TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 650
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...., 1961. The action of ld. CIT(A)/NFAC is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the penalty levied by ld. AO and confirmed by ld. CIT(A)/NFAC. 2. In the facts and circumstances of the case and in law, ld. CIT(A)/NFAC has erred in confirming the penalty u/s 271(1)(c) without specifically pointing out specific limb of the section. The action of the ld. CIT(A)/NFAC is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the penalty imposed u/s 271(1)(c). 3. The assessee craves his rights to add, amend or alter any of the grounds on or before the hearing. 3. Succinctly, the fact as culled out from the records is that in this case in the quantum proceeding while passing the assessment order ld. AO made two additions, one was on account of unexplained cash deposits of Rs. 3,80,000 and another was for Long-Term Capital Gains (LTCG) of Rs. 14,62,758. Based on that set of facts a penalty order under Section 271(1)(c) was passed on 01.03.2017 ordering to pay penalty of Rs. 3,96,929. 4. When that order was challenged before the ld. CIT(A), he dire....
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....wever this was a debatable issue. The Appellant claimed that the fair market value is less than the stamp duty value. The tribunal stated that during the course of assessment proceedings, the assessee neither objected to the value determined by the sub-registrar nor had requested the AO for making reference to valuation officer. Section 50C(2) talks about an assessee making a claim before the Assessing officer that the valued adopted by the stamp valuation authority exceeds the fair market value of the property as on the date of transfer. There is no concealment involved as this was a difference of opinion. The failure of the assessee was in not requesting the AO during assessment proceedings to refer the valuation to DVO. This is not a charge that warrants penalty u/s 271(1)(c). As a result, the appeal is partly allowed. 5. Feeling dissatisfied with that order of the ld. CIT(A), the assessee challenged the levy of penalty to the extent it was sustained by the ld. CIT(A) before this tribunal. To support the various grounds so raised by the assessee, ld. AR of the assessee has filed the written submissions which reads as follows: I. Ld. AO made additions on account of un....
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....mitted in this regard to establish the availability of the cash with the assessee. 2.4. The above explanations with respect to the deposits are bonafide explanations supported by adequate evidences and the same are not proved false by the department. Therefore, the onus of the assessee u/s 271(1)(c) stands fully discharged. Accordingly, penalty may please not be imposed. 2.5. It is submitted that the interest on savings bank is duly reflected in the bank statement and there cannot be any possibility of concealing the same. Assessee was not liable to file return of income u/s 139 for the reasons of her income being lower than the taxable limit. Therefore, assessee never filed his return of income and there was no occasion for the assessee to offer this interest income for tax. Looked at from this angle, no penalty deserves to be imposed. 2.6. The assessee had sold land, a fact clearly established on record. It is pertinent to emphasize that the department has not alleged that the assessee was in possession of unexplained money. Even assuming, without admitting, that the source of the funds is not attributable to the sale of agricultural land, such amount m....
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....] In a factually identical case where the penalty was imposed during the assessee's lifetime and the assessee died during the appeal, the Hon'ble Tribunal held that the penalty amount is not recoverable from the legal representatives. The Tribunal reasoned that recovering the penalty from legal representatives would amount to punishing them, and a crime dies with the man. 2.12. It specifically noted the restrictive language of Section 159(4) to conclude that penalty proceedings abate on the death of the assessee. 2.13. It is further submitted that confirmation of addition per se cannot lead to imposition of penalty by the ld. AO. Merely because there is provision for the imposition of penalty, it is not mandatory that the taxing officer must levy a penalty in every case. 2.14. Hon'ble Supreme Court in Hindustan Steel Ltd. vs. State Of Orissa (1972) 83 ITR 26 in the context of Orissa Sales Tax Act,1947 has held that penalty will not merely be imposed because it is lawful to do so, but will be levied only in cases where there is deliberate defiance of law or contumacious or dishonest conduct or conscious disregard of a statutory obligation and altho....
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....ticulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxmn 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind...." 2.5. In the case of Jyoti Ltd. [2013] 34 taxmann.com 65 (HC-Guj), the assessing officer in his penalty order noted as under: - "In view of the above facts, it is clear that the assessee concealed income/furnished inaccurate particulars of income. I, therefore, consider it a fit case for levy of penalty under Section 271(1)(c)" Hon'bl....
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....e Hon'ble Jurisdictional High Court in the abovementioned case and deleted the penalty levied on the assessee under section 271(1)(c) 1.9.i Mohd. Sharif Khan vs. DCIT, in ITA. No 441/JP/2014 1.9.ii Jai Ambey Associates vs ITO in ITA No. 801/JP/2016 2.10. Ld. CIT(A) dismissed this ground by observing that penalty was proposed for both charges. This is an erroneous view, as the notice initiating the proceedings must be specific. The AO cannot be ambiguous at the initiation stage and leave the assessee to guess the charge against him In view of the above, the penalty imposed may please be quashed and the appeal of the assessee may please be allowed." 6. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that since the assessee left heavenly abode there cannot be levy of penalty and the legal heirs cannot be hold responsible for the levy of penalty. For that arguments he relied upon the provisions of section 159 of the Act and also serviced the copy of the decision of the co-ordinate bench of ITAT Nagpur benches in ITA no. 18/Nag/2023 in the case of Beantkaur Avtarsingh Juneja. 7. Per contra, the l....
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....n, or may come into, his possession, but such liability shall be limited to the value of the asset so charged, disposed of or parted with. (5) The provisions of sub-section (2) of section 161, section 162, and section 167, shall, so far as may be and to the extent to which they are not inconsistent with the provisions of this section, apply in relation to a legal representative. (6) The liability of a legal representative under this section shall, subject to the provisions of sub-section (4) and sub-section (5), be limited to the extent to which the estate is capable of meeting the liability. As is evident from the provisions of section 159(1) of the Act which talks about the liability of legal representative ['LR' hereinafter of deceased assessee] wherein the word 'any sum' referred has been substituted in place of word 'any tax' which occurred in old section 24B of the Income Tax Act, 1922 so as to cover not only tax payable but also any penalty or interest. Therefore, the legal representatives of the deceased can also be liable to pay penalty on behalf of the deceased assessee pursuant to the provisions of Section 159(1) of the Act. This finds support in the....