TMI Blog2018 (12) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Alamelu Veerappan –vs.- ITO (2018 (6) TMI 760 - MADRAS HIGH COURT), we accept the same and hold that the penalty proceedings initiated by the Assessing Officer against a dead person was not enforceable in law and the penalty imposed under section 271AAB in pursuance of such invalid initiation is not sustainable. - Decided in favour of assessee. - I.T.A. No. 1539/KOL/2017 - - - Dated:- 30-11-2018 - Shri P.M. Jagtap, Vice-President (KZ) and Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri C.J. Singh, Sr. D.R., For the Respondent : Shri Amit Agarwal, Advocate ORDER PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- This appeal is preferred by the Revenue against the order of ld. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered under section 132(4) of the Act. 3. The penalty imposed by the Assessing Officer under section 271AAB was challenged by the assessee in the appeal filed before the ld. CIT(Appeals) and after considering the submissions made on behalf of the assessee as well as the material available on record, the ld. CIT(Appeals) restricted the penalty imposed by the Assessing Officer under section 271AAB only to the extent it was in respect of the undisclosed income of ₹ 17,58,272/- for the following reasons given in his impugned order:- I have considered the findings given by the AO in the penalty order and submissions made by the AR during the appellate proceeding. I find that the AO has taken the undisclosed income of the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord the case law of Dilip N Shroff vs CIT (2007) 291 ITR 519 (SC). In this case law the Hon'ble Supreme Court has held that imposition of penalty is not automatic. Levy of penalty is not only discretionary in nature, but such discretion is required to be exercised on the part of the Assessing Officer keeping the relevant factors in mind. The AR has also brought on record the case of Pubjab Tyres (Pubjab Tyres [1986] 162 ITR 517 (Madhya Pradesh), the Hon'ble High Court of Madhya Pradesh) in which it was held that when surrender is made to purchase peace or for other similar reason, surrender cannot amount to admission, constituting evidence of concealment in penalty proceedings. The AR has brought on record the case law of Sudha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther I find that the AO has levied penalty u/s 271AAB(1)(c). This section reads like sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. Thus, it is clear that in order to levy penalty two things are essential: (1) undisclosed income and (2) specified previous year. Here in this case ₹ 3,78,00,000 / - was offered for taxation by the assessee suo moto in the statement recorded at the time of search. From the ratio decided by the Hon'ble Supreme Court in the case of Sudarshan Silk Saries (supra), it is clear that only the statement of the assessee without any corroborating evidence cannot be the only basis for levying penalty. Here it is also clear that from the statement of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy expired on 29.04.2015. He has filed a copy of the relevant death certificate and contended that the penalty notice thus was issued by the Assessing Officer in the name of a dead person, which is not enforceable in law. Since this contention of the ld. Counsel for the assessee is duly supported by the decision of the Hon ble Madras High Court in the case of Alamelu Veerappan vs.- ITO (2018) 95 taxmann.com 155 (Madras), we accept the same and hold that the penalty proceedings initiated by the Assessing Officer against a dead person was not enforceable in law and the penalty imposed under section 271AAB in pursuance of such invalid initiation is not sustainable. We accordingly uphold the impugned order of the ld. CIT(Appeals) although on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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