Notice u/s 143(2) issued to deceased assessee without notice to legal representatives u/s 159(2)(b) renders assessment void ab initio; defect not curable u/s 292B/292BB when AO aware of death.

ORDER

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 4.9.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1080362875(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2018-19.

2. The assessee has raised the following grounds of appeal:

3. The assessee has raised the following additional grounds of appeal:-

3.1 We have heard both the parties on admission of additional grounds. The Lucknow bench of the Hon’ble Allahabad High Court in the case of CIT Vs. Sahara India (2012) 347 ITR 331 held that a legal issue can be raised at any stage but there shall be good reason for admitting the additional ground.In our Opinion all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above grounds. Further we are also of the opinion that the additional grounds raised in the present case are purely legal in nature & therefore these are critical for a fair adjudication of the matter. The Hon’ble Madras High Court in the case of CIT Vs Indian Bank (2015) 230 Taxman 635 (Madras) held that Rule 11 of the I.T. Rules makes it clear that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal.

3.2 Further, the Hon’ble Karnataka High Court in the case of Gundathur Thimmappa & Sons vs. CIT, Mysore, reported in (1968) 70 ITR 70 held that when the point raised by the assessee is a point which went to the root of the matter and affected not merely his liability to pay tax but also jurisdiction of the Tribunals and Authorities themselves to subject the amount concerned to tax, the Appellate Tribunal had the discretion to permit point of law to be raised for the first time in appeal because the question went to the root of the case. The Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 held that undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings, we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Accordingly, we are inclined to admit the additional legal grounds for the purpose of adjudication as there was no investigation of any fresh facts otherwise on record and these are critical for a fair adjudication of the matter.

4. Now, first we proceed to adjudicate one of the legal grounds raised by the assessee challenging the validity of the assessment Order passed in the name of the dead person. The brief facts of the case are that the assessee e-filed his return of income for the assessment year 2018-19 on 31.07.2018 declaring total income of Rs. 25,31,420/-. The case of the assessee was selected for Limited scrutiny on the issue of “Agriculture Income”. Accordingly, notice under section 143(2) of the Act was served on 28/09/2019 and the notices 142(1) of the Act were issued & served on 30/12/2019, 12/02/2020 & 13/03/2021. In response, the spouse and legal heir of the deceased assessee had made online submission and furnished the details along with supporting documents. After considering the reply and evidence submitted, it was noticed by the AO that the assessee could file only five bills totaling to Rs.8,08,840/- only out of total agriculture income shown at Rs. 75,00,000/-. The assessee in it