Income Tax Notice Issued After Taxpayer’s Death Invalid, Allahabad High Court Rules

An income tax reassessment notice issued to a person after their death is invalid from the outset and cannot later be corrected simply by replacing the deceased taxpayer with a legal heir, the Allahabad High Court has ruled.

The court observed this while quashing reassessment proceedings initiated against Sanjay Dubey more than a year after his death. The case was brought before the court by his wife, Asha Dubey.

Notice Issued More Than A Year After Death

Sanjay Dubey died on January 7, 2024. However, the income tax department (ITD) issued a reassessment notice in his name on March 28, 2025.

The proceedings were linked to a search carried out against the Omaxe group in April 2021. The tax department alleged that Dubey had made an unaccounted cash payment of Rs 27.44 lakh while buying a residential flat in Lucknow, according to a recent report on Bar and Bench.

The department later assessed additional income of Rs 69.06 lakh and raised a tax demand of Rs 39.67 lakh against Asha Dubey in her capacity as her husband’s legal representative.

She challenged the action, arguing that the reassessment itself had begun with a notice issued to a person who was no longer alive.

The department said it had not been informed of Dubey’s death when the notice was issued. It also pointed out that his wife had filed an income tax return (ITR) in his name after his death and verified it using his Aadhaar OTP.

The High Court said her action in filing and verifying the return in her deceased husband’s name could have separate legal consequences. However, that could not give the tax department jurisdiction where the original reassessment notice itself was invalid.

Fresh Notice Must Be Issued To Legal Representative

The Bench of Justices Shekhar B Saraf and Abdhesh Kumar Chaudhary held that a reassessment notice issued to a deceased person is void from the beginning.

The court explained that under Section 159 of the Income Tax Act, proceedings that were validly initiated while a taxpayer was alive may continue against the legal representative after the taxpayer’s death.

The position is different when the department wants to start proceedings only after the person has died. In such a case, the notice must be issued directly to the legal representative within the prescribed limitation period.

The court also held that issuing a notice to a deceased person is a jurisdictional defect, not a procedural mistake that can be cured under Section 292B. A legal heir’s participation in such proceedings also does not make an otherwise invalid notice valid.

While acknowledging that this gap in the law could potentially result in loss of tax revenue, the court said statutory requirements could not be bypassed on that ground. It directed that a copy of the judgment be sent to the Union Finance Ministry so the government could consider whether legislative changes were required.

FAQs

1. Is an income tax reassessment notice valid if issued after the taxpayer’s death?

No. The Allahabad High Court held that such a notice is void from the outset if it is issued in the name of a person who had already died.

2. Can the tax department continue proceedings against the legal heir?

Yes, if proceedings were validly initiated while the taxpayer was alive. For fresh proceedings after death, the notice must be issued directly to the legal representative within the prescribed time limit.

3. Can an invalid notice to a deceased taxpayer be corrected later?

No. The court said this is a jurisdictional defect and cannot be cured merely by substituting the legal heir or because the heir participated in the proceedings.