“Sheer Ignorance of Law”: Himachal Pradesh HC Slams AO for Income Tax Order against Deceased Proprietor [Read Order]

The division bench comprising Justice Tarlok Singh Chauhan and Justice Sushil Kukreja delivered the strong-worded judgment while hearing a writ petition filed by the legal heir of late Sanjeev Shyam, the sole proprietor of M/s V. Eagle Securities Services.

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The impugned order, dated February 4, 2025, was digitally signed and issued against Sanjeev Shyam, who had passed away even before the initial notice dated March 14, 2023, was sent. This fact was brought to the Assessing Officer’s attention through a formal reply filed by the deceased's legal heir, yet the officer went ahead with the proceedings and passed the final order.

In its oral judgment, the High Court noted that, “Despite the factum of death having been brought to the notice of the Assessing Authority, it still proceeded to pass the order, which reflects upon the sheer ignorance of law exhibited on the part of the Assessing Officer or upon his pre-determined mind to pass the order even against a dead person which, order to his very knowledge is a nullity in the eyes of law.”

The Court found the AO’s conduct legally unsustainable and fundamentally flawed. It stressed that the issuance of any notice or order against a dead person is a violation of natural justice and has no force under the law. Such action is void ab initio and reflects poorly on the functioning and legal awareness of tax authorities.

Consequently, the Court set aside the assessment order (Annexure P-6) in its entirety and left all questions of law and fact open for further adjudication. However, in a significant direction, the bench ordered that the ongoing proceedings related to the matter be assigned to an entirely different and independent officer, thereby removing the AO who had passed the invalid order from any further handling of the case.

Administrative convenience cannot override the rule of law and the rights of deceased individuals and their heirs.

The matter stands disposed of, including any pending applications, with this landmark judicial reprimand against arbitrary exercise of authority.