INCOME-TAX OFFICER, WARD - 8(1), PUNE V. DEEPAK JAYBHAGWAN AGARWAK,L/H OF SHRI JAYBHAGWAN SADHURAM AGARWAL, PUNE

MA 188/PUN/2023

AI Insights

The case revolves around a penalty imposed on the legal heir of a deceased assessee, Shri Jaybhagwan Sadhuram Agarwal, following a survey that uncovered unaccounted income. The legal heir opted for the DTVSV scheme, which led to a settlement of the tax arrears. However, the Revenue filed a Miscellaneous Application to recall the ITAT's order that had deleted the penalty, arguing that the appeal under the DTVSV was not properly considered. The ITAT dismissed the Revenue's application, noting the lack of evidence provided to substantiate their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472326 (ITAT-PUNE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Other Referred Cases: CIT vs. Smt. S. Gowri (2019) 417 ITR 45 (Mad)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJKUMAR TRIPATHI
• Keywords: Condonation of delay; Revised return; Income from undisclosed sources
• Section: 147; 148; 142(1); 271(1)(c); 274; 133A; 5(2)

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE MS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER Miscellaneous Application No.188/PUN/2023 (arising out of ITA No.1037/PUN/2018) िनधाᭅरणवषᭅ / Assessment Year: 2013-14 The Income Tax Officer, Ward-8(1), Pune. Vs Shri Deepak Jaybhagwan Agarwal(L/h of Jaybhagwan Sadhuram Agarwal), 212, Agarwal Niwas, Gawali Nagar, Bhosari, Pune – 411026. PAN: AANPA4880H Appellant/ Revenue Respondent / Assessee Assessee by None Revenue by Shri Manojkumar Tripathi – DR Date of hearing 29/11/2024 Date of pronouncement 06/02/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This Miscellaneous application filed by the Revenue against the Tribunal order in ITA No.1037/PUN/2018 for A.Y.2013-14, dated 27.07.2022. MA No.188/PUN/2023 [R] 2 2. The Revenue has stated in the Miscellaneous Application as under : ““Kindly refer to order in ITA No.1037/PUN/2018 dated 27/07/2022 for A.Y. 2013-14 of the Hon'ble ITAT, \"B\" Bench, Pune in the above referred case. 2 The assessee filed his original return of income for AY 2013-14 on 05/08/2013 declaring total income of Rs.6,22,808/. In this case a survey action u/s 133A was carried out on 12/09/2013. During the course of survey proceedings the assessee offered Rs. 1 crore as his unaccounted income for AY 2013-14. The case was selected for scrutiny u/s 147 of the Act and notice u/s 148 was issued to the assessee on 09.05.2014. In response to notice u/s 148, the assessee filed revised return of income on 09.09.2014 & declared total income of Rs. 1,22,40,618/-. However, in the meantime the assessee expired on 05.02.2015. Therefore, further notice u/s 143(2) and 142(1) of the IT Act were issued to the legal heir Shri. Deepak Jaybhawan Agrawal. The assessment order was passed u/s 143(3) r.w.s. 147 of the Act on 07.03.2016 in the name of Shri. Deepak Jaybhagwan Agrawal L/H of Late assessee Jaibhagwan Sadhuram Agrawal and total income assessed at Rs.1,23,96,114/- resulting in demand of Rs.1,65,180/-. Accordingly demand notice u/s 156 dated 07/03/2016 was issued to the legal heir of the deceased assessee. The penalty proceedings u/s 271(1)(c) of the Act were also initiated upon the legal heir by the AO for concealment of income on account of addition made under the head LTCG of Rs.1,20,07,768/- as the same was not shown in original return of income filed on 05.08.2013 and it was declared only after survey action u/s 133A conducted by the department. MA No.188/PUN/2023 [R] 3 2.1 The show cause notice u/s 274 r.w.s. 271(1)(c) of the Act was issued on 07.03.2016 in the name of Shri. Deepak Jaybhagwan Agrawal L/H of Late Jaibhagwan Sadhuram Agrawal. Thereafter, AO passed the penalty order u/s 271(1)(c) of the Act on 30.09.2016 and levied penalty of Rs.24,05,550/- and issued demand notice accordingly upon the legal heir of the deceased assessee. 3. Being aggrieved with the penalty order u/s 271(1)(c), the legal of the assessee preferred appeal before the Ld. CIT(A) who vide order dated 18.01.2018 had dismissed the appeal of the assessee. Being aggrieved with the order of the Ld.CIT(A), the assessee preferred appeal before the Hon'ble ITAT. 4. Thereafter, the legal heir of the assessee had opted for DTVSV scheme against the demand of Rs.24,04,550/- raised u/s 271(1)(c). The Form 1 and 2 were filed by the assessee on 21.08.2020. Subsequently, Form 3 was issued to the assessee on 28.01.2021. The amount payable under DTVSV was determined at Rs.6,01,140/- being 25% of the penalty demand and after reducing the regular assessment tax of Rs.6,01,140/-. the balance payable was determined at Rs. Nil. On receipt of Form 3 dated 28.1.2021, the assessee submitted the Form 4 on 25.01.2023. 