Income Tax Notice to Dead Person Is Invalid, Can't Be Fixed Later: Allahabad High Court

The Allahabad High Court has held that reassessment proceedings initiated under the Income Tax Act, 1961 against a deceased person are void from the outset, ruling that a notice issued under Section 148 to a dead assessee is a jurisdictional defect that cannot be cured by subsequently bringing the legal heir on record or by invoking equitable considerations.

Court also held that once the statutory limitation expires, the Income Tax Department cannot revive such proceedings by issuing a fresh notice under Section 150.

A division bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary quashed the entire reassessment proceedings initiated against a deceased taxpayer, holding that the defect goes to the very root of jurisdiction and cannot be cured merely because the legal heir later participated in the proceedings.

The dispute arose after the Income Tax Department reopened the assessment for Assessment Year 2021-22 following a search conducted on the Omaxe Group, during which it alleged that the deceased taxpayer had made an unaccounted cash payment of Rs 27.44 lakh while purchasing a flat in Lucknow.

Although the taxpayer had died in January 2024, the department issued a notice under Section 148 in March 2025 in his name, followed by further notices under Section 142(1). Even after the legal heir informed the authorities about the death and objected to the proceedings, the department rejected the objections, substituted the legal heir's name and completed the reassessment, raising a tax demand of nearly Rs 39.67 lakh.

Can the defect be cured under Sections 159 or 292B of the Income Tax Act?

Rejecting the department's stand, the bench held that reassessment proceedings derive their jurisdiction from a valid notice under Section 148. If the very first notice is issued against a dead person, the proceedings are legally non-existent.

Court clarified that Section 159 permits continuation of proceedings against legal representatives only where valid proceedings had already begun during the lifetime of the assessee or where proceedings are initiated directly against the legal representative within the limitation period. It cannot validate proceedings that were invalid from their inception.

Similarly, Section 292B, which protects proceedings from technical mistakes or omissions, cannot cure a foundational jurisdictional defect such as issuance of notice to a deceased person.

The bench also rejected the department's reliance on Section 292BB, observing that participation by a legal representative cannot confer jurisdiction where none exists.

Summarising the legal position, court held that a Section 148 notice must always be issued to the correct person; a notice to a dead person is void ab initio; the defect cannot be cured under Section 292B; and the legal heir's participation does not amount to waiver of a jurisdictional objection.

Can the department rely on equity or issue a fresh notice after limitation?

The Income Tax Department argued that since the legal heir had filed the deceased's income tax return after his death without informing the department, the court should protect public revenue by allowing fresh proceedings under Section 150 of the Act.

The high court, however, rejected the plea.

The bench observed that tax statutes must be interpreted strictly and "equity and tax are strangers to each other." Jurisdiction, it said, cannot be created through equitable considerations, participation, acquiescence or conduct of parties.

Court further held that quashing an invalid notice does not amount to a "finding" or "direction" under Section 150(1). Consequently, once the statutory limitation under Section 149 has expired, the department cannot use the court's order as a basis to issue a fresh notice to the legal representative.

Before concluding, the bench strongly criticised the department's conduct, observing that despite being armed with the machinery of the State and being repeatedly informed about the taxpayer's death, it proceeded to initiate, pursue and complete reassessment proceedings "apparently oblivious to the foundational legal principle that a dead person is not a legal entity and cannot be subjected to reassessment proceedings.

Case Title: Smt. Asha Dubey vs. Union of India and 2 others

Judgment Date: July 21, 2026

Bench: Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary