LATE SHRI PADAMSHI A SHAH, MUMBAI V. ITO 14(1)(1), MUMBAI

ITA 4291/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2218 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C ,MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4291/MUM/2014 FOR (ASSESSMENT YEAR : 2007-08 ) LATE SHRI PADAMSHI A SHAH (THROUGH MR. DEVYAN P. GALA (LEGAL HEIRS), NALINI RULLING WORKS, NAIGAON BHOIWADA, CROSS ROAD, NEXT TO NAT STEEL, NEAR BOMBAY DYEING MILL, NAIGAON, DADAR, MUMBAI-400014. PAN: AAEPS4111N VS. ITO, 14(1)(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.M. PORWAL (AR) REVENUE BY : SHRI C.W. ANGOLKAR (DR) DATE OF HEARING : 31.10.2016 DATE OF PRONOUNCEMENT : 02.11.2016 O R D E R PER PAWAN SINGH, JM: 1. THIS APPEAL U/S 253 OF THE INCOME-TAX ACT IS DIRECT ED BY LD. AUTHORIZED REPRESENTATIVES (LRS) OF ASSESSEE AGAINST THE ORDE R OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) (FOR SHORT THE CIT(A)25 MUMBA I DATED 02.04.2014 FOR ASSESSMENT YEAR (AY) 2007-08. THOUGH THE APPELLANT HAS RAISED AS MANY AS FIVE GROUNDS OF APPEAL, HOWEVER, AS PER OUR CONSIDERED O PINION, THE ONLY SUBSTANTIAL GROUND OF APPEAL IS WHETHER CIT(A) ERRED IN CONFIR MING THE LEVY OF PENALTY OF RS. 1,34,077/- U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 02.11.2007 DECLARING TOTAL INCOME OF RS. 1,84,44 0/-. THE ASSESSMENT WAS COMPLETED ON 30.12.2009 U/S 143(3) IN THE ASSESSMEN T ORDER, THE ASSESSING OFFICER (AO) DISALLOWED THE INTEREST EXPENSES OF RS. 4,60,3 93/-, THE ASSESSEE FILED APPEAL 2 ITA NO. 4291/M/2014 LATE SHRI PADA MSHI A. SHAH AGAINST THE QUANTUM ASSESSMENT BUT THE SAME WAS DIS MISSED BY LD. CIT(A). ACCORDINGLY, NOTICE U/S 274 R.W.S. 271(1)(C) ISSUED ON 10.05.2010. THE LRS OF ASSESSEE CONTESTED THE PENALTY PROCEEDINGS. THE LR S OF ASSESSEE FILED REPLY TO THE NOTICE AND CONTENDED THAT THE ASSESSEE EXPIRED ON 1 1.11.2008. THE LRS OF ASSESSEE FILED COPY OF DEATH CERTIFICATE OF ASSESSEE ALONG W ITH THE TDS, CERTIFICATE AND CONFIRMATION OF LOAN. THE CONTENTION OF LD. LRS O F ASSESSEE WAS NOT ACCEPTED. THE AO LEVIED THE PENALTY U/S 271(1)(C) @ 100% ON THE T AX SOUGHT TO BE EVADED VIDE ORDER DATED 28.03.2012. THE APPELLANT/LRS OF ASSES SEE FILED APPEAL BEFORE THE CIT(A) WHEREIN THE PENALTY ORDER WAS CONFIRMED. THU S, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE APPELLANT/LRS OF THE ASSE SSEE HAS FILED THE PRESENT APPEAL. 3. WE HAVE HEARD LD. AUTHORIZED REPRESENTATIVE (AR) OF THE APPELLANT AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE SEEN THAT ASSESSMENT WAS COMPLET ED U/S 144 OF THE ACT. THE AO DISALLOWED THE INTEREST EXPENSES IN ABSENCE OF C OMPLETE DETAILS OF THE LOAN CONFIRMATION. THE AO DISALLOWED THE ENTIRE INTEREST EXPENSES CLAIMED AND INITIATED THE PENALTY. BEFORE ASSESSMENT COULD BE COMPLETED, THE ASSESSEE DIED ON 11.11.2008. THE NOTICE U/S 274 R.W.S. 271(1)(C) WAS SERVED ONLY ON 01.06.2010 BY THAT TIME THE ASSESSEE EXPIRED. THIS FACT WAS CLEAR LY COMMUNICATED TO AO. 4. THE PENALTY PROCEEDINGS ARE INDEPENDENT OF ASSESSME NT PROCEEDINGS. THE AO INITIATED THE PENALTY PROCEEDING AGAINST THE DEAD P ERSON. THE LRS OF THE ASSESSEE INTIMATED THE AO ABOUT THE DEATH OF ASSESSEE. THE A O HAS RECORDED THAT IT IS PERTINENT TO MENTION HEREIN THAT THE ASSESSEE PASSE D AWAY ONLY ON 11.11.2008. IT IS SETTLED LAW THAT NO PROCEEDING CAN BE INITIATED AGA INST THE DEAD PERSON. ADMITTEDLY, THE ASSESSEE DIED BEFORE THE SERVICE OF NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT WHICH WAS SERVED ONLY ON 01.06.2010. THERE IS NO MA TERIAL ON RECORD TO SHOW THAT ANY FRESH NOTICE U/S 274 R.W.S. 271(1)(C) WAS SERVE D ON THE ASSESSEE FOR INITIATION OF PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT. AS PER OUR CONSIDERED OPINION, THE PROCEEDINGS INITIATED BY AO WERE VOID AB-INITIO. TH US, ALL SUBSEQUENT ACTION INITIATED BY AO ARE INVALID, WE HOLD ACCORDINGLY. A S WE HAVE DECLARED THE PROCEEDING AS VOID AB-INITIO AND INVALID, THUS, ANY DISCUSSION ON MERIT IS BECAME ACADEMIC. 3 ITA NO. 4291/M/2014 LATE SHRI PADA MSHI A. SHAH 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND NOVEMBER, 2016. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 02/11/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/