PUNEET PRAKASH MEHRA , MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-16(1), MUMBAI

ITA 5424/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5911 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 22-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIRAMA KARTIKEYAN
• Assessee Lawyers: NEELAM C JADHAV
• Keywords: Principle of natural justice; Wrong claim

Judgement Text

, ,, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER ./ ITA NO.5424&5423/MUM/2017 ( / ASSESSMENT YEAR :2010-2011) MR. PUNEET PRAKASH MEHRA, 30 SUMEET, VITHAL NAGAR, CHS LIMITED, JVPD SCHEME, JUHU, MUMBAI - 400049 VS. ACIT, CIRCLE-16(1), MUMBAI-400020 ./PAN NO. : AABPM 2733 R ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : MS. NEELAM C. JADHAV, AR /REVENUE BY : SHRI ABHIRAMA KARTIKEYAN, DR / DATE OF HEARING : 07/01/2019 /DATE OF PRONOUNCEMENT 15/01/2019 / O R D E R PER SHRI RAJESH KUMAR, AM : THESE TWO APPEALS BY ASSESSEE ARISE OUT OF THE ORDE R OF THE CIT(A) 4, MUMBAI, DATED 10.05.2017 & 09.05.2017, WHICH IN TURN HAS ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER U/S.27 1(1)(C) AND 271B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) RELATING TO A.Y. 2010-2011. ITA NO.5424/MUM/2017(AY : 2010-2011): 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF PENALTY OF RS.3,56,453/- BY THE CIT(A) AS IMPOSED B Y THE AO U/S.271(1)(C) OF THE ACT WITHOUT VERIFICATION OF FACTS THAT EVEN DESPITE GIVING THE INTIMATION OF DEATH OF THE ORIGINAL ASSESSEE-SHRI P RAKASH MEHRA, THE ORDER U/S.143(3) OF THE ACT PASSED IN THE NAME OF DECEASE D PERSON AND LATER ON AN ATTEMPT WAS MADE TO RECTIFY THE SAID FATAL ERROR BY WAY OF CORRIGENDUM ITA NO.5424&5423/17 2 DATED 30.03.2013. THE ASSESSEE HAS ALSO CHALLENGED THE IMPOSITION OF PENALTY ON TECHNICAL GROUND THAT THE AO HAS FAILED TO SPECIFY PARTICULAR LIMB ON WHICH THE PENALTY WAS PROPOSED TO BE LEVIED . 3. FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RETUR N OF INCOME ON 30.03.2012 DECLARING THE TOTAL INCOME OF RS.2,89,73 ,608/- WHICH WAS PROCESSED U/S.143(1) OF THE ACT. THEREAFTER THE RET URN WAS FILED BY THE LEGAL HEIR OF SHRI PUNEET PRAKASH MEHRA AS THE ASSE SSEE MR. PRAKASH MEHRA WAS EXPIRED ON 18.05.2009 FOLLOWING LONG ILLN ESS AND THE FACT WAS BROUGHT TO THE NOTICE OF THE AO DURING THE COURSE O F ASSESSMENT PROCEEDINGS, A PROOF WHEREOF IS ATTACHED IN PAPER B OOK AT PAGE 10A. HOWEVER, THE AO FAILED TO BRING ON RECORD THE LEGAL HEIR AND FRAMED THE ASSESSMENT IN THE NAME OF DEAD PERSON VIDE ORDER DA TED 02.01.2013 WHEREAS THE FACT WAS REPORTED TO THE AO ON 24.12.20 12. THEREAFTER THE PENALTY NOTICE U/S.271(1)(C) OF THE ACT WAS ISSUED IN THE NAME OF PUNEET MEHRA ON 02.01.2013 WITHOUT STRIKING OFF THE IRRELE VANT PART OF THE PENALTY NOTICE MEANING THEREBY THAT THE PARTICULAR LIMB ON WHICH THE PENALTY WAS PROPOSED WAS NOT MENTIONED AND FINALLY THE PENALTY WAS IMPOSED IN THE NAME OF SHRI PUNEET MEHRA, THE LEGAL HEIR OF LATE S HRI PRAKASH MEHRA ON 30.07.2013 THOUGH VIDE A CORRIGENDUM DATED 30.05.2 013 THE MISTAKE IN THE ASSESSMENT ORDER QUA PASSING THE SAME IN THE DE AD PERSON WAS CORRECTED BY STATING IN THE CORRIGENDUM THAT IN TH E ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT, DATED 02.01.2013 IN T HE NAME OF PRAKASH MEHRA, INSTEAD OF PUNIEET P MEHRA, L/H OF SHRI PRAK ASH N MEHRA AND THUS, THE NAME OF ASSESSEE HAS WRONGLY BEEN MENTION ED AS PRAKASH N. ITA NO.5424&5423/17 