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Income tax related query

Swati Jain (CA IN PRACTICE) (94 Points)

17 June 2015

ex party assessment done on the deceased person n demand notice issued.

so is this assessment is valid ?

Can legal heir file an appeal against it ?

n also deceased did not have pan so how legal heir can proceed appeal ?

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4 Replies

CA Aman Gupta (Chartered Accountant) (344 Points)
Replied 17 June 2015

Procedure for assessment of deceased person has been given u/s 159(2). In your case I dont think AO has followed the same, hence cannot contrued as a valid assessment.

Madras HC in the case of CIT -vs.- Dhalumal Shyamumal (2005) 276 ITR 62 has held that where an assessee dies, pending any assessment proceedings it is duty of the AO to ensure the compliance of sec 159(2) before passing any orders.

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Swati Jain (CA IN PRACTICE) (94 Points)
Replied 17 June 2015

The case was that a property was sold in june n then asseessee died in july after that notice u/s 143(3) was issued in the name of the deceased. nobody gave response to that notice and then AO done Ex-party assessment u/s 144 n demand notice issued in the name of the deceased.

is this notice in the name of deceased valid ? n how to respond it?

Swati Jain (CA IN PRACTICE) (94 Points)
Replied 17 June 2015

According to CIT vs Dhalumal Shyamumal (2005) 276 ITR 62 notice against deceased person is null and void.

If we want to file an appeal against that order than how to file as we know that deceased person does not have PAN.

vishal (Chartered Accountant) (67 Points)
Replied 17 June 2015

Look swati if the order u/s 144 has been made before the assessee died then his legal heir is liable to pay demand including interest but not penalty but only upto the value of estate he acquired by inheritance. Further if, the assessee died before the order under section 144 was made by the A.O. then such order is null & void as per the aforesaid judgement for which you can file appeal to CIT (appeals) u/s 246.