LATE BHOODEV SINGH THROUGH L/H BIMLA DEVI (WIFE),GHAZIABAD vs. ITO WARD 68(8), DELHI

ITA 8284/DEL/2025Status: DisposedITAT Delhi28 September 2026AY 2012-135 pages
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What were the facts?

The assessee, Late Bhoodev Singh, is the appellant, represented by his legal heir Smt. Bimala Devi. The respondent is the Income Tax Department. The assessment year in question is 2012-13. The appeal challenges the penalty order dated 26-08-2021, passed under section 271(1)(c) of the Income Tax Act, 1961, which arose from an order of the National Faceless Appeal Centre (NFAC), Delhi. The original return was filed on 05-04-2014. A notice under section 148 was issued on 26-03-2019, leading to a revised return on 30-05-2019 declaring Rs. 20,31,810/-. The assessment was completed at this amount. A penalty of Rs. 4,50,000/- was levied, with the Assessing Officer holding that the assessee admitted to concealing particulars of income by disclosing additional income in response to the section 148 notice. The appeal before the CIT(A) was dismissed on 16-10-2025.

What did the Tribunal hold?

The Tribunal allowed Ground No. 1 of the appeal. It held that the assessee died during the penalty proceedings. The penalty order was passed on 26-08-2021, and notices were issued on 16-03-2021 and 17-05-2021, all in the name of the deceased assessee. The Tribunal, respectfully following the decision in Mangadu Natarajan Balasundharam v. The Income Tax Officer (Chennai), held that legal heirs are not liable for penalty proceedings after the assessee's demise, particularly when the assessment was completed in the assessee's name, but the penalty was levied against a dead person. The reasoning is that the proceedings were conducted against a deceased individual, making them invalid. The Tribunal did not decide on the other grounds raised by the assessee.

What were the issues?

1. Whether penalty proceedings initiated and penalty order passed in the name of the deceased assessee, who expired on 20-05-2020, are invalid, given that the penalty notice was issued on 16-03-2021 and 17-05-2021, and the penalty order was passed on 26-08-2021. (Question of law and fact, turning on Section 271(1)(c) and principles of natural justice). 2. Whether the first basic penalty notice dated 18-10-2019 was defective for not striking off inappropriate words and not specifying whether the penalty was for concealing particulars of income or furnishing inaccurate particulars. (Question of law, turning on Section 271(1)(c)). 3. Whether the NFAC erred in not accepting the assessee's first reply to the penalty notice dated 18-10-2019. (Question of law and fact). Assessee's Contentions: - The assessee expired on 20-05-2020, and subsequent penalty proceedings and orders were issued in his name, rendering them invalid. Legal heirs are not obligated to inform tax authorities of the assessee's death. Reliance on CIT v. S. Gowri (Madras High Court) and Smt. Rekha Agarwal v. DCIT (Del/Trib). - The penalty notice was defective as it did not specify the exact charge. - The NFAC wrongly rejected the assessee's initial reply. - The penalty order is illegal and liable for cancellation. Revenue's Contentions: - No information regarding the assessee's death was provided during penalty proceedings. - Legal representatives are liable to pay the penalty under Sections 159(1) to (6) of the Act.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 139,Section 148,Section 159

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, DELHI

Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL

For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 25/08/2026Pronounced: 28/09/2026

PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of the National Faceless appeal Centre (NFAC) Delhi [hereinafter referred to as (“Ld. NFAC”] vide order dated 16-10-2025 arising out the penalty order dated 26-08-2021 under section 271(1)(c) of the Income Tax Act 1961 (in short “the Act”) pertaining to A.Y. 2012-13. 2. The legal heir of the assessee has raised the following grounds in the appeal:

1.

That the learned officer of NFAC erred in law as well as on fact to issue penalty notice u/s 271(1)(c) dt.16-03-2021 and 17-05-2021 as well as framing th

The order continues below.

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