In a significant ruling on reassessment proceedings under the Income Tax Act, the Allahabad High Court's Lucknow Bench has held that a notice issued to a deceased person is legally invalid from the very beginning and cannot form the basis of any reassessment. The Court set aside the reassessment notice, assessment order, and tax demand issued against the legal heir of a deceased taxpayer, holding that the jurisdictional defect could not be cured under the law.
Background of the Case
The petition was filed by Smt. Asha Dubey, whose husband, Sanjay Dubey, died on January 7, 2024. Before his death, he had purchased a residential flat in Lucknow. During a search conducted on the Omaxe Group, the Income Tax Department allegedly found material suggesting an unaccounted cash transaction connected to the purchase.
Subsequently, on March 28, 2025, the Department issued a notice under Section 148 of the Income Tax Act for reassessment in the name of the deceased taxpayer. Further notices followed, and despite being informed of the taxpayer's death, the Department continued the proceedings by substituting the widow as the legal representative before ultimately passing an assessment order and raising a tax demand. The petitioner challenged the entire exercise before the High Court, arguing that proceedings initiated against a deceased person were without legal authority.
Court's Observations
The Division Bench of Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary examined whether a reassessment notice issued after the death of an assessee could be sustained by subsequently bringing the legal heir on record.
The Bench answered the issue in the negative, observing that the validity of reassessment proceedings depends upon a legally valid notice issued to the correct person.
The Court observed,
“A notice under Section 148... must be issued in the name of the correct person and not against the dead and such issuance of notice against a dead person is void ab initio.”
The judges clarified that Section 159 of the Income Tax Act permits proceedings against legal representatives only where proceedings had already been validly initiated during the lifetime of the assessee or where action is taken directly against the legal representative within the statutory framework. It does not validate proceedings that begin against someone who had already passed away.
The Court further rejected the Department's reliance on Section 292B, holding that a notice issued to a deceased person is not a mere procedural irregularity but a jurisdictional defect going to the root of the matter.
The Bench also held that participation by the legal heir or filing replies could not confer jurisdiction upon the assessing authority where none existed in law.
Department's Conduct
The High Court expressed concern over the manner in which the reassessment proceedings were pursued even after the Department had been informed of the taxpayer's death.
In a strongly worded observation, the Bench remarked that the Department had continued proceedings "oblivious to the foundational legal principle that a dead person is not a legal entity and cannot be subjected to reassessment proceedings."
The Court also stated,
“To tax the dead is a contradiction in terms.”
It explained that a deceased person cannot receive notices, submit replies, or participate in legal proceedings, making such proceedings fundamentally unsustainable.
Court's Decision
Allowing the writ petition, the Allahabad High Court quashed the notice issued under Section 148 dated March 28, 2025, along with all consequential proceedings, including the assessment order and tax demand.
The Bench also held that its judgment would not amount to a "finding" or "direction" permitting the Department to issue a fresh reassessment notice by invoking Section 150 of the Income Tax Act after the limitation period had expired.
While noting that the case exposed a legislative gap, the Court confined itself to interpreting the existing statutory provisions and directed that a copy of the judgment be sent to the Ministry of Finance for consideration of possible legislative changes.
Case Details
Case Title: Smt. Asha Dubey v. Union of India through Secretary, Ministry of Finance, Department of Revenue & 2 Others
Case Number: Writ Tax No. 571 of 2026
Judge: Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary
Decision Date: July 21, 2026
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