Late Jayant Maneklal Wagle (L/H Rajlaxmi D Parulkar), Pune V. Assistant Commissioner of Income Tax, Circle-2, Pune, Pune

ITA 1018/PUN/2023

AI Insights

The case involves an appeal by the legal heir of the late Jayant Maneklal Wagle against a penalty imposed by the National Faceless Appeal Centre (NFAC) under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2005-2006. The primary legal issue was whether the penalty proceedings could be initiated against the legal representatives after the death of the assessee. The Tribunal examined the applicability of section 159 of the Act, which deals with the liability of legal representatives in tax matters, and referenced a significant ruling by the Madras High Court, which was upheld by the Supreme Court, to conclude that the legal representatives are not liable for penalties post the assessee's death.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137889 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-11-2023
• Assessment Year: 2005-2006
• Appeal Filed On: 20-09-2023
• Other Referred Cases: CIT vs. Gowri [2019] 417 ITR 45 (Madras)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GD PADMAHSHALI, ACCOUNTANT MEMBER ITA No.1018/PUN/2023 Assessment Year 2005-2006 Late Jayant Maneklal Wagle through L/H Mrs. Rajlaxmi Dilip Parulkar, B-9, Varsha Park, Baner, Pune – 411 045 State of Maharashtra. PAN AAQPW7659H vs The ACIT, Circle-2, Room No.106, B-Wing, PMT Commercial Complex, Shankarshet Road, Swargate, Pune – 411 037. State of Maharashtra Appellant Respondent For Assessee : Shri Sachin P. Kumar, Adv. For Revenue : Shri Ramnath P. Murkunde Date of Hearing : 02.11.2023 Date of Pronouncement : 03.11.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for assessment year 2005- 2006, arises against the National Faceless Appeal Centre [in short “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/ 250/2023-24/1054836440(1), dated 03.08.2023, involving proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties at length. Case file perused. 2 ITA.No.1018/PUN/2023 2. It emerges at the outset that there arises the first and foremost preliminary issue in the instant case file regarding correctness of sec.27191)(c) penalty proceedings itself initiated after the assessee’s demise. This is for the precise reason that the assessee Shri Jayant Maneklal Wagle had left for his heavenly abode on 19.11.2007 followed inter alia by the Assessing Officer’s quantum assessment dated 30.12.2008; the CIT(A)'s first round lower appellate order dated 28.02.2014; sec.271(1)(c) penalty order dated 30.03.2016; this tribunal’s order in ITA.No.1521/PUN./2014 dated 14.11.2018 and NFAC’s impugned order before us dated 03.08.2023. 3. The Revenue vehemently argues before us that the impugned penalty proceedings are very much akin to an assessment giving rise to recovery of tax demands and therefore, the assessee’s legal representatives are liable for the corresponding default u/sec.271(1)(c) in light of sec.159(1) to (6) of the Act. 4. We find that the instant issue is no more res integra in light of [2019] 417 ITR 45 (Madras) CIT vs. Gowri decided against the department, as upheld in SLP (Civil) No.26378/2019 dated 23.08.2019 before the hon’ble apex 3 ITA.No.1018/PUN/2023 court. Their lordships hold in very clear terms that an assessee’s legal representatives are not liable in penalty proceedings after his/her demise in terms of sec.159 of the Act. We adopt the very reasoning herein as well to decline the Revenue’s arguments supporting the impugned penalty of Rs.24,07,354/- in question. Ordered accordingly. All other pleadings on merits stand render academic. 5. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 03.11.2023. Sd/- Sd/- (GD PADMAHSHALI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 03 rd November, 2023 VBP/- Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The NFAC, Delhi 4. The Pr. CIT-2, Pune concerned. 5. DR, ITAT, “A” Bench, Pune. 6. Guard File. BY ORDER, // TRUE COPY // Senior Private Secretary ITAT, Pune.