The Calcutta High Court held that the income tax department cannot issue notices against a deceased person’s PAN ( Permanent Account Number) merely because the legal heirs are unknown.
Justice Rajarshi Bharadwaj and Justice Uday Kumar, while dismissing an appeal filed by the income tax department, observed that:
“The Department’s insistence on using the PAN of the deceased for an order dated April 2024, when the death was recorded in April 2021, cannot be excused as a mere “technical reason”.”
The Court said that once the Department is aware of the assessee’s death, it cannot proceed against a non-existent person, and the inability to ascertain the legal heirs does not validate reassessment notices issued in the name or PAN of the deceased.
The department filed an appeal against the order of the Single Judge that had quashed an order passed under Section 148A(d) and the consequential notice issued under Section148 of the Income Tax Act, 1961 for Assessment Year 2020-21.
The fact is that the department received information through the Insight Portal regarding alleged bogus purchases made by Chiranji Lal Agarwala Based on the information, a notice under Section 148A(b) was issued on 28 March 2024.
However, the department found that the assessee had passed away on 28 April 2021, nearly three years before the reassessment proceedings were initiated when a death certificate was uploaded on the e-Proceedings portal.
According to the Revenue, no legal heir was registered on the portal even after the department asked to furnish the information once they learnt about the death of the deceased assessee. Thus, they issued notices in the name of “Legal Heir of Late Chiranji Lal Agarwala”, while using the PAN of the deceased for technical reasons.
The court refused to accept the submissions of the revenue. Apart from the death certificate uploaded during the proceedings, the Court found that an earlier Section 148 notice for AY 2018-19 issued against the same deceased assessee had already been quashed by the High Court in 2022 on the very same ground.
The bench held that the failure of a representative to register as a legal heir on the portal does not authorise the Department to continue proceedings in the name of a non-existent person.
Holding “The Learned Single Judge correctly identified that the Department had, in essence, proceeded against a deceased individual”, the bench said that PAN of the deceased cannot be used to generate notices when the statute clearly bars such proceedings.
The division bench found no defects in the order of the single bench and said that:
“The Department had full knowledge of the factum of death and had even seen previous notices quashed on the same grounds for a prior assessment year. To repeat the same procedural error for the Assessment Year 2020-21 is an exercise in futility and a disregard for established legal precedents regarding deceased assessees.”
Accordingly, the court declared the notices issued are not valid in law and dismissed the appeal of the revenue.
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INCOME TAX OFFICER, WARD NO. 34(1) vs NARENDRA KUMAR AGARWAL AND OTHERS
CITATION : 2026 TAXSCAN (HC) 1002Case Number : APOT/38/2026Date of Judgement : 7, May, 2026Coram : JARSHI BHARADWAJ And UDAY KUMARCounsel of Appellant : Mr. Amit Sharma, Adv. Mr. Abhishek Kumar AgrahariCounsel Of Respondent : Mr. Anil Kumar Dugar, Adv. Ms. Sangita Das
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