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Srikishan Agarwal Versus Deputy Commissioner of Income-Tax

2016 (6) TMI 799 - ITAT JAIPUR

Penalty u/s 271(1)(c) imposed on the legal heir - genuineness of purchase - assessee could not produce original evidences at the time of quantum proceedings but produced during the penalty proceedings - Held that:- It is undisputed fact that the assessee expired on November 22, 2010. In this case, the assessment was completed on December 17, 2008, and penalty was imposed on March 1, 2011. It means that after the death of the assessee. The assessee claimed the expenditure of ₹ 6,09,534 in t .....

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r and the name of the transporter has been given. The evidence placed for remaining expenses also perused and we find that the assessee could not produce these original evidences at the time of quantum proceedings but produced during the penalty proceedings before the learned Commissioner of Income-tax (Appeals) but he has not taken any cognizance. He simply treated them as non-genuine. The learned Commissioner of Income-tax (Appeals) has coterminous power with the Assessing Officer as penalty p .....

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ed in section 159(1) does not include the penalty proceedings on the legal representative under section 159(2) of the Act. Therefore, penalty imposed on the legal heir is not justified. - Decided in favour of assessee - I. T. A. No. 69/JP/2013 - Dated:- 6-5-2016 - T. R. Meena (Accountant Member) And Laliet Kumar (Judicial Member) For the Petitioner : Rajiv Sogani For the Respondent : Neena Jeph ORDER T. R. Meena (Accountant Member) 1. This is an appeal filed by the assessee against the order dat .....

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Income-tax (Appeals) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the penalty of ₹ 2,44,937 imposed under section 271(1)(c). 2. In the facts and in the circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) has erred in confirming the action of the learned Assessing Officer in imposing penalty under section 271(1)(c) of the Income-tax Act, 1961, amounting to ₹ 2,44,937 on a dead person. T .....

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rble at ₹ 6,09,534 and disallowance of expenditure at ₹ 61,018. The assessee challenged these additions before the honourable Income-tax Appellate Tribunal, which has been confirmed. The learned Assessing Officer initiated the penalty proceeding for concealment of true income and furnishing inaccurate particulars of such income. The learned Assessing Officer before imposing penalty, gave reasonable opportunity of being heard. The assessee filed reply vide letter dated February 18, 20 .....

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ound to the Assessing Officer for business purposes. The assessee could not produce any evidence for claiming this expenditure. Spot inquiry got conducted through the Inspector level that no such work was done by the assessee. The assessee could not even specified in which particular shop or place, the marble was used. The assessee had thus failed to establish the genuineness of the expenditure of ₹ 6,09,534. While computing his total income, the assessee had claimed further expenses of &# .....

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tax (Appeals), who had dismissed the appeal by observing that the findings of the Assessing Officer are based on the spot inquiry made by him and the assessee was given sufficient opportunity to produce the evidence of the use of marble. In the statement recorded on December 5, 2008, Shri Jagdish Prasad Jangir, who was looking after the construction work of the assessee and was also having power of attorney from the assessee, could not specify in which particular shop or place the marble was use .....

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ble in the construction of complex. The assessee could not produce original copy of the evidences before the Assessing Officer for verification. Page 1 of the additional evidences filed, a self-made voucher of ₹ 4,11,608, which was dated March 31, 2008, whereas the corresponding bill of lading at page 2 was dated February 3, 2006. Hence, he has not admitted the additional evidence as genuine and valid evidence. Thus, evidences were not made available during the quantum proceedings before t .....

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r of Income-tax (Appeals). He held that the assessment proceedings was completed at the time when he was alive even up to the learned Commissioner of Income- tax (Appeals). In this case, the assessee himself filed the return not by the legal heirs. The case law referred to by the assessee are also not convinced him that penalty cannot be imposed on the expired assessee. Therefore, he confirmed the penalty. 4. Now, the assessee is in appeal before us. The learned authorised representative of the .....

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ch was sold during the year. Therefore, the same was directly debited to the profit and loss account otherwise also the method of accounting employed by the assessee is not relevant for claiming any expenditure. Before the Assessing Officer in the assessment proceedings, has furnished photo copies of bills but original bills could not be produced before him. As the assessee already expired, therefore, original vouchers could not be produced. The legal heirs of the assessee made various efforts t .....

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quiry conducted through the Inspector, the marble was not found fixed in the constructed area, it is claimed that there is possible to alter the marble fixed by the assessee by the buyer as marble was placed in February, 2006, whereas inquiry was made in December, 2008. The penalty imposed under section 271(1)(c) of the Act is not automatic. The learned Assessing Officer disallowed the expenses, does not mean that the assessee had concealed the particulars of income. He relied on the decision of .....

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be imposed, which deals with the obligation of the legal representatives of the deceased person. As per sub-section (1), the legal representative has obligation to pay any sum. Sub-section (2) deals with assessment against the legal representative and recovery of sum from him. Sub-section (2) provides for assessment of income only and does not provide for levy of penalty. Thus, if penalty was levied on the assessee while he was alive the liability to pay the said sum would be on the legal repres .....

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n (1) any proceedings, i.e., recovery but not include the imposition of penalty. The learned authorised representative further relied on the decision in the case of Bhuban Mohan Mitter Charitable Trust v. ITO [1993] 45 ITD 617 (Cal) wherein the honourable High Court has held that penalty proceedings are quasi-criminal in nature. In criminal jurisprudence, a crime dies with a man and the legal representative of the deceased offender or criminal legal heirs cannot be penalised for the offences or .....

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honourable Income- tax Appellate Tribunal deleted the penalty on the deceased person. He further relied on the decision in the case of ITO v. V. P. Sharma [2006] 154 Taxman 34 (Delhi) (Mag.) wherein the co-ordinate Bench has considered the phrase "any sum" given in section 159(1) and held that which includes only tax not penalty proceedings. Accordingly, it allowed the appeal of the assessee. He also distinguished the case law relied upon by the learned Commissioner of Income-tax (App .....

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on November 22, 2010. In this case, the assessment was completed on December 17, 2008, and penalty was imposed on March 1, 2011. It means that after the death of the assessee. The assessee claimed the expenditure of ₹ 6,09,534 in the profit and loss account, which has been disallowed by the Assessing Officer. The same has been confirmed by the Income-tax Appellate Tribunal, vide order dated November 26, 2010. The assessee claimed that this marble was fixed in the construction made in Kaml .....

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