Late Shri Atmaram Tukaram Karad Through Legal Heir Shri. Sagar Atmaram Karad, Nashik V. Income-Tax Officer, Ward 2(1), Nashik

ITA 942/PUN/2022

AI Insights

The case involves appeals by the legal heir of the late Shri Atmaram Tukaram Karad against penalty orders for the assessment years 2017-18 and 2018-19, imposed under section 270A of the Income-tax Act, 1961, for misreporting of income. The penalties were contested on the grounds that they were issued in the name of the deceased, who had passed away before the initiation of the penalty proceedings. The Tribunal examined the legal validity of the penalty orders in light of similar cases adjudicated by the Bombay High Court and the Supreme Court, leading to the conclusion that the penalty orders were void ab initio.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137772 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 25-12-2022
• Other Referred Cases: Rupa Shyamsundar Dhumatkar Vs. ACIT and others, Pr. CIT Vs. Maruti Suzuki India Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘A’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.942 and 943/PUN/2022 नधा रण वष / Assessment Years : 2017-18 and 2018-19 Late Shri Atmaram Tukaram Karad Through Legal Heir Shri Sagar Atmaram Karad, Plot No.21, S.No.29/02/03, Kartikiya Nagar, ITI Ambad Link Road, Near Wavare Nagar, Kamatwade Shivar, Nashik 422009 Maharashtra PAN AFRPK2611M Vs. ITO, Ward-2(1), Nashik Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : These two appeals by the assessee relating to assessment years 2017-18 and 2018-19 are against the confirmation of penalty u/s.270A of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). Since a common is raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience. Assessee by Shri D.N. Parakh & Shri Bhushan V. Daga Revenue by Shri Ramnath P. Murkunde Date of hearing 07-02-2023 Date of pronouncement 07-02-2023 ITA Nos.942 and 943/PUN/2022 Late Shri Atmaram Tukaram Karad 2 2. Briefly stated, the facts of the case are that the assessee is an individual who derived income from salary. Returns were filed for both the years. The reassessment was initiated by means of notice u/s.148 for misreporting of income in respect of both the years. The reassessments were completed. Thereafter, the AO initiated penalty proceedings u/s 270A of the Act. The assessee was represented by way of legal representative, who filed written submissions, which fact has been recorded at para 5 of the penalty order. Eventually, the AO imposed penalty u/s.270A. The assessee assailed the order before the ld. CIT(A), who countenanced the view point of the AO affirming the penalty. Aggrieved thereby, the assessee has approached the Tribunal. 3. We have heard the rival submissions and gone through the relevant material on record. It is seen that the penalty was initiated for both the years with reference to the income declared by the assessee in the returns filed pursuant to notices u/s.148. Here is a case in which the assessee passed away before the initiation of penalty. The legal representative, in such capacity, filed written submissions as has been categorically recorded in the penalty order itself. Still the AO passed the penalty order for both the years in the name of the deceased. In view of the above facts, ITA Nos.942 and 943/PUN/2022 Late Shri Atmaram Tukaram Karad 3 it is vivid that the penalty orders, having been passed in the name of deceased, are void ab intio. The Hon’ble Bombay High Court in Rupa Shyamsundar Dhumatkar Vs. ACIT and others in writ Petition No.404 of 2009, vide its judgment dated 05-04-2019 considered a similar situation in which the assessee had died and the notice was issued in the name of Late Shyam Sundar Dhumatkar with the Legal Heir as his widow. The Hon’ble Bombay High Court declared such reopening of the assessment as invalid in law. The Hon’ble Supreme Court in Pr. CIT Vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC) has dealt with a similar situation in which notice was issued in the name of an amalgamating company. It was held that after amalgamation, the amalgamating company ceased to exist and thus the notice issued was rendered void ab-initio. Their Lordships further held that participation in the proceedings by the assessee cannot operate as estoppel against law. It is manifest that the facts and circumstances of the instant appeals are mutatis mutandis similar to those as considered by the Hon’ble Supreme Court and the Hon’ble Bombay High court in the aforenoted cases. Respectfully following precedents, it is held that the penalty orders passed by ITA Nos.942 and 943/PUN/2022 Late Shri Atmaram Tukaram Karad 4 the AO in the name of the deceased, are void. The consequential impugned orders upholding the penalty are also set-aside. 4. In view of our decision holding the impugned orders as bad in law, there is no need to dispose off the grounds on merits. 5. In the result, both the appeals are allowed in above terms. Order pronounced in the Open Court on 07 th February, 2023. Sd/- Sd/- ( S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 07 th February, 2023 सतीश आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. DR, ITAT, ‘A’ Bench, Pune 4. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA Nos.942 and 943/PUN/2022 Late Shri Atmaram Tukaram Karad 5 Date 1. Draft dictated on 07-02-2023 Sr.PS 2. Draft placed before author 07-02-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *