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Facts
The assessee filed an appeal against a penalty order for AY 2015-16. The counsel for the assessee raised a preliminary issue, arguing that the penalty order under Section 271(1)(c) was passed on a deceased individual, who had died on 22nd December 2020, prior to both the assessment and penalty orders.
Held
The Tribunal held that a penalty order passed on a dead person without the impleadment of legal heirs does not legally survive. Consequently, the penalty order issued by the Assessing Officer was quashed.
Key Issues
Whether a penalty order passed under Section 271(1)(c) of the Income Tax Act on a deceased person, without impleading legal heirs, is valid.
Sections Cited
Section 271(1)(c)
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI MAHAVIR SINGH SHRI MAHAVIR SINGH, , , , VICE SHRI MAHAVIR SINGH & SHRI NAVEEN CHANDRA, ACCOUNTANT SHRI NAVEEN CHANDRA SHRI NAVEEN CHANDRA
This appeal by the assessee is arising out of the order of learned Commissioner of Income-tax (Appeals)-30, New Delhi dated 31st October, 2022 for the assessment year 2015-16.
At the outset, learned counsel for the assessee raised a preliminary issue that the penalty order is passed on a dead person. He drew our attention to the assessment order which is passed on the legal heir and referred to clause (1) and (2) of the order of the Assessing Officer mentioned at page 1, which read as under :-
“1. Name of the Assessee : Smt. Jasbir Kaur (Legal heir of Lt. Sh. Harbhajan Singh Chadha) 2. Address of the Assessee : 455, Civil Lines, Moradabad Uttar Pradesh – 244001.”
Learned Counsel stated that this order is dated 1st March, 2021. He 3. stated that the penalty order under Section 271(1)(c) of the Act was passed by the Assessing Officer on dead person i.e., in the name of the assessee and relevant preface of page 1 reads as under :-
PAN ACKPC9645F 2. Name of the assessee HARBHAJAN SINGH CHADHA 3. Address of the assessee 455, Civil Lines, Pili Kothi Civil Lines, Moradabad 244001, Uttar Pradesh, India 4. Assessment year 2015-16 5. Status Individual 6. Amount of Penalty Rs.2085093 7. Date of Order 27/08/2021 8. DIN ITBA/PNL/F/271(1)(c)/2021- 22/1035155019(1)
Learned Counsel stated that once the penalty order is passed on a dead person, it has no locus standi and has to be declared null and void. He stated that the assessee died on 22nd December, 2020, which is much before the passing of the assessment order as well as penalty order. Hence, this penalty order will not survive and has to be quashed.
On query from the Bench, learned CIT-DR could not controvert the said position and did not make any argument.
After going through the facts of the case, we are of the view that the penalty order passed under Section 271(1)(c) of the Act by the Assessing Officer is clearly on a dead person. No order will survive if passed on a dead person without impleading legal heirs. Hence, this penalty order will not survive and accordingly, we quash the same.
In the result, the appeal of the assessee is allowed. Above decision was pronounced in the open Court on 25th November, 2024.