PUSHPA P. BHANSALI, MUMBAI V. ITO WD 19(1)(1), MUMBAI

ITA 186/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48579 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: JITENDRA SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 186/UM/2010 (ASSESSMENT YEAR 2005-06) SMT.PUSHPA P BHANSALI THROUGH HEMANT S GANDHI LEGAL HEAR 6 RAM BHUVAN, 138, 10 TH ROAD, KHAR(W), MUMBAI-400052 PAN:AAEPB6752G .APPELLANT VS INCOME TAX OFFICER, WARD 19(1)(1) AAYAKAR BHAVAN M K ROAD, MUMBAI-400020 ..RESPONDENT ASSESSEE BY : SHRI JITENDRA SINGH REVENUE BY :SHRI HARI GOVIND SINGH O R D E R PER VIJAY PAL RAO THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30.10.2009 OF CIT(A) ARISING FROM THE PENALTY ORDER PASSED U/S 271(1)( C ) FOR THE ASSESSMENT YEA R 2005-06. 2. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT T HE ASSESSEE DIED ON 14.08.2007 AND SHRI HEMANT S G ANDHI, THE BROTHER OF THE ASSESSEE HAS FILED AN APPLICATIO N DATED ITA NO. 186/UM/2010 (ASSESSMENT YEAR 2005-06) 2 12.08.2010 FOR BRINGING HIM A LEGAL HAIR OF THE ASS ESSEE. HE HAS ALSO FILED AN AFFIDAVIT DULY NOTARIZED ON 13.08 .2010 FOR BRINGING ON RECORD THE FACT THAT THE ASSESSEE., THE SISTER OF THE DEPONENT EXPIRED ON 14.08.2007 AND THE INFORMA TION REGARDING THIS WAS GIVEN TO THE AO DURING THE COUR SE OF ASSESSMENT PROCEEDING ON 2.11.2008. THEREFORE, TH E AR HAS SUBMITTED THAT SHRI HEMANT S GANDIHI, THE BROTHER O F THE ASSESSEE BE TAKEN ON RECORD AS LEGAL HEIR. 3. AFTER HEARING THE LEARNED AR AND ON PERUSAL OF T HE AFFIDAVIT AND APPLICATION, WE ALLOW THE REQUEST OF THE LEARNED AR AND TAKE ON RECORD SHRI HEMANT S GANDHI, THE BRO THER OF THE ASSESSEE AS LEGAL HEIR AND DECIDE THE APPEAL AC CORDINGLY. 4. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL, HOWEVER, THE ONLY ISSUE ARISES FOR OUR CONSIDERATIO N AND ADJUDICATION IS WHETHER IN THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE CIT(A) IS JUSTIFIED IN UPHOLDING THE LE VY OF PENALTY OF RS. 69,403/- U/S 271(1)( C ). 5. DURING THE COURSE OF ASSESSMENT PROCEEDING THE AO NOTICED THAT THE ASSESSEE HAS SHOWN THE INCOME FRO M SHORT TERM CAPITAL GAIN ON SALE OF SHARES OF M/S ANDHRA BANK AND M/S GAIL WHICH WERE PURCHASES AT FUTURE AND OPTION S (F ITA NO. 186/UM/2010 (ASSESSMENT YEAR 2005-06) 3 AND O) SEGMENT. THE ASSESSEE HAS EARNED AN AMOUNT OF RS.3,40,210/- ON SALE OF THESE SHARES. THE AO TRE ATED THE PROFIT ON SALE OF THESE TRANSACTIONS AS BUSINESS I NCOME OF THE ASSESSEE INSTEAD OF SHORT TERM CAPITAL GAINS ADMITT ED BY THE ASSESSEE. THE PENALTY U/S 271(1)( C ) WAS INITIATE D AND A PENALTY OF RS.69,403 WAS LEVIED VIDE ORDER DATED 19.05.2008. 6. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVI ED BY THE AO VIDE IMPUGNED ORDER. 7. BEFORE US, THE LEARNED AR SUBMITTED THAT THE ASS ESSMENT AS WELL AS THE PENALTY ORDERS HAVE BEEN PASSED A GAINST THE DEAD PERSON. HE HAS SUBMITTED THAT THE ASSESSEE MR S.PUSHPA BHANSALI AN OLD LADY WAS BED RIDDEN FOR PAST SO MANY YEARS AND ULTIMATELY DIED ON 14.08.2007. THE LEARNED AR SUBMITTED THAT THE REPRESENTATIVE OF THE ASSESSEE HAD FILED A LETTER DATED 1.11.2007 BEFORE THE AO WHEREBY EXPLAINING THIS FA CT OF DEATH OF THE ASSESSEE. DESPITE THE SAID FACT, THE AO PROCEEDED WITH THE ASSESSMENT AND ALSO LEVIED THE PENALTY. 8. ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. WE FIND FROM THE FACTS ON RECORD THAT THE ITA NO. 186/UM/2010 (ASSESSMENT YEAR 2005-06) 4 REPRESENTATIVE OF THE ASSESSEE HAD FILED A LETTER D ATED 1.11.2007. IN THE SAID LETTER IT WAS STATED BY TH E DEPONENT THAT THE ASSESSEE MRS.PUSHPA P BHANSALI DIED ON 14 .08.2007 AFTER LONG ILLNESS AND TILL THEN SHE WAS BED RIDDEN . ONCE THIS FACT WAS BROUGHT TO THE NOTICE OF THE AO, THEN WIT HOUT BRINGING THE LEGAL HEIRS OF THE ASSESSEE ON RECORD, HOW THE AO CANT PROCEED WITH THE ASSESSMENT. FURTHER, ON THE BASIS OF THE ASSESSMENT ON DEAD PERSON FRAMED ON 20.11.2007, THE AO ALSO LEVIED PENALTY U/S 271(1)( C) VIDE ORDER DATED 19.05.2008. WITHOUT GOING INTO THE MERITS OF THE LEVY OF THE P ENALTY WE HOLD THAT WHEN THE FACTURM OF THE DEATH OF THE ASES EEE WAS BROUGHT ON RECORD BEFORE THE AO DURING THE ASSESSM ENT PROCEEDINGS, THE PENALTY UNDER SECTION 271(1)( C ) IS NOT SUSTAINABLE IN LAW. 10. ACCORDINGLY, WE HELD THE PENALTY ORDER IS VOID ABINITIO. 11. IN THE RESULT THE APPEAL OF THE ASSESSEE-THROUG H LR IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29TH APRIL, 2011 SD SD (J.SUDHAKAR REDDY) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, ON THIS 29TH DAY OF APRIL, 2011 SRL:6411 COPY TO: ITA NO. 186/UM/2010 (ASSESSMENT YEAR 2005-06) 5 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI