Assistant Commissioner of Income-tax, V. Sunderdas U. Panjabi, Pune

ITA 1099/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0760 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-12-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 1 099 /PN/201 4 / ASSESSMENT YEAR : 20 0 0 - 0 1 THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1) , PUNE . / APPELLANT VS. SHRI SUNDERDAS UDHARAM PANJABI, MARBLE ARCH. CO - OP. HOUSING SOCIETY, FLAT NO.23 /24, 6 TH FLOOR, GANESHKHIND ROAD, AUNDH, PUNE 4110 18 . / RESPONDENT PAN: AA ZPP3797N / APPELLANT BY : S HRI HITENDRA NINAWE / RESPONDENT BY : SHRI NILESH KHANDELWAL / DATE OF HEARING : 1 4 . 1 2 .2015 / DATE OF PRONOUNCEMENT: 17 .1 2 .2015 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - CENTRAL , PUNE , DATED 20 . 0 2 .20 1 4 RELATING TO ASSESSMENT YEAR 20 0 0 - 0 1 AGAIN ST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1 099 /PN/20 1 4 SUNDERDAS U. PANJABI 2 I) . WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS CORRECT TO DELETE THE PENALTY LEVIED ON DECEASED ASSESSEE WHEN THE APEX COURT IN THE CASE OF FIRST ADDITIONAL INCOME - TAX OFFICER VS. T.M.K. ABDUL KASSIMI (1962) 46 ITR 149 (SC) HAS HELD THAT ON SERVICE OF NOTICE, THE LEGAL REPRESENTATIVE BECOMES THE ASSESSEE FOR ALL PURPOS ES UNDER THE ACT, INCLUDING RECOVERY AND PENAL PROCEEDINGS.? II . THE A PPELLANT CRAVES LEAVE TO ADD , AMEND OR ALTER AN Y OF THE ABOVE GROUNDS OF APPEAL. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST DELETION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT AT RS. 10,25,640/ - . 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, CONSEQUENT TO SEARCH AND SEIZURE OPERATIONS CONDUCTED IN ASSESSEES GROUP CASES ON 17.03.2006, ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT WAS COMPLETED IN THE CASE OF THE A SSESSEE AND CERTAIN ADDITIONS WERE MADE ON ACCOUNT OF CERTAIN INVESTMENTS MADE BY THE ASSESSEE. PURSUANT THERETO, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. SINCE THE ADDITIONS MADE BY UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. SINCE THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE CONFIRMED BY T HE CIT(A), THE ASSESSING OFFICER HELD THE ASSESSEE LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND PENALTY @ 150% OF THE TAX SOUGHT TO BE EVADED AT RS. 10,25,640/ - WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE ORDER LEVYING PENALTY U NDER SECTION 271(1)(C) OF THE ACT WAS PASSED ON 30.03.2012 IN THE NAME OF SHRI SUNDARDAS UDHARAM PUNJABI I.E. THE ASSESSEE. 5. BEFORE THE CIT(A), THE CONTENTION OF THE ASSESSEE WAS THAT THERE WAS NO MERIT IN LEVY OF PENALTY FOR CONCEALMENT AS THERE WAS NO COGENT MATERIAL OR EVIDENCE FROM WHICH IT COULD BE INFERRED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF HIS INCOME OR HAD DELIBERATELY FURNISHED INACCURATE PARTICULARS IN RESPECT THERETO. WITHOUT PREJUDICE TO THE SAME, IT WAS FURTHER SUBMITTED THA T THE ITA NO. 1 099 /PN/20 1 4 SUNDERDAS U. PANJABI 3 ASSESSEE HAD FILED RETURN OF INCOME VIDE LETTER DATED 12.04.2007 AND HE EXPIRED ON 30.11.2007 . IN THIS REGARD, TWO CONTENTIONS WERE RAISED BY THE LEGAL HEIR OF THE ASSESSEE THAT FIRST, RETURN OF INCOME WAS FILED BY THE ASSESSEE AND THE LEGAL HEIRS W ERE NOT IN A POSITION TO DEFEND THE SAME. FURTHER, THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD THE LEGAL HEIRS AND THEREFORE, THE ENTIRE PROCEEDINGS WERE VITIATED , SINCE THE PENALTY ON A DEAD PERSON COULD NOT BE LEVIED . IN THIS REGARD, RELIANCE WAS P LACED ON SERIES OF DECISIONS. THE CIT(A) ADJUDICATED THE ALTERNATE PLEA OF THE ASSESSEE VIDE PARAS 6.10 AND 6.11 OBSERVING THAT AS PER LEGAL POSITION, WHEREIN ASSESSMENT ORDER WAS FRAMED IN THE NAME OF PERSON WAS DEAD AT THE TIME OF ASSESSMENT PROCEEDINGS AND WHERE THE LEGAL HEIRS OF THE ASSESSEE DID NOT PARTICIPATE IN THE PROCEEDINGS, THEN THE SAME WOULD BE VOID. SINCE THE PROCEEDINGS UNDER CONSIDERATION WERE PENALTY PROCEEDINGS, THE CIT(A) OBSERVED THAT THE SAME BEING MORE STRINGENT IN NATURE THAN THE A SSESSMENT PROCEEDINGS , THE LAW HAD TO BE APPLIED TO THE SAID PROCEEDINGS ALSO . FURTHER, REFERENCE WAS MADE TO THE COP Y OF ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN ASSESSEES CASE ON 28.12.2007 , WHICH CLEARLY STATES JEETENDRA SUNDERDAS PANJABI, LEGAL HEIR TO LATE SUNDER U. PANJABI. SINCE THE FACT OF THE ASSESSEE BEING NOT ALIVE WAS KNOWN TO THE ASSESSING OFFICER EVEN IN 2007, THE CIT(A) HELD THAT THERE WAS NO MERIT IN THE IMPUGNED PENALTY ORDER PASSED IN THE NAME OF DECEASED HIMSELF IN 2012. IN VIEW THEREOF AND ALSO CONSIDERING PARTIAL RELIEF BEING GIVEN BY THE TRIBUNAL IN RESPECT OF ADDITIONS MADE, THE CIT(A) HELD THAT THERE WAS NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO. 1 099 /PN/20 1 4 SUNDERDAS U. PANJABI 4 7. SHRI HITENDRA NINAWE APPEARED FOR REVENUE AND SHRI NILESH KHANDELWAL APPEARED FOR THE ASSESSEE AND PUT FORWARD THEIR CONTENTIONS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING BEFORE US IS IN RELATION TO TH E PENALTY PROCEEDINGS INITIATED AGAINST THE ASSESSEE, WHO EXPIRED BEFORE THE DATE ON WHICH THE PENALTY PROCEEDINGS WERE COMPLETED AGAINST HIM. THE ASSESSEE HAD FURNISHED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 12.04.2007 VIDE A LETTER AND HE EXPIRED ON 30.11.2007. THE ASSESSMENT WAS COMPLETED AGAINST THE ASSESSEE ON 28.12.2007. HOWEVER, THE ASSESSEE EXPIRED ON 30.11.2007. ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS PASSED ON 30.03.2012 IN THE NAME OF ASSESSEE HIM SELF. THE LAW ON THIS POINT IS CLEAR THAT NO ASSESSMENT CAN BE COMPLETED IN THE NAME OF DEAD PERSON AND THE PENALTY PROCEEDINGS BEING MORE STRINGENT, NO ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE PASSED AGAINST DEAD PERSON, WITHOUT BRINGING LEGA L HEIRS ON RECORD. BEFORE THE CIT(A), LEGAL HEIR OF THE ASSESSEE HAD PRODUCED EVIDENCE THAT THE KNOWLEDGE OF DEMISE OF THE ASSESSEE WAS KNOWN TO THE ASSESSING OFFICER IN 2007 ITSELF AND THERE WAS NO MERIT IN PASSING THE PENALTY ORDER IN THE NAME OF DECEAS ED HIMSELF IN 2012. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHERE THE ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT HAS BEEN PASSED AGAINST THE DEAD PERSON WITHOUT BRINGING LEGAL HEIRS ON RECORD, WE FIND NO MERIT IN THE ORDER PASSED LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT BY THE ASSESSING OFFICER. UPHOLDING THE ORDER OF CIT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 9. ANOTHER POINT TO BE NOTED IS THAT DESPITE THE ORDER OF CIT(A), IN WHICH IT HAS BEEN CLEARLY ME NTIONED THAT THE ASSESSEE HA D EXPIRED, THE PRESENT APPEAL ITA NO. 1 099 /PN/20 1 4 SUNDERDAS U. PANJABI 5 HAS BEEN FILED BY THE REVENUE BEFORE THE TRIBUNAL AGAINST THE ASSESSEE, WHO IS DECEASED AND THE SAME IS NOT MAINTAINABLE, HENCE, THE SAME IS DISMISSED. 10 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 17 TH DAY OF DECEM BER , 2015. SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 17 TH DECEM BER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE A PPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - CENTRAL , PUNE ; 3. ( ) / THE CIT (A) - CENTRAL , PUNE ; 4. / THE CIT - CENTRAL, PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY O RDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE