How to file the income tax return of a deceased assessee?
If an assessee dies intestate, that is without making a will, his return of income tax can still be filed by his legal heirs and successors and such heirs can pay taxes in their representative capacity.
If there is more than one legal heir left behind by the deceased assessee, an agreement may determine who will represent the said assessee before the tax authority for filing of return.
Section 159 of the Income Tax Act deals with the procedure to be followed for assessment of the tax to be paid by a legal representative of an assessee.
Who is a “Legal representative” for the purpose of section 159?
“Legal representative” includes its plural form in section 159 of the Act. An executor of a will after obtaining the probate is also a legal representative as it was held in the case of the Estate of Lt. Rangalal Jajodia v. CIT (1971) 79 ITR 505 (SC). He shall be liable to pay the taxes to the extent of property the received by him as per the said will left by the deceased assessee.
According to the provisions of section 159 of the Act, a legal representative of the deceased shall be considered to be an assessee.
Extent of liability of a legal representative:
If a person dies after making a will appointing more than one executor, or expires without making a will leaving behind him more than one heir, the department shall assess the total income of the deceased against all the executors or the legal heirs.
However such a liability is restricted to the previous year in which the person died, it does not extend to a period beyond the previous year in which that person expired.
If the legal representative converts the asset inherited by him into another form, the department has the right to proceed against the converted asset in the same manner as it could have had done against the original asset of the deceased.
The personal properties of a legal representative are not liable for recovery of the tax due by the deceased as per section 159, except where it is found that he has received the assets of the deceased but he has not properly accounted for them. This was held by the Madras high Court in the case of UOI v. Mrs. Sarojini Rajah  97 ITR 37 (Mad.).
Where a refund is payable to an assessee who is a legal representative of a deceased assesee from any appellate order arising out of his personal assessment, it cannot be adjusted against the outstanding dues of the deceased as per section 159(4) of the Act.
Notice to legal representative:
Where a notice has been served upon an assessee prior to his death, fresh notice to his legal representative is not required and proceedings can be validly initiated based on the said notice on the assessee as was held by the Karnataka High Court in K. Ashok Kumar v. CIT (1986) 162 ITR 543 (Kar.).
However an order will not be null and void merely due to lack of notice, if the assessee has expired after conclusion of a hearing and making of the assessment against him.
A failure to serve notice on all the legal representatives does not amount to a nullity but is only an irregularity if one of them has filed a return and has complied with notices under sections 142(1) and 143(2) of the Act.
An assessment proceeding cannot be treated as void only due to the fact that all the legal representatives were not present before the assessing authority as no notices were issued to them.
Process of filing return for a deceased assessee:
For filing of a return on behalf of the assessee who has expired, his legal heir or representative should obtain prior approval from the department. Some documents including heir-ship certificate, PAN of the deceased person, death certificate, etc. should be submitted before the department.
Online-filing of Tax Return for a deceased assessee:
Online filing of the tax return for a deceased is permissible. A legal representative can get his digital signature certificate which should be registered with the e-filing site of the department.
Then the legal representative should furnish the details of the deceased like his name, PAN, date of birth, etc. to the e-filing website of department. The scanned copy of the death certificate should also be provided with other details.
Upon receipt of the details, the authorities check the PAN of the legal representative after comparing it with that of the deceased person. Thereafter, the legal representative of the deceased assessee can e-file the return of the deceased by using his digital signature certificate.
Offline filing of Tax Returns for a deceased assessee:
For offline filing of tax returns, the legal representative of a deceased assessee needs to visit to the A.O. and furnish the required details like the PAN, relationship proof with the deceased, death certificate of the deceased person, etc.
After verifying the documents the AO will give the approval for filing the return for the deceased assessee to the legal representative. Thereafter the legal representative can file the tax returns on his own through offline method.
Refund due to the deceased assessee:
If there is any refund due to the deceased taxpayer, it will go the bank account of the said deceased. As per Section 159, the legal heir shall be liable to pay any amount which the deceased would have been liable to pay but not more than the amount inherited by him from the deceased assessee.