Service of notice upon a dead person under section 142(1) would not authorise him to assume jurisdiction to pass assessment order on the Legal Representatives – ITAT Ahemdabad

Section 142(1) , Section 144 and Section 159 of the Income Tax Act, 1961

Taxcharcha March 16, 2020

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Late Shri D.K. Jain vs ACIT — Where the assesse has made the FDR out of borrowed funds, the interest on such FDRs cannot be added back by invoking the provisions of section 57(iii) of the Income Tax Act, 1961

It is found that before service of notice under section 142(1), assessee had already expired. His legal heirs did not file return for this assessment year. Therefore, the right course for the AO is to find out L/Rs, and more particularly, L/R who has inherited assets and liabilities of Deceased Assesee because Legal Representative is liable to pay taxes of the deceased only equivalent to the property inherited from the deceased.

Therefore, procedure followed by the AO in the present case is patently illegal.