PRASHANTKANTILAL SURANA,NASHIK V. ACIT CIRCLE 2, NASHIK

ITA 2668/PUN/2024

AI Insights

The case involves an appeal by Prashant Kantila Surana, the legal heir of Kantilal Surana, against a penalty order issued by the Assessing Officer under section 271AAB(1A) for the assessment year 2018-19. The penalty of Rs. 3,24,591 was levied following a survey under section 133A of the Income Tax Act, which allegedly uncovered undisclosed sales. The appellant contested the penalty on several grounds, including that it was issued in the name of a deceased person and lacked specific charges in the show cause notice. The Tribunal found procedural flaws in the issuance of the penalty, leading to the setting aside of the penalty order for re-adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396597 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHINAY KUMBHAR; SHRIO
• Assessee Lawyers: PRAMOD S SHINGTE
• Section: 133A

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2668/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year: 2018-19 Prashant Kantila Surana Legal Heir of Kantilal Surana, Shastri Nagar, Lasalgaon, Tal.Niphad, Dist.Nashik – 422306. Maharashtra. V s. The ACIT, Central Circle-2, Nashik. PAN: ACYPS1819F Appellant/ Assessee Respondent / Revenue Assessee by Shri Pramod S Shingte – AR Revenue by Shri Abhinay Kumbhar –CIT & Shrio Vinod Pawar – Addl.CIT(DR) Date of hearing 07/05/2025 Date of pronouncement 26/05/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the assessee is directed against the order of ld.Commissioner of Income Tax(Appeal), Pune-12 passed under section 250 of the Income Tax Act, 1961 for the A.Y.2018-19, dated 26.11.2024. The Assessee has raised the following grounds of appeal : ITA No.2668/PUN/2024 [A] 2 “1. The learned CIT(A) erred in rejecting the various grounds of appeal taken before him & dismissing the appeal of the appellant against the Penalty Order u/s 271AAB(1A), levying penalty of Rs. 3,24,591/ for AY 2018-19 & that too ignoring the submissions made & explanations given during the personal hearing. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24.591/- for AY 2018-19 u/s 271AAB(1A). 2. The learned CIT(A) erred in upholding the penalty order u/s 271AAB(1A) passed in the name of the dead person. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24,591/-for AY 2018-19 u/s 271AAB(1A). 3. The learned CIT(A) erred in upholding the penalty order u/s 271AAB(1A) with reference to the addition arising out of the survey action u/s 133A at the godown of the assessee. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24,591/- for AY 2018-19 u/s 271AAB(1A). 4. The learned CIT(A) erred in upholding the penalty u/s 271AAB(1A) that was initiated without specifying the specific charge against the assessee in the Show Cause Notice dt. 31.12.2019. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24,591/-for AY 2018-19 u/s 271AAB(1A). 5. The learned CIT(A) erred in upholding the penalty u/s 271AAB(1A) without appreciating the fact that the addition arising out of the alleged undisclosed sales is based on the estimation of assumption of such sales out of shortages, without there being any evidence of undisclosed sales. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24,591/-for AY 2018-19 u/s 271AAB(1A). ITA No.2668/PUN/2024 [A] 3 6. The learned CIT(A) erred in upholding the penalty u/s 271AAB(1A) by erroneously holding that the addition arising out of the alleged undisclosed sales stood covered by the definition of the 'undisclosed income' given in Clause (c) of Explanation below sec 271AAB. Therefore, it is prayed to cancel the penalty levied of Rs. 3,24,591/-for AY 2018-19 u/s 271AAB (1A). 7. The Appellant craves leave to add to, amend, delete, alter, vary, modify, substitute, cancel and/or rescind any of the aforesaid grounds, as and when necessary.” Submission of ld.AR : 2. Ld.AR for the Assessee filed a paper book. Ld.AR submitted that in this case, in the assessment order, addition has been made based on estimation, based on Stock taken during survey u/s.133A of the Act. Therefore, no penalty can be levied u/s.271AAB of the Act. 2.1 Ld.AR submitted that even otherwise, no penalty can be levied on the basis of estimated income. 2.2 Ld.AR further submitted that the penalty order is in the name of Kantilal Mangilal Surana dated 25.03.2022, whereas, Mr.Kantilal ITA No.2668/PUN/2024 [A] 4 Mangilal Surana died on 18.02.2022. Ld.AR filed copy of the Death Certificate of the Assessee i.e.Mr.Kantial Mangilal Surana. Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). Findings &Analysis : 4. We have heard both the parties and perused the material placed before us. In this case, Assessing Officer has passed an order u/s.271AAB of the Act, dated 25.03.2022 in the name of “KANTILAL MANGILAL SURANA” who died on 18.02.2022. No order can be passed in the name of Deceased Assessee. Assessing Officer should have brought on record the Legal Heir of the Assessee as in this case, the penalty proceedings were started vide Notice dated 31.12.2019, and assessee had filed reply on 09.01.2020 and 05.02.2021. The said replies were reproduced by the Assessing Officer in his order. Therefore, the penalty proceedings were initiated when assessee i.e.KANTILAL MANGILAL SURANA was alive and he had replied to the Notices. ITA No.2668/PUN/2024 [A] 5 Therefore, in this case, AO should have brought on record the Legal Heir of the Assessee and then should have passed the penalty order. 4.1 In these facts and circumstances of the case, we set-aside the penalty order to the Assessing Officer for denovo adjudication with a direction to bring on record the Legal Heirs of the Assessee. The Assessing Officer shall provide opportunity of hearing to the Legal Heirs of the Assessee. The Legal Heirs of the Assessee shall file necessary documents before the Assessing Officer. Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose. 4.2 We do not intend to comment on merits of the penalty order. 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 26 May, 2025. Sd/- Sd/- (VINAY BHAMORE) (DIPAK P.RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 26 May, 2025/ SGR ITA No.2668/PUN/2024 [A] 6 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "