DCIT, New Delhi V. Smt. Shrottam Jain, Delhi

ITSSA 10/DEL/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8389 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 02-08-2012
• Assessment Year: misc
• Appeal Filed On: 01-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: HIRAN MEHTA
• Keywords: Block assessment
• Section: 132

Judgement Text

I.T.(SS)A. NO. 10/DEL/2012 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.(SS)A. NO. 10/DEL/2012 BLOCK PERIOD 1.4.1988 - 24.9.1998 DCIT, CIRCLE-19(1), VS. SMT. SHROTTAM JAIN, NEW DELHI L/H OF LATE SH. ASHWANI KUMAR ROOM NO. 301-G, VIKAS BHAVAN, JAIN, B-16, SHAKT I NAGAR EXTENSION, I.P. ESTATE, DELHI NEW DELHI (PAN : AAIPJ 8255 E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. HIRAN MEHTA, CA DEPARTMENT BY : DR. B.R.R. KUMAR, SR. D.R. O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXII, NEW DEL HI DATED 18.11.2011 PERTAINING TO BLOCK PERIOD 1.4.1988 TO 24 .9.1998. 2. THE GROUNDS OF APPEAL READ AS UNDER:- I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DELETING THE ADDITION OF ` 4,71,956/- U/S. 158BFA(2) INSPITE OF THE FACT THAT THE ADDITIONS HAVE ALREAD Y BEEN CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (A). II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN I.T.(SS)A. NO. 10/DEL/2012 2 DELETING THE PENALTY IN VIEW OF THE DECISION OF HON BLE HIGH COURT IN THE CASE OF ACIT VS. LATE SH. SHRIMANT F.P. GAEKWAD (2009) 313 ITS 192 (GUJ.). III) THE APPELLANT CRAVES LAVE TO AMEND OR ALTER A LL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AND AMEND, ALTER OR ADD ANY OTHER GROUND OF APPEAL. 3. IN THIS CASE SEARCH U/S. 132 OF THE I.T. ACT WAS CARRIED OUT ON 24.9.1998. IN RESPONSE TO NOTICE U/S. 158BC RETUR N OF UNDISCLOSED INCOME SHOWING NIL UNDISCLOSED INCOME WAS FILED ON 29.11.1999. BLOCK ASSESSMENT ORDER WAS PASSED ON 28.9.2009 DET ERMINING TOTAL UNDISCLOSED INCOME AT ` 24,51,200/-. IN THE APPELL ATE PROCEEDINGS, THE INCOME WAS REDUCED AND ON THE BASIS OF ABOVE UND ISCLOSED INCOME, PENALTY U/S. 158BFA(2) OF ` 4,71,956/- WAS LEVIED BY THE ASSESSING OFFICER. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) ASSESSEE SUBMITTED THAT LEVY OF PENALTY IN THIS CASE IS NOT SUSTAINABLE AS IT IS LEVIED ON THE LEGAL HEIR OF THE DECEASED ASSESSEE. IT WAS SUBMITTED THAT SHRI ASHWANI KUMAR JAIN EXPIRED ON 20/4/2011. AFTER THE DEATH OF SHRI ASHWANI KUMAR JAIN PENALTY PROCEEDINGS WERE INI TIATED AND PENALTY U/S. 158BFA WAS LEVIED ON SMT. SHROTTAM JAIN, THE LEGAL HEIR OF THE DECEASED PERSON OF ` 4,71.956/-. LD. COMMISSION ER OF INCOME TAX (A) NOTED THAT IN THE CASE OF ACIT VS. F.P. GAEKWAD ( 2009) 313 ITR 192, THE HONBLE GUJRAT HIGH COURT HAS HELD AS UNDER:- HELD, DISMISSING THE APPEAL THAT NO PENALTY ORDER W AS PASSED DURING THE LIFE TIME OF THE DECEASED. TO MAK E THE LEGAL REPRESENTATIVE LIABLE FOR PENALTY U/S. 19(1) IT WAS NOT ENOUGH THAT THE PENALTY PROCEEDINGS SHOULD BE INI TIATED I.T.(SS)A. NO. 10/DEL/2012 3 DURING THE LIFE TIME OF THE DECEASED. IT WAS ALS O NECESSARY THAT SUCH PENALTY PROCEEDINGS MUST RESULT IN PENALTY ORDERS DURING HIS LIFE TIME. THEREFORE, NEITHER SECTION 19(1) NOR SECTION 19(3) CAST ANY OBLIGATION ON THE EXECUTOR, ADMINISTRATOR OR OTHER LEGAL REPRESENTATIVE TO PAY T HE AMOUNT OF PENALTY AS THEY WERE NOT LIABLE TO FACE AN Y SUCH PENALTY PROCEEDINGS FOR WHICH THEY HAD COMMITTED ANY DEFAULT. THE DEFAULT, IF ANY, WAS COMMITTED BY THE ASSESSEE AND THE ASSESSEE WAS NOT ALIVE WHEN THE PE NALTY PROCEEDINGS CULMINATED IN PENALTY ORDERS. 5. CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (A) OBSERVED THAT IN THE PRESENT CASE BLOCK RETURN OF INCOME WAS FILED BY THE DECEASED ASSESSEE ON 29.11.1999. ASSESSMENT U/S. 158BC WAS PASSED ON 28.9.2000 SHRI ASHWANI KUMAR JAIN, THE ASS ESSEE DIED ON 20.4.2001. WHEN THE LATE SHRI ASHWANI KUMAR JAIN DI ED, APPEAL OF THE DECEASED ASSESSEE WAS PENDING BEFORE LD. COMMISSIONE R OF INCOME TAX (A). THE APPEAL ORDER WAS RECEIVED ON 14.5.2008 AND UNDISCLOSED INCOME WAS REDUCED TO ` 7,86,593/- BY LD. COMMISSION ER OF INCOME TAX (A). THE ASSESSEE AS WELL AS DEPARTMENT PREFERR ED APPEAL BEFORE ITAT WHICH WERE DISMISSED BY THE ITAT. ON RECEIPT OF THE ITAT ORDER PENALTY NOTICE U/S. 158BFA(2) WAS ISSUED ON THE LEGA L HEIR SMT. SHROTTAM JAIN AND A PENALTY OF ` 4,71,956/- WAS LEVI ED ON HER ON 31.5.2010. IN VIEW OF THE AFORESAID ASSESSEE SUBMI TTED BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) THAT NO DEFAULT HAS B EEN COMMITTED BY THE LEGAL HEIR BY UNDERSTANDING AN INCOME IN THE RETURN OF INCOME. THE DEFAULT WAS COMMITTED BY THE DECEASED ASSESSEE A ND THE DECEASED ASSESSEE WAS NOT ALIVE WHEN THE PENALTY PR OCEEDINGS CULMINATED IN PENALTY ORDER. IN VIEW OF THE AFORESAI D, LD. COMMISSIONER I.T.(SS)A. NO. 10/DEL/2012 4 OF INCOME TAX (A) HELD THAT PENALTY ORDER PASSED BY THE ASSESSING OFFICER ON LEGAL HEIR OF THE DECEASED ASSESSEE WA S CANCELLED. 6. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE ME. 7. I HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF T HE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL O F THE ASSESSEE SUBMITTED THAT ITAT, DELHI G BENCH IN THE CASE O F SATINDER SINGH L/H OF LATE SH. HARI SINGH MALHIYAN IN I.T.A. NO. 3993/ DEL/2010 (A.Y. 2006- 07) VIDE ORDER DATED 27.10.2010 HAS FOLLOWED THE H ONBLE GUJRAT HIGH COURT DECISION IN THE CASE OF ACIT VS. LATE SH. SHR IMANT F.P. GAEKWAT (2009) 313 ITR 192. THE ITAT HAS NOTED THAT IN THE PRESENT CASE RETURN WAS FILED BY THE DECEASED ASSESSEE, NO DEFAU LT HAS BEEN COMMITTED BY THE LEGAL REPRESENTATIVE BY UNDERSTATIN G AN INCOME IN THE RETURN OF INCOME. THE DEFAULT WAS COMMITTED BY THE DECEASED ASSESSEE AND THE DECEASED ASSESSEE WAS NOT ALIVE WHEN THE PENALTY PROCEEDINGS CULMINATED IN THE PENALTY ORDER. THER EFORE, FOLLOWING THE AFORESAID DECISION, THE TRIBUNAL CANCELLED THE PENA LTY ORDER BY THE ASSESSING OFFICER ON LEGAL REPRESENTATIVE OF THE DECEASED ASSESSEE. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUS ED THE RECORDS. IN LIGHT OF THE AFORESAID PRECEDENTS, I AFFIRM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A), THAT PENALTY PROCEED INGS ON THE LEGAL HEIR OF THE DECEASED ASSESSEE IN THIS CASE ARE NOT SUSTAINABLE. I.T.(SS)A. NO. 10/DEL/2012 5 ACCORDINGLY, I AFFIRM THE ORDER OF THE LD. COMMISSIONE R OF INCOME TAX (A) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/8/2012. SD/- [SHAMIM YAHYA] ACCOUNTANT MEMBER DATE: 07/8/2012 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES