Quashing Notice Issued to Deceased Assessee Cannot Justify Fresh Notice to Legal Heirs: Allahabad HC

Court : Allahabad High Court

Brief :

The Allahabad High Court considered whether an order quashing a reassessment notice issued in the name of a deceased assessee could be treated as a “finding” or “direction” under Section 150(1) of the Income-tax Act, 1961, thereby allowing the Income Tax Department to issue a fresh notice to the deceased person’s legal representative after the limitation period prescribed under Section 149 had expired.

The dispute arose from information obtained during a search conducted in the Omaxe Group, which allegedly indicated that the deceased assessee had undertaken an unaccounted cash transaction. The assessee died on 7 January 2024. However, the Department issued a reassessment notice under Section 148 in his name on 28 March 2025 for Assessment Year 2021–22.

The proceedings subsequently resulted in a reassessment order and demand dated 24 March 2026 against his widow, Smt. Asha Dubey, in her capacity as legal representative.

The petitioner argued that the notice issued to a deceased person was void from inception. She further submitted that Section 150(1) could not be invoked to issue a fresh notice after the limitation period under Section 149 had expired. The Department contended that Section 150(1) overrides the limitation prescribed under Section 149 and permits fresh proceedings against the legal representative.

Citation :

Smt. Asha Dubey v. Union of India Through Secretary, Ministry of Finance, Department of Revenue & Others
Writ Tax No. 571 of 2026
Citation: 2026 LLBiz HC (ALL) 54
Date of Decision: 23 July 2026
Bench: Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary

Judgement :

The Allahabad High Court held that a reassessment notice issued in the name of a deceased person is void ab initio and cannot give rise to valid proceedings. Consequently, an order quashing such a notice merely records the legal effect of an invalid action and does not constitute a “finding” or “direction” within the meaning of Section 150(1) of the Income-tax Act.

The Court clarified that Section 150(1) cannot be used to revive reassessment proceedings that have already become barred by limitation. Where the time prescribed under Section 149 for issuing a notice under Section 148 has expired, the Department cannot extend or bypass that limitation on equitable grounds or by relying upon Section 150(1).

It further held that the appropriate course under Section 159(2)(b) was to initiate fresh reassessment proceedings directly against the legal representatives within the prescribed limitation period. Since the Department failed to do so, the reassessment proceedings stood legally foreclosed.

Accordingly, the High Court quashed the notice dated 28 March 2025 along with all consequential reassessment proceedings, assessment orders and demands issued against Smt. Asha Dubey, and allowed the writ petition. CA Sansaar