Smt. Dadamben Otaji Babraji Prajapati, Ahmedabad V. The Dy.CIT.,Cent.Circle-2(3), Ahmedabad

ITSSA 476/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0778 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 26-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: SAREMAL P SHA H
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER I T (SS) A NO S.476, 477, 478, 479/ AHD/ 2011 A. Y S .200 2 - 03 TO 200 5 - 06 DADAMBEN OTAJI BABRAJI PRAJAPATI, LEGAL HEIRS OF LATE SHRI OTAJI B. PRAJAPATI, 36, S.P> MARKET OUTSIDE JAMALPUR GATE, AHMEDABAD. PAN: AEJPP 0214N VS DY. CIT, CENTRAL CIRCLE - 2(3) (APPELLANT) (RESPONDENT) REVENUE BY : S HRI DINESH SINGH , SR. D.R. , ASSESSEE(S) BY : SHRI SAREMAL P. SHA H, A.R. / DATE OF HEARING : 16 / 0 6 /201 5 / DATE OF PRONOUNCEMENT: / 0 6 /201 5 / O R D E R PER SHRI S.S. GODARA , JUDICIAL MEMBER TH ESE ASSESSEE S APPEAL S FOR A.Y. 200 2 - 0 3 TO 2005 - 06 , ARISE FROM A COMMON ORDER OF C I T(A) - III , AHMEDABAD DATED 27.4.2011 , PASSED I N CASE NO S .CIT(A) - III/20,21,22 & 23/DCIT/CC - 2(3)/10 - 11 , CONFIRMING PENALTIES OF RS.47,968/ - , RS.73,955/ - , RS.65,866/ - AND RS.80,844/ - , IN PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT , 1961, IN SHORT THE ACT . IT (SS) A NO S . 476, 477, 478 AND 479 /AHD/20 1 1 DADAMBEN OTAJI B. PRAJAPATI FOR A.Y. 2002 - 03 TO 200 5 - 0 6 - 2 - 2. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE APPELLANT SMT. DADAMBEN OTHAJI BHABHRAJI PRAJAPATI IS WIDOW/LEGAL REPRESENTATIVE OF THE DECEASED ASSESSEE SRI OTHAJI BHABRAJI PRAJAPATI WHO EXPIRE D ON 8.12.2007. DEATH CERTIFICATE FORMS PART OF RECORD. THE DEPARTMENT CONDUCTED SEARCH IN THE DECEASED ASSESSEE S CASE ON 30.8.2007. THIS WAS FOLLOWED BY THE ASSESSEE S DEATH. THEREAFTER, A SECTION 153A NOTICE DATED 11.2.2008 STOOD ISSUED. THE ASSESSEE S LEGAL REPRESENTATIVE FILE D RETURNS ON 21.5.2008. THE ASSESSING OFFICER FRAMED REGULAR ASSESSMENTS ON 28.9.2009 MAKING GROSS PROFITS ADDITIONS @10% AMOUNTS OF RS.1,56,759/ - , RS.2,34,778/ - , RS.2,19,553/ - AND RS.2,64,374/ - RESPECTIVELY ON AGRICULTURAL MARKETI NG COMMISSION . THE PARTIES INFORM US THAT NO APPEAL WAS PREFERRED AGAINST THE SAID ADDITIONS. THE ASSESSING OFFICER VIEWED THESE ADDITIONS AS CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AT THE ASSESSEE S BEHEST, INITIATED SECTION 271(1)( C) PROCEEDINGS AND IMPOSED IMPUGNED PENALTIES OF RS.47,968/ - , RS.73,955/ - , RS.65,866/ - AND RS.80,844/ - ; RESPECTIVELY. 3. THE CIT(A) HAS AFFIRMED THE ASSESSING OFFICER S ACTION. 4. WE HAVE HEARD BOTH SIDES AND PERUSED THE CASE FILE S . RELEVANT FACTS STA ND NARRATED IN THE PRECEDING PARAGRAPHS. IT HAS IT (SS) A NO S . 476, 477, 478 AND 479 /AHD/20 1 1 DADAMBEN OTAJI B. PRAJAPATI FOR A.Y. 2002 - 03 TO 200 5 - 0 6 - 3 - COME ON RECORD THAT THE ASSESSEE EXPIRED WELL BEFORE ISSUANCE OF SECTION 153A NOTICE (SUPRA) . THE APPELLANT IS WIDOW/LEGAL REPRESENTATIVE OF THE DECEASED - ASSESSEE. THE AUTHORITIES BELOW HAVE IMPOSED THE IMPUG NED PENALTIES ON HER. WE FIND THAT SECTION 159 OF THE ACT PRESCRIBES LIABILITY OF AN ASSESSEE S LEGAL REPRESENTATIVES AS UNDER: 159. (1) WHERE A PERSON DIES, HIS LEGAL REPRESENTATIVE SHALL BE LIABLE TO PAY ANY SUM WHICH THE DECEASED WOULD HAVE BEEN LIABL E TO PAY IF HE HAD NOT DIED, IN THE LIKE MANNER AND TO THE SAME EXTENT AS THE DECEASED. (2) FOR THE PURPOSE OF MAKING AN ASSESSMENT (INCLUDING AN ASSESSMENT, REASSESS MENT OR RECOMPUTATION UNDER SECTION 147) OF THE INCOME OF THE DECEASED AND FOR THE PURPOS E OF LEVYING ANY SUM IN THE HANDS OF THE LEGAL