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Income Tax Appellate Tribunal, DELHIBENCH ‘C’, NEW DELHI
Before: Sh. C. M. GargDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order of the ld. CIT(A)-17, New Delhi dated 03.08.2018.
2. Following grounds have been raised by the assessee:
“1. That the penalty order passed on 28.09.2016 u/s 271(1)(b) of the Act by the Assessing Officer against the deceased assessee as upheld by the Ld. CIT(A), are perverse to the provisions of law and to the facts of the case, as the assessee has already expired after his prolonged illness on 22.12.2015.
That the penalty order passed is further unconstitutional as against the law and to the facts of the case, because as per the provisions of law laid down u/s 271(1)(b) read with Section 2(31) of the Act,
2 Late Sh. Jitender Sapra the penalty cannot be imposed on any of the Legal Heir of the deceased appellant. 3. That the levy of penalty u/s 271(1)(b) of the Act was further unconstitutional because the Assessing Officer was not having any record for the receipt / service of any notices claimed to be issued to the deceased assessee Sh. Jitendra Sapra.
4. That the Assessing Officer failed to appreciate while imposing the penalty of Rs. 60000/- on the deceased assessee u/s 271(1)(b) of the Act, that because of the non-receipt/service of the relevant notice to the deceased, the case is covered u/s 273A of the Income Tax Act 1961, as the assessee has already expired on 22.12.2015.
That the penalty order passed u/s 271(1)(b) of the Act was further illegal because the same was levied without following the proper law and procedure laid down under the Act.
6. That the penalty order passed is further not tenable because the same is silent, for which particular date the appellant has failed to comply with the said notice, for which the consolidated penalty of Rs. 60000/- was levied.
That the Assessing Officer has further failed to appreciate that against the deceased person no penalty if any is leviable as covered u/s 159 to u/s 162 of the Income Tax Act 1961, as the Legal Heir shall only be liable to pay the due tax if any be appears to be payable by the deceased to the extent of assets inherited by them, after his/her death.”
3 Late Sh. Jitender Sapra 3. The assessee filed return of income on 06.09.2008 declaring an income of Rs.1,95,340/- which was processed u/s 143(1) of the Income Tax Act, 1961. The Assessing Officer has imposed a penalty of Rs. 60,000/- under section 271(1)(b) of Income Tax Act in this case. The AO pointed out in the penalty order that the assessee failed to comply with notices as mentioned below:
S.No Description of Date of Notice Date of hearing Remarks Notice 1. U/s 143(2) 04.08.2015 17.08.2015 AO filed POA on 12.08.2015 but failed to file any details on 17.08.2015 2. U/s 142(1) 26.08.2015 07.09.2015 No compliance was made 3. U/s 142(1) 15.10.2015 21.10.2015 No compliance was made 4. 29.10.2015 AR appeared and filed a letter seeking adjournment. On his request, case adjourned to 05.11.2015 5. Adjournment 05.11.2015 No compliance was made 6. U/s 142(1) 15.12.2015 21.12.2015 No compliance Way made 7. U/s 142(1) 29.12.2015 04.01.2016 AR attended and sought adjournment for 07.01.2016 8. U/s 142(1) Adjournment 07.01.2016 No compliance was made 9. U/s 142(1) 08.01.2016 15.01.2016 No compliance was made 10. U/s 142(1) 18.01.2016 27.01.2016 No compliance was made 11. U/s 142(1) 28.01.2016 04.02.2016 No compliance was made 12 01.02.2016 AR attended and filed Death Certificate with POA of L/H 13. U/s 142(1) 08.02.2016 15.02.2016 AR filed a letter seeking adjournment and case is adjourned to 19.02.2016.
Adjournment 19.02.2016 No compliance was made
The Revenue argued that notices so issued by the Department were not complied by the assessee, Sh. Jitender Sapra or the Authorized Representative or by the legal heir Smt. Anjali Sapra on 29.12.2015 onwards. The ld. AR argued that the assessee could not reply to the notices as he remained hospitalized due to cancer and has expired on 22.12.2015.
4 Late Sh. Jitender Sapra 5. The provisions of Section 273B reads as under:
“Penalty not to be imposed in certain cases.
273B. Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, section 271FAB, section 271FB, section 271G, section 271GA, section 271GB, section 271H, section 271-I, section 271J, clause (c) or clause (d) of sub-section (1) or sub- section (2) of section 272A, sub-section (1) of section 272AA or section 272B or sub-section (1) or sub-section (1A) of section 272BB or sub- section (1) of section 272BBB or clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure.”
Section 273B does provide that the penalty is not to be imposed if the assessee has reasonable cause for non- compliance. Hence, in keeping in view, the provisions of Section 273B, we hold that the assessee had a reasonable cause for the said failure and hence no penalty shall be imposable.