SHASHIKANT CHHOTUBHAI TANIA, L/H OF HEMENDRA SHASHIKANT TANIA,SURAT vs. INCOME TAX OFFICER, WARD 1(2)(4), SURAT, SURAT

Brief facts of the case are that no return of income was filed by the assessee for the A.Y. 2011-12. The case of assessee was reopened on the basis of information that the assessee made cash deposit of Rs. 10.04 lacs in his savings bank account with Karur Vysya Bank Ltd. In absence of return of income, the source of cash deposit remained unexplained in the hands of assessee. Thus, on the basis of such information, the assessment was reopened. During the assessment, the Assessing Officer noted that the assessee has not complied with the notice dated 02/07/2018 under Section 142(1) of the Income Tax Act, 1961 (in short, the Act) for fixing the date of hearing on 11/07/2018, the Assessing Officer levied penalty of Rs. 10,000/- by taking a view that the assessee failed to furnish any detail or submission in response to statutory notice. The Assessing Officer levied penalty of Rs. 10,000/- vide order dated 09/05/2019.

Aggrieved by the penalty, the legal heir of the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee submitted that the assessee expired on 13/1/2012. The case of deceased assessee was reopened by issuing notice under Section 148 of the Act dated 28.03.2018. The Assessing Officer issued first notice under Section 271(1)(b) dated 13/12/2018 fixing the date of hearing on 28/12/2018.

The ld. CIT(A) after considering the submission of assessee, held that the notice dated 02/07/2018 was not complied which proved that the appellant had malafide intention and deliberately not furnished the details. Due to non-furnishing of details, the assessment order was passed under Section 144 of the Act and the Assessing officer was justified in levying the penalty. Further aggrieved, the assessee has filed the present appeal before this Tribunal.

On merits of the penalty, the ld. AR of the assessee submits that the assessee expired on 13/1/2012 much before the issuance of notice under Section 147 of the Act. The legal heir of assessee attended the office of Assessing Officer and came to know that the case of assessee was reopened. The assessee requested the bank authority to furnish the delay of bank account. The bank authorities were not cooperating and legal heir of assessee further attended the office of Assessing Officer and requested for supply of copy of statement and fled return of income. The intention of legal heir of assessee was never to disobey the show cause notice. The assesse also responded to the penalty notice. Even in response to such notice, the legal heir attended but their attendance was not taken on record. Thus, there was reasonable cause explained by the legal heir of the assessee that no penalty is leviable in such circumstances. Before the ld. CIT(A), the assessee made detailed written submission but the same was not considered and order of penalty was Shashikant Chhotubhai Tania Vs ITO confirmed. The observation in the assessment order and the penalty order that non-furnishing of details or documents is not proper and justified.

On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the orders of the lower authorities.

I have considered the submissions of both the parties and perused the material available on record carefully. I find that the case of assessee was reopened under Section 147 of the Act. Notice under Section 148 dated 28/03/2018 was issued by the Assessing Officer. The Assessing Officer recorded that the notice was served upon the assessee. I find that the legal heir of the deceased assessee appeared before the Assessing Officer and requested for bank statement. On supplying of such statement, return of income was filed. I further noted that before the ld. CIT(A), the legal heir of assessee categorically pleaded that the assessee expired on 13/1/2012. I find that the order of penalty is passed against a dead person. The ld. CIT(A) instead of considering the fact that the penalty order was passed against a dead person, inserted the name of legal heir namely Hemendra Shashikant Tania. It is settled position under the law that the order in the name of a dead person is nullity. Therefore, considering the totality of facts and circumstances of the case, the order passed by the Assessing Officer in levying the penalty as well as Shashikant Chhotubhai Tania Vs ITO confirming the penalty by the ld. CIT(A) under Section 271(1)(b) is set aside/deleted.

In the result, this appeal of assessee is allowed.