REPRESENTATIVE IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTION (1), (A) ANY PROCEEDING TAKEN AGAINST THE DECEASED BEFORE HIS DEATH SHALL BE DEEMED TO HAVE BEEN TAKEN AGAINST THE LEGAL REPRESENTATIVE AND MAY, BE CONTINUED AGAINST THE LEGAL REPRESENTATIVE FROM THE STAGE AT WHICH IT STOOD ON THE DATE OF THE DEATH OF THE DECEASED; (B) ANY PROCEEDING WHICH COULD HAVE BEEN TAKEN AGAINST THE DECEASED IT HE HAD SURVIVED, MAY BE TAKEN AGAINST THE LEGAL REPRESENTATIVE; AND (C) ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. (3) THE LEGAL REPRESENTATIVE OF THE DECEASED SHALL, FOR THE PURPOSES OF THIS ACT, BE DEEMED TO BE AN ASSESSEE. (4) EVERY LEGAL REPRESENTATIVE SHALL BE PERSONALLY LIABLE FOR ANY TAX PAYABLE BY HIM IN HIS CAPACITY AS LEGAL REPRESENTATIVE IF, WHILE HIS LIABILITY FOR TAX REMAINS UNDISCHARGED, HE CREATES A CHARGE ON OR DISPOSES OF OR PARTS WITH ANY ASSET S OF THE ESTATE OF THE DECEASED, WHICH ARE IN, OR MAY COME INTO, HIS POSSESSION, BU T SUCH LIABIL ITY SHALL BE LIMITED TO THE VALUE OF THE ASSET SO CHARGED, DISPOSED OF OR PARTED WITH. (5) THE PROVISIONS OF SUB - SECTION (2) OF SECTION 161, SECTION 162, AND SECTION 167 SHALL, SO FAR AS MAY BE AND TO THE EXTENT TO WHICH THEY ARE NOT INCONSISTENT WITH THE PROVISIONS OF THIS SECTION, APPLY IN RELATION TO A LEGAL REPRESENTATIVE. (6) THE LIABILITY OF A LEGAL REPRESENTATIVE UNDER THIS SECTION SHALL, SUBJECT TO THE PROVISIONS OF SUB - SECTION (4) AND SUB - SECTION (5), BE LIMITED TO THE EXTENT TO WHICH THE ESTATE IS CAPABLE OF MEETING THE LIABILITY. IT (SS) A NO S . 476, 477, 478 AND 479 /AHD/20 1 1 DADAMBEN OTAJI B. PRAJAPATI FOR A.Y. 2002 - 03 TO 200 5 - 0 6 - 4 - A PERUSAL OF THE ABOVESAID STATUTORY PROVISION MAKES IT CLEAR THAT A PENALTY IMPOSED UNDER THE ACT NOWHERE MADE LIABILITY OF A LEGAL REPRESENTATIVE. THE LEGISLATURE HAS ALREADY CATEGORIZED SECTION 159 IN THE ARRAY OF S PECIAL CASES. T HE SAME IS LIABLE TO BE STRICTLY INTERPRETED. WE OBSERVE IN THESE FACTS AND BACKGROUND OF THE CASE THAT THE LEGISLATURE ITSELF HAS NOT INCLUDED A PENALTY AS A LEGAL REPRESENTATIVE S LIABILITY WHEN AN ASSESSEE DIE S WELL BEFORE FRAMING O F AN ASSESSMENT IN QUESTION. WE ALSO DEEM IT PROPER TO OBSERVE THAT SECTION 271(1)(C) IS A PENAL PROVISION WHICH CANNOT BE EQUATED WITH A DEMAND ARISING FROM AN ASSESSMENT FRAMED. THE REVENUE FAILS TO REFER TO ANY STATUTORY PROVISION IN THIS REGARD. WE DRA W SUPPORT FROM HON BLE JURISDICTIONAL HIGH COUR T S DECIS ION IN ACIT VS. LATE SHRIMANT F . P . GAEKWAD (2009) 313 ITR 192 (GUJ.) HOLDING ON SIMILAR LINES UNDER THE WEALTH TAX LAW. THEREFORE, WE DELETE THE IMPUGNED PENALTIES IMPOSED ON THE DECEASED ASSESSEE S L EGAL REPRESENTATIVE. COMING TO MERITS AS WELL, THE CASE FILES REVEAL THAT THE PRESENT IS A CASE OF PENALTIES ARISING FROM ESTIMATED GROSS PROFITS ADDITIONS (SUPRA) NOT BASED ON ANY CONCRETE EVIDENCE. THUS, WE OBSERVE THAT A CASE OF ESTIMATED GROSS PROFI TS ADDITIONS DOES NOT LEAD TO CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS SO IT (SS) A NO S . 476, 477, 478 AND 479 /AHD/20 1 1 DADAMBEN OTAJI B. PRAJAPATI FOR A.Y. 2002 - 03 TO 200 5 - 0 6 - 5 - AS TO ATTRACT SECTION 271(1)(C) PENALTY. W E AGREE WITH THE APPELLANT ON MERITS AS WELL. 5. THE ASSESSEE S APPEAL S ITA NOS. 476, 477, 478, 479/AHD/2011 A RE ALLOWED. 4. W ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 19 TH J UNE , 201 5 AT AHMEDABAD. SD/ - SD/ - ( N.S. SAINI ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19 / 0 6 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD