The Madurai Bench of the Madras High Court has dealt with the validity of a reassessment notice issued under Section 148 of the Income Tax Act, 1961 in the name of a deceased assessee, despite the Income Tax Department having previously been informed of the assessee’s death. The Court remitted the matter to the Assessing Officer for issuance of a fresh notice in the name of the legal representatives in accordance with Section 159 of the Act.
Background of the Dispute
The assessee, Kandhasamy Amaravathy, died on 24 December 2022. Subsequently, the Income Tax Department issued a notice under Section 133(6) in the deceased assessee’s name on 9 May 2025. The legal representative responded on 20 June 2025 and specifically informed the Department about the death of the assessee.
Despite this intimation, the impugned notice dated 30 March 2026 was issued in the name of the deceased assessee by invoking the machinery under Section 135A read with Section 148 of the Income Tax Act. The legal representative therefore approached the High Court challenging the notice.
Section 159 and Proceedings Against Legal Representatives
The High Court examined Section 159 of the Income Tax Act, which governs tax proceedings following the death of an assessee. The provision makes the legal representative liable, subject to statutory limitations, for sums which the deceased would have been liable to pay.
Section 159(2) also permits proceedings already taken against an assessee before death to be continued against the legal representative from the stage at which they stood on the date of death. Further, proceedings which could have been initiated against the deceased had the person survived may be taken against the legal representative. Under Section 159(3), the legal representative is deemed to be an assessee for the purposes of the Act.
Madras High Court’s Decision
Since the impugned notice had been issued in the name of the deceased assessee, the High Court remitted the matter to the first respondent with a direction to issue a fresh notice in the name of the legal representatives of the deceased assessee.
The Court further directed that the period between the date of the impugned notice/order and one month from the date of receipt of a copy of the High Court’s order would be excluded while computing limitation under Section 149 of the Income Tax Act.
After issuance of the fresh notice, the petitioner or the legal representative named therein was directed to participate in the proceedings in accordance with law. The writ petition was accordingly disposed of without costs.
Key Takeaway
The judgment reinforces the procedural requirement contained in Section 159 when tax proceedings concern a deceased assessee. Where the Department has knowledge of the assessee’s death and proceedings are subsequently initiated, the statutory mechanism concerning the legal representative must be followed. A reassessment proceeding cannot simply be initiated in the deceased person’s name; the appropriate legal representative must be brought into the proceedings in accordance with law.