3 MEHRA. THE AO ALSO STATED THAT SHRI PRAKASH MEHRA EXPIRED ON 17.05.2009 AND THE SAME IS SUBSTITUTED BY SHRI PUNE ET P MEHRA. THE ASSESSEE CHALLENGED THE ORDER OF PENALTY LEVYING PE NALTY ON THE DEAD PERSON IN THE NAME OF PRAKASH MEHRA, WHO EXPIRED ON 17.05.2009. IN APPEAL, THE CIT(A) DISMISSED THE APPEAL OF THE ASSE SSEE ON THE GROUND THAT THE DEFECT IN THE ASSESSMENT ORDER WAS CURED A ND RECTIFIED BY PASSING A CORRIGENDUM DATED 30.05.2013 AND THE PENA LTY ORDER WAS PASSED IN THE NAME OF CORRECT PERSON I.E. L/H OF LA TE SHRI PRAKASH MEHRA AND, HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFOR E US. 4. LD. AR VEHEMENTLY SUBMITTED BEFORE THE BENCH TH AT THE AO WAS DULY INFORMED ABOUT THE ASSESSEE BEING EXPIRED ON 1 7.05.2009 AND ALSO FACT THAT THE RETURN WAS FILED BY MR. PUNEET PRAKAS H MEHRA AS LEGAL HEIR OF THE ASSESSEE. LD. AR FURTHER SUBMITTED BEFORE THE B ENCH THAT THE PENALTY ORDER CANNOT BE BASED UPON AN ASSESSMENT ORDER WHIC H IS PASSED ON A DEAD PERSON. WITHOUT PREJUDICE, THE ASSESSEE ALSO S UBMITTED THAT THE ASSESSEE HAS NOT CONCEALED ANY PARTICULAR OF INCOME AND ALL THE DETAILS OF THE SAID EXPENDITURE WAS AVAILABLE AND SHOWN IN THE RETURN OF INCOME AS THE SAME REPRESENTED FROM THE MEDICAL BILLS OF THE ASSESSEE AND THEREAFTER THE DISALLOWANCE IS PURELY DUE TO DIFFER ENCE OF OPINION ON WHICH THE PENALTY IS NOT LEVIABLE. THE ASSESSEE IN HIS D EFENCE OF HIS ARGUMENTS RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS, 322 ITR 158(SC), IN WHICH T HE LD. AR STATED THAT MERE CLAIM OF EXPENSES WHICH ARE WRONG OR NOT ACCE PTABLE TO THE REVENUE DOES NOT ATTRACT ANY PENALTY. ON THE ISSUE OF PASSING ORDER IN THE ITA NO.5424&5423/17 4 NAME OF DEAD PERSON, LD. AR RELIED ON THE DECISIONS OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF JAI NARAIN UPADHYAY VS. ACIT, [2012] 23 TAXMANN.COM 242 (LUCK.)(TM) AND THE DECISION OF HON BLE MADRAS HIGH COURT IN THE CASE OF ALAMELU VEERAPPAN VS. ITO, [20 18] 95 TAXMANN.COM 155(MADRAS). WITHOUT PREJUDICE, ON THE ISSUE OF NON -STRIKING OFF THE IRRELEVANT PART OF THE PENALTY NOTICE ON WHICH THE PENALTY WAS PROPOSED TO BE LEVIED, LD. AR RELIED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF IN THE CASE OF MANJUNATHA COTTON AND G INNING FACTORY & ORS., 359 ITR 565 (KAR.) AND THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF ASHOK PAI VS CIT 292 ITR 11(SC), CIT VS SAMSON PERINCHERY ITA NO 1154 OF 2014 ORDER DATED 5.1.2017, CIT VS. SSAS EM ERLAD MEADOWS, [2016] 73 TAXMANN.COM 241(KAR.). LD. AR FURTHER SUB MITTED THAT THE HONBLE SUPREME COURT HAS REJECTED THE SLP VIDE ORD ER DATED 05.08.2016, REPORTED IN [2016] 73 TAXMANN.COM 248 (SC) UPHOLDING THE ORDER OF THE HONBLE KARNATAKA HIGH COURT. 5. LD. DR BEFORE US RELIED ON THE ORDERS OF AUTHORI TIES BELOW. 6. WE HAVE HEARD RIVAL SUBMISSIONS OF THE PARTIES A ND PERUSED THE MATERIAL ON RECORD. WE FIND IN THIS CASE THAT THE A SSESSEE DIED ON 18.05.2009 AND THE RETURN OF INCOME WAS FILED BY TH E LEGAL HEIR OF ASSESSEE SHRI PUNEET PRAKASH MEHRA, HOWEVER, THE A O DESPITE HAVING BEEN INFORMED AND INTIMATED ABOUT THE DEATH OF THE ASSESSEE PASSED THE ASSESSMENT ORDER IN THE NAME OF DEAD PERSON SHRI PR AKASH MEHRA AND THEREAFTER THE PENALTY PROCEEDINGS WERE INITIATED A GAINST MR. PRAKASH MEHRA BY ISSUING NOTICE U/S.274/271(1)(C) OF THE A CT IN THE NAME OF ITA NO.5424&5423/17 5 PRAKASH MEHRA. THEREAFTER THE AO PASSED A CORRIGEND UM ON 