the jurisdictional notice is addressed as fundamental to the validity of reassessment.
Third – Section 159 should be examined carefully.
Where the taxpayer has died, professionals should examine whether the legal representative has been properly brought into the proceedings and whether the proceedings are being continued in the legally appropriate manner.
Fourth – Sections 292B and 292BB should not be assumed to cure every defect.
The authorities relied upon by the assessee distinguish between a curable procedural defect and a foundational jurisdictional defect.
Fifth – Grounds raised before the CIT(A) must actually be adjudicated.
This may be the most important lesson from the present ITAT order. A taxpayer may have a strong jurisdictional ground, but if the first appellate authority does not adjudicate it, the Tribunal may not necessarily decide it for the first time. The present case was restored precisely because the CIT(A) had not decided the legal issue.

A lesson for legal heirs: Don’t ignore an Income Tax notice after death

There is also a practical lesson for families.
The death of a taxpayer does not necessarily end the tax department’s ability to examine the deceased’s tax affairs. But the legal heirs should not simply ignore notices received in the name of the deceased.
The appropriate response is to immediately place the death certificate and legal-heir documentation on record and seek proper substitution of the legal representative. At the same time, the validity of any notice already issued in the name of the deceased should be examined.
In the present case, the legal heir ultimately placed the death certificate and legal-heir documents on record before the appellate authorities.

The larger message: Data may trigger reassessment, but jurisdiction still matters

The case also illustrates a broader change in tax administration.
The Department today has access to GST data, bank information, TDS statements and Insight portal information. In this case, the reassessment was triggered by information relating to GST turnover, bank deposits and TDS transactions.
But data-driven tax administration does not eliminate the need to follow the statutory jurisdictional framework.
The Department may have information. It may even have strong information. But the question still remains: Against whom can the statutory proceedings legally be initiated?
That is where this case becomes relevant beyond its individual facts.

One case, two different lessons

The immediate litigation outcome is procedural: the ITAT has sent the matter back to the CIT(A).
But the larger legal issue remains very much alive before the first appellate authority: whether reassessment proceedings initiated in the name of a person who had died nearly five years earlier, without bringing the legal heir on record, can survive in law.
The Paper Book placed substantial judicial material before the Tribunal, including decisions of the jurisdictional Bombay High Court, other High Courts, the Supreme Court and the Nagpur ITAT on proceedings involving deceased assessees.
For taxpayers, the message is simple: Never assume that an Income Tax notice is valid merely because it has been generated electronically.
For legal heirs, the message is: document the death and your legal status immediately.
And for tax professionals, perhaps the most important message is: before fighting the addition, check the foundation of the assessment.
Sometimes the biggest tax dispute is not about how much income was assessed-but about whether the assessment could legally have been made at all.
Case: Mohammad Shafique Mohammad Ismail Malnas through Legal Heir Mhd. Jubair Mhd. Shafique Malnas v. ITO, Ward-1, Yavatmal, ITA No. 294/NAG/2026, AY 2020-21, ITAT Nagpur, order dated 06.08.2026. The appeal was allowed for statistical purposes and the legal issues were restored to the CIT(A) for adjudication.

x Professional’s Corner

Notice to a Deceased Assessee – How Sections 148, 148A, 159, 292B & 292BB Interact

The issue of reassessment of a deceased taxpayer requires these provisions to be read together. The important point is that section 159 does not automatically validate a notice issued to a dead person. The precise stage at which the assessee died, the manner in which the proceedings were initiated, whether the legal representative was brought on record and whether there was participation without objection can all become relevant.

Section	What does it broadly deal with?	Relevance where assessee has died
Section 148	Notice for reassessment after the Assessing Officer has complied with the statutory requirements for reopening	The foundational notice must be issued to the legally correct person. Courts have repeatedly held that a notice issued in the name of a dead person can go to the root of jurisdiction.
Section 148A	Procedure preceding issuance of notice under section 148, including the prescribed inquiry/opportunity and order	If the assessee was already dead, the question arises whether the statutory process under section 148A was validly undertaken against the correct person/legal representative. In the present case, the section 148A proceedings were also in the name of the deceased.
Section 159	Provides the statutory framework for proceedings and liabilities relating to a deceased assessee and the legal representative	The legal representative steps into the statutory framework applicable to the deceased. However, courts have distinguished between proceedings that were already pending against an assessee during his lifetime and proceedings initiated for the first time after his death.
Section 292B	Protects certain notices, assessments and other proceedings from being treated as invalid merely because of a mistake, defect or omission if they are otherwise in substance and effect in conformity with the Act	A jurisdictional/foundational defect is different from a mere clerical mistake. Several courts have held that section 292B cannot be used to cure the fundamental defect of issuing a reassessment notice in the name of a dead person.
Section 292BB	Deems a notice to have been duly served where an assessee has participated in the proceedings without raising the objection regarding non-service, subject to its statutory limitations	It is important to examine who participated, in what capacity and whether the objection was raised in time. Mere participation by a legal heir does not necessarily mean that an otherwise invalid proceeding against a deceased person stands automatically cured.

The critical distinction: “curable defect” versus “jurisdictional defect”

This distinction is at the heart of litigation involving notices issued to deceased taxpayers.

If the Department makes a minor mistake in the name or description of a person, section 292B may, depending upon the facts, protect the proceeding. But the courts have drawn a line where the defect is foundational.

