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2016 (7) TMI 1433

erely because the legal representative withdrew the appeal pending before this Tribunal after the expiry of the assessee Shri K.C.G. Verghese and the legal representative is not in a position to explain the source of investment, this Tribunal is of the considered opinion that that cannot be a reason for levying penalty under Section 158BFA(2) of the Act. This Tribunal is of the considered opinion that it is not a fit case for levy of penalty under Section 158BFA(2) of the Act. Accordingly, the orders of the lower authorities are set aside and the penalty levied under Section 158BFA(2) of the Act is deleted.- Decided in favour of assessee. - I.T.(SS) A. No. 16/Mds/2011 - Dated:- 1-7-2016 - Shri N.R.S. Ganesan, Judicial Member And Shri A. Moh .....

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ing Officer initiated penalty proceeding under Section 158BFA(2) of the Act. According to the Ld. counsel, the penalty levied by the Assessing Officer is in respect of the conduct of the deceased assessee, therefore, after the expiry of the assessee no penalty can be levied against the legal heirs. 3. The Ld.counsel further submitted that in respect of investment made by the assessee in land at Karapakkam, the same was disclosed to the extent of ₹ 18,41,238/-. However, the actual amount found to be invested by the assessee was ₹ 71,48,000/-. According to the Ld. counsel, the assessee has disclosed the investment in the landed property in the VDI Scheme, 1997 to the extent of ₹ 18,41,238/-. Therefore, according to the Ld. c .....

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the Ld. Departmental Representative, submitted that the investment in the landed property at Karapakkam was made by the deceased assessee to the extent of ₹ 71,48,000/-. However, what was disclosed in the VDI Scheme is only ₹ 18,41,238/-. Therefore, the difference of ₹ 53,06,762/- needs to be explained by the assessee. According to the Ld. D.R., the penalty is levied only on the assessee for not furnishing the particular details and not on the legal representative. The penalty is to be recovered only from the assets of the deceased assessee. In order to comply with the procedural aspect, the legal representative was given an opportunity as provided in Section 159 of the Act. Therefore, the death of the assessee, namely , S .....

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the return. In the case before us, the assessee expired during the pendency of quantum appeal before this Tribunal and the legal representative withdrew the appeal. Now the legal representative of the deceased assessee claims before this Tribunal that they could not trace out any papers and they are not able to explain why the undisclosed income determined by the Assessing Officer exceeded the undisclosed income disclosed by the assessee in the return. The fact remains that the deceased assessee has disclosed the cost of acquisition of land in the VDI Scheme to the extent of ₹ 18,41,238/-. The seized material, which was identified during the course of search operation, disclosed the investment to the extent of ₹ 71,48,000/-. Th .....

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Section 148 of the Act. Therefore, the disclosure made by the legal representative is a bonafide and voluntary. Hence, the penalty cannot be levied at all. This principle was laid down by Punjab & Haryana High Court in a proceeding for levying penalty under Section 271(1)(c) of the Act. This Tribunal is of the considered opinion that the same principle is equally applicable in respect of penalty levied under Section 158BFA(2) of the Act. Therefore, merely because the legal representative withdrew the appeal pending before this Tribunal after the expiry of the assessee Shri K.C.G. Verghese and the legal representative is not in a position to explain the source of investment, this Tribunal is of the considered opinion that that cannot be .....

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