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Facts
Three appeals were filed by the assessee concerning quantum proceedings and penalty proceedings. The assessee had expired, and despite efforts, the legal heirs did not come forward to prosecute the appeals.
Held
The Tribunal noted that the legal heirs had not been substituted in place of the deceased assessee as required by the rules. Due to the absence of prosecution and the non-compliance with procedural requirements, the Tribunal dismissed the appeals.
Key Issues
Whether the appeals can be prosecuted by legal heirs when they have not been substituted and the prosecution is not being pursued, and if procedural non-compliance warrants dismissal.
Sections Cited
271(1)(c), 271(b), 68, 274, 44AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
These three appeals by the assessee, one against quantum proceedings and another two against penalty proceedings u/s 271(1)(c) and 271(b) of Income Tax Act, 1961 (hereinafter referred as to “Act”) dated 29.08.2017 and 20.06.2023 respectively, pertaining to the assessment year 2013-14. For the sake of convenience, these appeals are hereby disposed of through this consolidated order. The assessee has raised following grounds of appeal: - & 258/LKW/2023 Page 2 of 4
1. That the Ld. CIT(A) has erred in confirming the disallowance on account of business loss of Rs.72,99,895/-.
2. That the Ld. CIT(A) has erred in confirming the addition on account of unsecured loans of Rs.42,77,500/- u/s 68 of the IT Act, 1961.
3. That the Ld. CIT(A) has erred in confirming the disallowance on account of interest of Rs.12,08,351/-.
4. That even though not agreed with the disallowance on account of interest but without prejudice the Ld. AO has erred in disallowing the whole interest paid instead of difference in receipt and payment of interest.
5. That the Ld. CIT(A) has erred in passing the appellant order without providing any opportunity to the appellant to file his reply on the remand report on the basis of which order has been passed.
6. That the Ld. CIT(A) has erred in not providing proper and adequate opportunity to the appellant.”
1. That ld. cit(a) has erred in not allowing the opportunity to te appellant to file reason for delay in filing of appeal even though at the time of filing of appeal in form 35 at sl. no. 15 it was mentioned that the condonation for delay shall be filed at this time of hearing of appeal.
2. That the order of ld. cit(a) is in gross violation of principal of natural justice.
3. That the notice issued u/s. 274 r.w.s 271(1)(c) of the IT. Act, 1961 is defective and without jurisdiction as being issued without specific limb.
4. Because of facts and in the circumstances of the case and in law, the learned assessing officer has erred in levying a penalty u/s 271(1)(c) of the income tax act, 1961 without recording any satisfaction regarding furnishing of inaccurate particulars of income or concealment of income.
5. Because on the facts and in the circumstances of the case, the ld.ao has erred in law and on facts in recording a vague and general satisfaction in the assessment order which is not maintainable in the eyes of law. 6. because of the facts and in the circumstances of the case, the ld.ao has erred in law and on facts in imposing penalty of Rs 12,90,000/- under section 271(1)(c) of the act 7. Because of the facts and in the circumstances of the case, the ld.ao has erred in law and on facts in imposing penalty as the addition prescribed u/s 68 of the act is a legal fiction and the same need not necessarily as a result of concealment of particulars of income raising suspicions about the credit worthiness of the parties is based on pure assumptions without bringing anything adverse on record with any material to justify such suspicions and assumptions.
& 258/LKW/2023 Page 3 of 4 8. Because on the facts and in the circumstances of the case, the ld.ao has erred in law and on facts in not appreciating the fact that what may be a good case for making addition for the purpose of assessment, may not necessarily be a fit case for imposing penalty as each and every addition does not automatically result from concealment of income.
That the appellant craves leave to add, delete or modify any grounds with your honours kind permission.”
1. That ld. cit(a) has erred in not allowing the opportunity to the appellant to file reason for delay in filing of appeal even though at the time of filing of appeal in form 35 at sl. no. 15 it was mentioned that the condonation for delay shall be filed at the time of hearing of appeal.
2. That the order of ld. CIT(A) is in gross violation of principal of natural justice.
3. That the learned assessing officer erred in levying penalty u/s 271b of the income tax act, 1961.
4. That the tax audit report of the relevant year was already filed with the assessing officer in the form of e-filing as well as during the course of assessment proceeding.
That the learned assessing officer has erred in not considering the facts that no penalty u/s 271b where assessee under bona-fide belief and reasonable cause failed to get accounts audited u/s 44ab within the prescribed time limit 6. That the learned assessing officer has levied the penalty under section 2718 of the act arbitrarily and unlawfully 7. That the appellant craves leave to add, delete or modify any grounds with your honours kind permission.”
At the time of hearing, Ld. Counsel for the Assessee requested for withdrawal of his ‘Vakalatnama’. He further contended that the assessee in this case had expired on 27.07.2024, the death certificate issued by Department of Medical and Health, Government of Uttar Pradesh of Hari Parvat Zone Nagar Nigam, Agra. He contended that despite his best efforts no instruction has been received from the legal heir(s) for prosecuting the present appeals. Ld. DR supported the impugned orders.
We have heard the Ld. Counsel for the assessee and perused the material available on record. As per Rule 26 of & 258/LKW/2023 Page 4 of 4 Income Tax (Appellate Tribunal) Rules, 1963 (hereinafter referred as to “Rules”). It is mandatory as per proviso to the aforesaid Rules that Form no. 36 is required to be modified and legal heir(s) to be substituted in place of the deceased assessee. In this case, no such action has been done. It is also brought to our notice that the legal heir(s) are not coming forward despite best efforts by the Ld. Counsel. 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, these appeals in and ITA. No. 258/LKW/2023 are dismissed.
Order pronounced in the open Court on 12/02/2025.