The Bombay High Court in Sumit Balkrishna Gupta v. ACIT held that the notice under section 148 is the foundation for reopening an assessment and that issuing the notice in the name of the correct person is a condition precedent for assuming jurisdiction. The Court held that a notice issued to a dead person was not protected by sections 292B or 292BB.

The Delhi High Court in Savita Kapila, Legal Heir of Late Mohinder Paul Kapila v. ACIT similarly held that a notice under section 148 issued after the death of the assessee could not be served upon the deceased and, therefore, the jurisdictional requirement of section 148 was not fulfilled. The Court also held that, in the circumstances of that case, section 159 did not apply because the reassessment proceedings had not been initiated while the assessee was alive.

What happens when the Department already knows about the death?

This can make the Department’s position even more difficult.

Once the fact of death is brought to the Department’s knowledge, continuing the proceedings in the name of the deceased instead of taking the legally appropriate course in relation to the legal representative can create a serious jurisdictional challenge.

In the present case, the Paper Book specifically placed on record that the legal heir had communicated the death to the Department and had supplied the death certificate. Despite this, the proceedings continued in the name of the deceased and the assessment order was ultimately passed in his name.

What if the legal heir participates in the proceedings?

This is where section 292BB becomes particularly relevant.

A professional should not stop at the fact that the legal heir appeared before the Department. The exact nature of participation needs to be examined.

Was the legal heir merely informing the Department about the death?

Was a return filed?

Was there participation in assessment proceedings?

Was any objection to jurisdiction raised?

Was the person participating as legal representative or merely responding to a communication?

These factual distinctions can materially affect the legal position.

The Delhi High Court in Savita Kapila considered the Revenue’s reliance on section 292BB and noted that merely uploading the death certificate did not amount to the legal heir submitting to the jurisdiction of the Assessing Officer.

Thus, “legal heir participated” and “legal heir accepted jurisdiction” are not necessarily synonymous expressions.

Compact Case-Law Table

Case	Court / Forum	Key principle relevant to deceased assessee
Sumit Balkrishna Gupta v. ACIT	Bombay High Court	Notice under section 148 issued to a dead person is a foundational jurisdictional defect; section 292B/292BB cannot ordinarily cure such defect.
Savita Kapila, Legal Heir of Late Mohinder Paul Kapila v. ACIT	Delhi High Court	Notice under section 148 issued after death cannot be served upon the deceased; legal heirs are not under a statutory obligation merely to intimate the Department about death.
Alamelu Veerappan v. ITO	Madras High Court	Section 159 was held inapplicable where proceedings were initiated only after the assessee’s death; notice to a dead person was held unenforceable.
Devendra S/o Vasudeo Jambhulkar v. Addl. CIT	Bombay High Court, Nagpur Bench	Notice and consequential proceedings issued in the name of the deceased assessee were held null and void. The Paper Book specifically relied upon this jurisdictional precedent.
Pr. CIT v. Maruti Suzuki India Ltd.	Supreme Court	A substantive jurisdictional defect cannot necessarily be treated as a mere procedural error capable of being cured under section 292B; relied upon in the Paper Book in support of the jurisdictional argument.
Sarika Shankarrao Zilpe	ITAT Nagpur	In a 2026 decision, ITAT Nagpur held that proceedings initiated and completed in the name of a deceased person were void ab initio; section 159 required proceedings, if otherwise permissible, to be taken against the legal representative.
Mohammad Shafique Mohammad Ismail Malnas v. ITO	ITAT Nagpur, 06.08.2026	The Tribunal did not finally decide the deceased-assessee jurisdiction issue because CIT(A) had not adjudicated it; the matter was restored to CIT(A) for deciding the legal grounds.

A practical checklist for tax professionals

Whenever a reassessment notice is received in respect of a deceased taxpayer, the following should be checked immediately:

1.  Date of death:Compare the date of death with the dates of section 148A and section 148 notices.

2.  Name appearing on notice:Is the notice issued in the name of the deceased or the legal representative?

3.  Section 148A proceedings:Was the opportunity under section 148A given to the correct person?

4.  Section 159:Examine whether the proceedings were already pending during the lifetime of the assessee or were initiated only after death.

5.  Department’s knowledge:Determine when and how the Department became aware of the death.

6.  Legal-heir registration:Check whether the legal representative was properly registered/substituted and at what stage.

7.  Section 292B:Examine whether the alleged defect is merely clerical or goes to the foundation of jurisdiction.

8.  Section 292BB:Carefully examine the nature and extent of participation by the legal heir and whether jurisdictional objection was raised.

9.  Appellate grounds:Ensure that the jurisdictional ground is specifically raised before the CIT(A) and, importantly, ensure that the CIT(A) actually adjudicates it.

10.  ITAT strategy:If the CIT(A) has not adjudicated a jurisdictional ground, the present ITAT order demonstrates that the Tribunal may restore the matter rather than decide the issue for the first time.

The takeaway

A notice addressed to a dead person is not necessarily a mere “technical error”. In appropriate facts, it can strike at the very foundation of reassessment jurisdiction. But every case must be examined on its own facts-particularly the date of death, the date and manner of initiation of proceedings, applicability of section 159, knowledge of the Department, participation of the legal representative and the objections raised during the proceedings.

The copy of the order is as under:

ITAT Order - Mohammad Shafique Mohammad Ismail - 294-NAG-2026