30.05.2013 WHEREBY THE AO PROPOSED TO RECTIFY THE MISTAKE IN T HE ASSESSMENT ORDER AND THE NAME OF MR. PRAKASH MEHRA WAS SUBSTITUTED BY SHRI PUNEET PRAKASH MEHRA, THE LEGAL HEIR OF MR. PRAKASH MEHRA AND THEREAFTER THE PENALTY ORDER WAS PASSED IN THE NAME OF SHRI PUNEET P MEHRA VIDE ORDER DATED 30.07.2013. NOW, THE ISSUE BEFORE US IS AS TO WHETHER THE PENALTY CAN BE IMPOSED ON THE BASIS OF THAT ORDER WHICH WAS PASSED IN THE NAME OF DEAD PERSON AND SO MUCH SO EVEN THE NOTICE ISSUE D IN THE NAME OF DEAD PERSON NONETHELESS THE PENALTY ORDER WAS PASSE D IN THE NAME OF LEGAL HEIR. IN THE CASE OF ALAMELU VEERAPPAN (SUPRA ), THE HONBLE MADRAS HIGH COURT HAS HELD THAT NOTICE ISSUED IN THE NAME OF DEAD PERSON IS NOT ENFORCEABLE IN LAW. IN THE CASE OF JAI NARAIN UPADH YAY (SUPRA), THE THIRD MEMBER OF THE LUCKNOW BENCH OF THE TRIBUNAL HAS DE CIDED THAT IF THE ASSESSEE DIED DURING THE PENALTY PROCEEDINGS, THE A O CANNOT PASS THE PENALTY ORDER WITHOUT ISSUING FRESH NOTICE IN THE NAME OF LEGAL HEIR OF THE DECEASED AND ORDER SO PASSED WITHOUT ISSUING ANY NO TICE IS NOT SUSTAINABLE IN LAW BEING VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. IN THE PRESENT CASE BEFORE US THE ASSESSMENT WAS FRAMED IN THE NAME OF DEAD PERSON AND PENALTY NOTICE WAS ALSO ISSUED IN THE N AME OF DEAD PERSON DESPITE THE AO BEING INFORMED QUA THE DEATH OF THE ASSESSEE. WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAME, ARE OF THE CONSIDERED VIEW THAT THE PENALTY ORDER IN THE PRESENT CASE CANNOT BE SUS TAINED. ON MERIT, WE OBSERVE THAT THE PENALTY HAS BEEN IMPOSED ON THE ME DICAL EXPENSES CLAIMED BY THE ASSESSEE TO THE TUNE OF RS.14,73,570 /- INCURRED ON THE ITA NO.5424&5423/17 6 MEDICAL TREATMENT OF THE ASSESSEE LATE SHRI PRAKASH MEHRA AND THIS MERE A WRONG CLAIM ON THE PART OF THE ASSESSEE WHIC H IS NOT ACCEPTABLE TO THE REVENUE CANNOT BE A GROUND FOR IMPOSING PENALT Y AS HAS BEEN DECIDED IN THE CASE OF RELIANCE PETROPRODUCTS (SUPR A). IN VIEW OF OUR ABOVE OBSERVATIONS, WE ARE INCLINED TO SET ASIDE TH E ORDER OF CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY SO LEVIED. ITA NO.5423/MUM/2017 (AY : 2010-2011) 7. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS AGAINST THE CONFIRMATION OF PENALTY OF RS.1 LAKHS U/S.271B OF T HE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSMENT ORDER WAS PASSED IN THE NAME OF PRAKASH MEHRA BY THE AO AND SUBSEQUENTLY PENALTY PROCEEDINGS U/S.271B OF THE ACT WAS ALSO INITIATED. NOTICE WAS ALSO ISSUED IN THE NAME OF DEAD PERSON WHO DIED ON 18.05.2009 DURING THE FI NANCIAL YEAR ITSELF, HOWEVER, THE PENALTY ORDER WAS PASSED U/S.271B DATE D 30.07.2013 ON THE LEGAL HEIRS. 8. SINCE WE HAVE ALREADY DECIDED THE ISSUE IN APPEA L OF THE ASSESSEE IN ITA NO.5424/MUM/2017 WHEREIN WE HAVE HELD THAT T HE PENALTY ORDER PASSED BY THE AO IS NOT SUSTAINABLE IN LAW AS THE A O HAS NOT ISSUED ANY FRESH NOTICE TO THE LEGAL HEIRS OF THE DECEASED. TH EREFORE, OUR FINDINGS IN THE ABOVE APPEAL OF THE ASSESSEE SHALL ALSO APPLY MUTATIS MUTANDIS TO THIS APPEAL OF THE ASSESSEE. THE AO IS DIRECTED TO DELETE THE PENALTY. ITA NO.5424&5423/17 7 9. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/01/2019. SD/- (RAM LAL NEGI) SD/- (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 15/01/2019 . . /PRAKASH KUMAR MISHRA , SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSISTANT 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//