The Deceased does not give benefit nor does he receive benefit by what he hears

Question :

Does the deceased hear the greetings of peace and speech, and does he feel what is done in his presence?

Answer:

This is a question that the people of knowledge have differed over. The Sunnah has clarified some things regarding it. Indeed it has been authenticated from the Prophet that he said:
"When the man is buried in his grave and the people go away from him, he hears the striking of their sandals (against the ground)."

The Messenger informed that there was not any Muslim who passed by the grave of a Muslim and gave him the greetings of peace, and he knew him in this world, except that Allâh returns his soul to him and he returns the greetings of peace to him. This Hadith was graded authentic (Sahih) by Ibn 'Abdul-Barr and Ibn Al-Qayyim mentioned it in Kitabur-Ruh (The Book of the Soul) without making any comment about it. This is probably supported by the fact that whenever the Messenger would go out to the graveyards he would say:
"Peace be upon you, O abode of the believing people."

At any rate, even though we say that the deceased can hear, the deceased does not benefit others even if he hears them. This means that it is not possible for the deceased person to benefit you if you supplicate to Allâh at his grave, just as he cannot benefit you if you supplicate to him himself. Your supplicating to Allâh at his (the deceased's) grave, while believing this (that the deceased can benefit you) is a horrendous evil and an innovation from the innovations. Your supplicating the deceased himself is a major act of Shirk that expels one from the religion (of Islam).

Source:
Ash-Shaykh Ibn 'Uthaimin
Fatawa Islamiyah, Vol. 3 Pages 139-140