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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
These two appeals, by the assessee, one against quantum proceedings u/s 143(3) and another against penalty proceedings u/s 271(1)(c), are directed against the order of Ld. Commissioner of Income-tax (Appeals)-I, Kanpur [hereinafter referred as to “Ld. CIT(A)”] dated 25.10.2016, pertaining to the assessment year 2013-14. For the sake of convenience, these two appeals are hereby disposed of through this consolidated order. The assessee has raised following grounds of appeal: - “1. Because the CIT(A) has erred in not appreciating the facts and circumstances of the case and has arbitrarily held, that the assessee is not entitled for deduction under section 8OHHC of the I.T. Act, 1961.
2. Because the CIT(A) has erred in law in not issuing the summons under section 133(6)/131 of the Act to the bank authorities as prayed by the assessee to verify the realization of sale proceeds of the exports made, on & 64/LKW/2017 Page 2 of 5 the basis of which the deduction was claimed under section 80HHC, the order passed by the CIT(A) is bad in law and be quashed.
3. Because the assessee having exported the goods, the sale realization being delayed, the petition made to the bank for extending the time, not in dispute, the CIT(A) should ought to have accepted the claim of the assessee and allowed deduction as claimed under section 8OHHC.
4. Because the claim under section 80HHC having been made in accordance with the Auditors Report as mandated for the said purpose filed alongwith the return of income, the authorities below were not justified in denying the assessee deduction under section BOHHC of the Act, as claimed by the assessee.”
1. Because the CIT(A) has erred on facts and in law in upholding the levy of penalty of Rs.8,80,000/- under section 271(1)(c) of the IT. Act, 1961, which penalty is bad in law and be deleted.
2. Because there being neither any concealment of particulars of income, nor furnishing of inaccurate particulars of income, the CIT(A) has erred on facts and in law in holding the assessee to be in default in violation of section 271(1)(c), the penalty imposed is bad in law and be deleted.
Because on a proper consideration of facts and circumstances of the case, there being no specific item of concealment having been mentioned, the penalty imposed is bad in law and be deleted.
4. Because the entire variation in the income returned and income assessed is on account of disallowance of the claim made under section 8OHHC and that being a legal claim, the provisions of section 271(1)(c) are not attracted, the penalty imposed be deleted.
5. Because on a proper consideration of facts and circumstances of the case, it would be found that there is no furnishing of inaccurate particulars of income, the Explanation 1 to section 271(1)(c) is not applicable, the penalty of Rs.8,80,000/- imposed under section 271(1)(c) be deleted.
6. Because in any case and in all circumstances of the case, the penalty imposed and the order passed is without jurisdiction, bad in law and be quashed.”
The above appeals have been filed in the name of Shri Abdul Hameed Chikwa on 23.01.2017. It is transpired from the records that the Ld. Counsel for the assessee vide his letter dated 17.01.2018, intimated this Tribunal about the death of assessee (Shri Abdul Hameed Chikwa) in December, 2017. Thereafter, there has been multiple requests for adjournment for bringing the legal heir(s) on record but till date the legal heir(s) have not been brought on record and Form No. 36 has not been amended & 64/LKW/2017 Page 3 of 5 as contemplated under Rule 26 of Income Tax Rules, 1963 (hereinafter referred as to “Rules”). During the course of hearing, the Ld. Counsel for the assessee expressed his inability to prosecute the present appeals through legal heir(s) as legal heir(s) could not be contacted. It is also stated that son/legal heir(s) namely Shri Irshad Alam is in police custody. Under these circumstances, he contended that this Tribunal may take appropriate decision.
3. On the other hand, the Ld. Departmental Representative submitted that the legal heir(s) was required to be brought on record and make necessary modification in Form no. 36 as per Rule 26 of the Income Tax (Appellate Tribunal) Rules, 1963. Therefore, he prayed that these appeals may be dismissed.
We have heard the rival submissions and perused the material available on record. We find that appeal was filed in the year 2017, the assessee had expired in December, 2017 since then no action has been taken. Moreover, the Ld. Counsel has expressed his inability to do the needful. He prayed for withdrawal of his power of attorney. Under these facts, it is inferred that the legal heir(s) of the assessee are not interested in prosecuting the present appeals. The Co-ordinate Bench of this Tribunal in the case of Shri Jivraj V. Desai Vs. The DCIT Central Circle-2(1) in vide order dated 26.05.2023 has dismissed the appeal, by observing as under: -
“3. We have noted the contention made by the learned Counsel for the assessee. He has in a very clear terms expressed his inability to implead the legal-heirs of the deceased-assessee in the present case in terms of Rule 26 of ITAT Rules and Order 22 of Code of Civil Procedure for continuation of the appellate proceedings before us. 4. Rule 26 of the ITAT Rules prescribes the following procedures to be followed where one of the parties to the appeal is deceased:-
26. Where an assessee whether he be an appellant or the respondent to an appeal dies or is adjudicated insolvent or in the case of a company being wound up, the appeal shall not abate and may, if the assessee was the appellant, be continued by, and if he was the respondent be continued against, the executor, administrator or other legal representative of the assessee or by or against the assignee, receiver or liquidator, as the case may be: Provided that: (i) The assessee files a revised Form No. 36 duly filled up giving revised name of the party duly verified in the same manner as required by rule 47 of Income Tax Rules, 1962; (ii) The revised Form No. 36 shall specify the appeal number as originally assigned or, in the event of non-availability of such number on the date of filing the appeal shall be mentioned in the covering letter to enable the Registrar to place fresh Form No. 36 in the original file.] 5. Order 22, Rule 1 & 3, of the Code of Civil Procedure states as under:- “1. No abatement by party’s death, if right to sue survives.- The death of a plaintiff or defendant shall not cause the suit to abate if the right to sue survives. HIGH COURT AMENDMENT Allahabad. - At the end of the rule add the words: “or to proceedings in the original Court taken after the passing of the preliminary decree where a final decree also requires to be passed having regard to the nature 01 the suit.
“3. Procedure in case of death of one of several plaintiffs or of sole plaintiff.- (1) Where one of two or more plaintiffs dies and the right to sue does not survive to the surviving plaintiff or plaintiffs alone, or a sole plaintiff or sole surviving plaintiff dies and the right to sue survives, the court, on an application made in that behalf, shall cause the legal representative of the deceased plaintiff to be made a party and shall proceed with the suit. (2) Where within the time limited by law no application is made under sub- rule (1), the suit shall abate so far as the deceased plaintiff is concerned, and, the court may award to him the costs which he may have incurred in defending the suit, to be recovered from the estate of the deceased plaintiff.”
6. As is evident from the above, for the continuation of a lis on the death of an appellant/respondent, the legal representative/heir of the deceased is to be made party to the suit. In the present case, as per the admission of the authorized representative before us, he is unable to implead any legal heir of the deceased assessee. In view of the same the appeal cannot be continued to be heard with and is therefore dismissed.”
We are conscious to the facts that upon the death of assessee (Shri Abdul Hameed Chikwa), the appeal could not abated and appeal can be continued. However, as per proviso to Rule 26 of the Rules, the appeal would be continued if the revised Form no. 36 duly filled up by giving revised name of the party duly verified in the same manner as required by Rule 47 of & 64/LKW/2017 Page 5 of 5 Income Tax (Appellate Tribunal) Rules, 1962 is filed. No such action has been taken at the end of the tax-payers. We are, therefore, left with no option but to dismiss these appeals. However, a liberty is given to the legal heir(s) for restoration of these appeals if as per law.
In the result, both the appeals in & 64/LKW/2017 are dismissed.
Order pronounced in the open Court on 12/02/2025.