ITAT Mumbai Remands Reassessment in Case of Deceased Assessee for Proper Jurisdictional Adjudication

Background of the Dispute

The appeal before the Income Tax Appellate Tribunal, Mumbai Bench, arose in the case of Blossom Nandi Vs ITO (ITAT Mumbai). The appeal was filed by Ms. Blossom Nandi, representing herself as the legal heir of Late Shri Santanu Amalendu Nundy, challenging the order dated 10.02.2026 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi under Section 250 of the Income Tax Act 1961 for Assessment Year 2020-21.

The impugned appellate order stemmed from a reassessment framed under Section 147 read with Section 144 vide order dated 27.03.2025. The original return of income had been filed on 24.11.2020 declaring a total income of Rs.2,01,970/-.

Subsequently, based on information received from the Investigation Wing pursuant to a search conducted on 12.06.2023 in relation to entities of the Isprava Group and certain connected persons, the Assessing Officer issued a notice under Section 148 dated 20.03.2024 in the name of Shri Santanu Amalendu Nundy. At this time, Shri Nundy had already passed away on 07.01.2022.

Key Facts Relevant to the Reassessment

Issuance of Notice to a Deceased Person

  1. During the reassessment proceedings, the authorised representative informed the Assessing Officer that Shri Santanu Amalendu Nundy had expired on 07.01.2022, i.e., before the notice under Section 148 was issued.
  2. The death certificate was submitted to the Assessing Officer on 05.11.2024.
  3. Notwithstanding this intimation, the Assessing Officer continued the proceedings in the name of the “Legal Heir of Late Santanu Amalendu Nundy” and completed the reassessment accordingly.

Transaction in Immovable Property at Goa

The information from the Investigation Wing related to the sale of an immovable property located at Anjuman, Goa, which stood jointly in the names of the deceased assessee and Ms. Blossom Nandi.

  • The property was sold to M/s Casa Luxury Realty Seven LLP by a sale deed dated 24.12.2019.
  • The consideration recorded in the registered sale deed was Rs.84,73,500/-.
  • On the basis of WhatsApp conversations, a statement recorded under Section 131A and other seized material, the Assessing Officer alleged that an additional cash component of Rs.36,31,500/- had been paid over and above the documented sale consideration.

Stand of the Assessee Before the Assessing Officer

The authorised representative of the assessee advanced the following contentions before the Assessing Officer:

  • The entire investment for purchase of the Goa property was stated to have been made by Ms. Blossom Nandi alone.
  • The deceased assessee’s name was said to have been included in the ownership documents purely for convenience.
  • It was explained that the whole of the long-term capital gain arising from the transfer of the property had already been declared by Ms. Blossom Nandi in her own return of income.

The Assessing Officer, however, disregarded these submissions and treated the deceased assessee as a co-owner to the extent of 50% of the property.

Additions Made in the Reassessment Order

By the reassessment order dated 27.03.2025 passed under Section 147 read with Section 144, the Assessing Officer:

  • Computed long-term capital gains of Rs.33,18,820/- as the deceased assessee’s 50% share in the gains from the sale of the Goa property;
  • Made an addition of Rs.18,15,750/- under Section 69A read with Section 115BBE on a substantive basis towards alleged unexplained cash receipt;
  • Made a further addition of Rs.18,15,750/- on a protective basis on account of the same alleged cash component.

Total income was assessed at Rs.71,52,290/-.

Proceedings Before the CIT(A)

The assessee carried the matter in appeal to the CIT(A), National Faceless Appeal Centre.

Jurisdictional and Procedural Grounds Raised

The assessee raised detailed jurisdictional challenges, including:

  • The notice under Section 148 having been issued in the name of a deceased person, thereby allegedly rendering the entire reassessment void, relying upon:

    • Devendra vs. ACIT [2024] 461 ITR 463 (Bombay)
    • Mary Gene Gracious vs. ITO [2025] 170 taxmann.com 82 (Bombay)
    • Sumit Balkrishna Gupta vs. ACIT [2019] 414 ITR 292 (Bombay)

  • Alleged non-compliance with the statutory scheme under Section 148A, Section 151 and Section 151A, including non-supply of material and approval notes, and not following CBDT’s binding instructions dated 01.08.2022.

  • Failure of the Assessing Officer to deal with and dispose of the objections to reopening in terms of the law laid down in GKN Driveshafts (India) Ltd., v. ITO [2003] 259 ITR 19 (SC).

Findings of the CIT(A)

The CIT(A):