5. Meanwhile, the Hon'ble ITAT had finalized the appellate proceedings ex-parte as none appears at the assessee's behest. The Hon'ble ITAT vide order dated 27.07.2022 deleted the penalty levied by the AO. The relevant extract of the decision of the Hon'ble ITAT is as under: \"A perusal of the case file suggests at the outset that the original assessee herein Shri Jaybhagwan Sadhuram Agarwal had expired on 05.02.2015 whereas the Assessing Officer's penalty proceedings stood finalized on 30.09.2016. That being the case, we quote CIT MA No.188/PUN/2023 [R] 4 vs. Smt. S. Gowri (2019) 417 ITR 45 (Mad) that pending penalty proceedings before the Assessing Officer do not survive after on an assessee's demise. Faced with this situation, Mr. Jasanani vehemently argued that both the learned lower authorities have rightly imposed the impugned penalty after holding the assessee to have concealed his taxable income which could be unearthed only during the course of search at his premises on 12.09.2013. Be that as it may, once we have held that the assessee had expired during the course of penalty proceedings itself pending before the Assessing Officer could pass his section 271(1)(c) order, all these facts stand rendered academic.\" 6. In this context, kind attention is drawn to sub-section (2) of Section 4 of the DTVSV Act, 2020, which reads as under:- \"(2) Upon the filing the declaration, any appeal pending before the Income Tax Appellate Tribunal or Commissioner (Appeals), in respect of the disputed income or disputed interest or disputed penalty or disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate under sub- section (1) of section 5 is issued by the designated authority.\" In the present case, the assessee had opted for DTVSV scheme against the disputed demand of Rs.24,04,550/- raised u/s 271(1)(c) and had submitted Form 1 and 2 on 21.08.2020. Subsequently, in accordance with the provisions of Sec.5(1) of the DTVSV Act, Form No.3 was issued to the assessee determining the amount to be payable by the assessee under the Scheme on 28/01/2021. In response to the same, the assessee submitted Form No.4 on 25.01.2023. Accordingly, the order for full and final settlement of tax arrears under Section 5(2) r.w.s. 6 of the DTVSV Act was issued to the assessee in Form No.5 on 30/05/2023. MA No.188/PUN/2023 [R] 5 7. From the above, it is clear that with the issuance of Form No.3 under sub-section (1) of Sec. 5 to the assessee on 28/01/2021, the appeal filed by the assessee before the Hon'ble ITAT is to be deemed have been withdrawn by him. In fact, later, the final step in the entire process, namely, the issuance of Form No.5 has also been taken in the case. 8. The appeal filed by the assessee under reference was decided by Hon'ble ITAT 'ex-parte' as non appeared on behalf of the assessee. It thus, appears that the fact that the assessee had opted for the DTVSV Scheme in respect of the said appeal, remained to be brought before the Hon'ble Bench while deciding the assessee's aforesaid appeal. This has resulted in adjudication of the appeal by the Hon'ble ITAT on merits whereas the same ought to have been dismissed considering the declaration made by the assessee under the DTVSV. 9. In view of the above, it is prayed that the order dated 27/07/2022 passed by the Hon'ble ITAT \"B\" Bench, Pune in ITA No. 1037/PUN/2018, may kindly be recalled and the appeal of the assessee may be dismissed as withdrawn in view of the provisions of DTVSV, in the interest of revenue and to avoid any claim of the assessee to give order giving effect in future. Hence, the present miscellaneous application to the Hon'ble Tribunal is hereby filed. 10. The application is submitted in Triplicate. A copy of the order sought to be rectified and application for condonation of delay in filing of miscellaneous application is enclosed herewith.” 3. In this case, in ITA No.1037/PUN/2018, ITAT vide order dated 27.07.2022 had allowed assessee’s appeal on merits MA No.188/PUN/2023 [R] 6 regarding the penalty. ITAT in para-2 of the order dated 27.07.2022 observed that Assessee expired on 05.05.2015 whereas penalty proceedings were finalized on 30.09.2016. ITAT held that penalty proceedings do not survive after the Assessee demise, following the decision of Hon’ble Madras High Court in the case of CIT Vs. Smt. S.Gowri [2019] 417 ITR 45 (Mad). 3.1 During the hearing of appeal in ITA No.1037/PUN/2022 on 14.07.2022, the ld.DR for the Revenue has not brought to our notice regarding application filed by Assessee under Direct Tax Vivad se Vishwas Scheme. 3.2 Now the Revenue has filed Miscellaneous Application on 14.07.2023 pleading that Assessee had filed application under Direct Tax Vivad se Vishwas Scheme. However, in the Miscellaneous Application, nowhere Revenue has mentioned the Form Numbers and date of filing. Revenue has not filed copies MA No.188/PUN/2023 [R] 7 of Form No.1, 2, 3, 4, 5 to prove that Assessee had made an application under Direct Tax Vivad se Vishwas Scheme. In these facts and circumstances of the case, since no evidence has been filed by Revenue, the Miscellaneous Application of the Revenue is dismissed. 5. In the result, MA filed by the Revenue is dismissed. Order pronounced in the open Court on 06 February, 2025. Sd/- Sd/- (ASTHA CHANDRA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 6th Feb, 2025/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. MA No.188/PUN/2023 [R] 8 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "