CIT(A) penalty order quashed for being issued in deceased assessee's name despite legal heir notification

ITAT Surat quashed CIT(A)'s order imposing penalty u/s 271(1)(c) because it was passed in the name of a deceased assessee. Despite legal heir informing CIT(A) about the death, notices and final order were issued in dead person's name, making them legally invalid. Court held that proceedings should have been conducted against legal heirs, not deceased person. Relying on Savita Kapila and Maruti Suzuki precedents, ITAT ruled such orders lack jurisdiction and must be set aside. Appeal allowed.

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Issues Involved:
1. Imposition of penalty u/s 271(1)(c) of the I.T. Act, 1961.
2. Validity of penalty order passed in the name of a deceased assessee.

Summary:

Issue 1: Imposition of penalty u/s 271(1)(c) of the I.T. Act, 1961
The assessee was penalized by the Assessing Officer (AO) u/s 271(1)(c) for not filing a return of income for AY 2012-13 and earlier years. The AO noted discrepancies in the income declared and initiated penalty proceedings, imposing a penalty of Rs. 1,87,005/-. The assessee contended that there was no intentional concealment of income and that the return was filed in response to notice u/s 148. The CIT(A) upheld the penalty, rejecting the plea that the penalty should not be imposed on a deceased person.

Issue 2: Validity of penalty order passed in the name of a deceased assessee
The penalty order was passed in the name of the deceased assessee, who died on 12/02/2022. The legal heirs informed the CIT(A) about the death, but the CIT(A) still passed the order in the name of the deceased. The Tribunal found this action unacceptable, citing the case of Savita Kapila vs. ACIT, where it was held that a notice issued to a deceased person is invalid. The Tribunal quashed the order passed by the CIT(A) as it was not tenable in law to issue notices and pass orders in the name of a dead person. Consequently, all other issues on the merits of the additions in the penalty proceedings were rendered academic and infructuous.

Conclusion:
The appeal of the assessee was allowed, and the penalty order passed by the CIT(A) was quashed due to it being issued in the name of a deceased person, which is invalid as per the legal precedents cited.

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