Vasdev Gupta vs. Pr. CIT, Rohtak [ITA No. 588/Del/2022, AY 2017–18]
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi Bench “C” in the case of Vasdev Gupta vs. Pr. CIT, Rohtak [ITA No. 588/Del/2022, AY 2017–18] held that an order passed under Section 263 of the Income Tax Act, 1961, against a deceased person is null and void ab initio. This reaffirms the position that any proceedings initiated or continued against a dead assessee without due substitution of legal heirs is a fundamental jurisdictional defect.
Background of the Case
The case centered around Vasdev Gupta, who passed away on 28.03.2020, as evidenced by a municipal death certificate submitted by the legal representatives. However, the Principal Commissioner of Income Tax (Pr. CIT), Rohtak, issued a notice under Section 263 on 09.02.2022 and passed the revisionary order on 04.03.2022, well after the assessee’s demise.
The legal counsel for the deceased assessee argued that since the order was passed posthumously—without notice to or substitution of legal heirs—the entire proceeding was without jurisdiction and liable to be quashed.
Key Legal Arguments and Judicial Precedents
The assessee’s counsel relied on key judgments to support the claim that proceedings against a dead person are void:
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Savita Kapila vs. ACIT – Delhi HC held that issuance of notice on a deceased person is a nullity.
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Dharamraj vs. ITO – Similar principles upheld.
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Mrs. Sripathi Subbaraya Manohara vs. PCIT – Invalidated both assessment and penalty orders passed posthumously.
Additionally, it was emphasized that:
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There is no statutory obligation on legal heirs to inform the income tax department of the death of an assessee.
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Section 159 of the Income Tax Act allows for continuation of proceedings only if they were already initiated before the death.
ITAT’s Ruling
The Tribunal unequivocally ruled in favour of the assessee, stating:
“Since in the case on hand an order u/s 263 was passed on 04.03.2022 by the Pr. CIT on the assessee who deceased on 28.03.2020, such an order is null and void and the same is hereby quashed.”
The ITAT held that once the proceeding is void ab initio, there is no need to delve into the merits of the other grounds raised by the assessee.
Takeaway
This ruling reinforces a vital procedural safeguard: any proceedings under the Income Tax Act cannot be validly initiated or continued against a deceased person unless the legal heirs are duly brought on record. Revenue authorities must exercise diligence to verify the existence and legal status of an assessee before initiating statutory actions.
Relevant Statutes & Cases
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Section 263, Income Tax Act, 1961
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Section 159, Income Tax Act, 1961 (Legal Representatives)
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Savita Kapila vs. ACIT – Delhi HC
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Dharamraj vs. ITO – Delhi HC
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Mrs. Sripathi Subbaraya Manohara vs. PCIT – Delhi HC