LATE JAYANT MANEKLAL WAGLE (L/H RAJLAXMI D PARULKAR),PUNE vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, PUNE, PUNE

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ITA 1018/PUN/2023Status: DisposedITAT Pune03 November 2023AY 2005-063 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that penalty proceedings under Section 271(1)(c) cannot be initiated against the legal representatives of a deceased assessee. This decision was based on the precedent set by the Madras High Court in CIT vs. Gowri, upheld by the Supreme Court.

What were the facts?

The appeal concerns penalty proceedings initiated under Section 271(1)(c) of the Income Tax Act for the assessment year 2005-2006. The penalty order was passed after the assessee's demise, and the legal representatives argued against its validity.

What were the issues?

Whether penalty proceedings under Section 271(1)(c) can be continued against the legal representatives of a deceased assessee. The liability of legal representatives for penalties after the assessee's death under Section 159 of the Act.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 159

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, PUNE BENCHES “A” : PUNE

Before: SHRI SATBEER SINGH GODARA & SHRI GD PADMAHSHALI

Hearing: 02.11.2023Pronounced: 03.11.2023

ORDER PER SATBEER SINGH GODARA, J.M. :

This assessee’s appeal for assessment year 2005- 2006, arises against the National Faceless Appeal Centre [in short “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/ 250/2023-24/1054836440(1), dated 03.08.2023, involving proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties at length. Case file perused.

2 ITA.No.1018/PUN/2023

2.

It emerges at the outset that there arises the first and foremost preliminary issue in the instant case file regarding correctness of sec.27191)(c) penalty proceedings itself initiated after the assessee’s demise. This is for the precise reason that the assessee Shri Jayant Maneklal Wagle had left for his heavenly abode on 19.11.2007 followed inter alia by the Assessing Officer’s quantum assessment dated 30.12.2008; the CIT(A)'s first round lower appellate order dated 28.02.2014; sec.271(1)(c) penalty order dated 30.03.2016; this tribunal’s order in ITA.No.1521/PUN./2014 dated 14.11.2018 and NFAC’s impugned order before us dated 03.08.2023.

3.

The Revenue vehemently argues before us that the impugned penalty proceedings are very much akin to an assessment giving rise to recovery of tax demands and therefore, the assessee’s legal representatives are liable for the corresponding default u/sec.271(1)(c) in light of sec.159(1) to (6) of the Act.

4.

We find that the instant issue is no more res integra in light of [2019] 417 ITR 45 (Madras) CIT vs. Gowri decided against the department, as upheld in SLP (Civil) No.26378/2019 dated 23.08.2019 before the hon’ble apex

3 ITA.No.1018/PUN/2023 court. Their lordships hold in very clear terms that an assessee’s legal representatives are not liable in penalty proceedings after his/her demise in terms of sec.159 of the Act. We adopt the very reasoning herein as well to decline the Revenue’s arguments supporting the impugned penalty of Rs.24,07,354/- in question. Ordered accordingly.

All other pleadings on merits stand render academic.

5.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open Court on 03.11.2023.

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