LATE SHRI SHAILESH M. SHAH LEGAL HEIR SMT. KUNJALATA S. SHAH, MUMBAI v. ITO 25(3)(4), MUMBAI

ITA 2445/MUM/2012 | 2005-2006
Pronouncement Date: 23-10-2013 | Result: Allowed

Appeal Details

RSA Number 244519914 RSA 2012
Assessee PAN AACPS9258A
Bench Mumbai
Appeal Number ITA 2445/MUM/2012
Duration Of Justice 1 year(s) 6 month(s) 11 day(s)
Appellant LATE SHRI SHAILESH M. SHAH LEGAL HEIR SMT. KUNJALATA S. SHAH, MUMBAI
Respondent ITO 25(3)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 23-10-2013
Date Of Final Hearing 08-10-2013
Next Hearing Date 08-10-2013
Assessment Year 2005-2006
Appeal Filed On 12-04-2012
Judgment Text
` IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI . . ! ' #'' '$ % ! & BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND SHRI VIVEK VARMA JUDICIAL MEMBER . 2445 / / 2012 A.Y. 2005-2006 ITA NO. : 2445/MUM/2012 (ASSESSMENT YEAR: 2005-2006) LATE SHRI SHAILESH M SHAH L.H. SMT. KUNJALATA S. SHAH 402/B MITHILA APARTMENT OPP: SYNDICATE BANK KANDIVALI (W) MUMBAI -400 067 .: PAN: AACPS 9258 A VS ITO -25(3) (4) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT- REVENUE BY : SHRI K. GOPAL RESPONDENT- ASSESSEE BY : SHRI ABONI KANT NAYAK /DATE OF HEARING : 08-10-2013 !' / DATE OF PRONOUNCEMENT : 23-10-2013 ) O R D E R #'' '$ : PER VIVEK VARMA JM: THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) 35 MUMBAI DATED 17.01.2012 WHEREIN PENALTY OF RS . 1 82 123/- LEVIED U/S 271(1)(C) HAS BEEN SUSTAINED BY THE CIT(A). 2. IN THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE TRADING IN YARN & GREY CLOTH RECEIVED CERTAIN COMM ISSION FROM ALOK INDUSTRIES LTD. THE ASSESSEE HAD SHOWN THE RECEIPT OF RS. 4 50 261/- WHEREAS IN RESPONSE OF NOTICE U/S 133(6) ALOK INDU STRIES LTD. HAD SHOWN THE PAYMENT OF COMMISSION AT RS. 8 55 896/-. THEREFORE THERE WAS A DIFFERENCE OF RS. 4 05 635/-. THE AO ALSO FOUND THAT THE ASSES SEE HAD NOT FULLY DISCLOSED COMMISSION RECEIVED FROM M. VIJAYCHANDRA JHA. ACCORDING TO THE CONCLUSION DRAWN THE TOTAL COMMISSION WAS RS. 3 79 078/- AND SINCE HALF OF LATE SHRI SHAILESH M SHAH L.H. SMT. KUNJALATA S. SHAH ITA 2445/MUM/2012 2 IT WAS CONSIDERED IN THE HANDS OF THE M. VIJAYCHAND RA JHA THE AO ADDED BACK RS. 1 89 539/- TAKING THE AGGREGATE ADDITION TO RS. 5 95 174/-. 3. THE AO THEREAFTER INITIATED AND LEVIED THE PEN ALTY U/S 271(1)(C) OF RS. 1 82 123/-. 4. THE PENALTY AS LEVIED BY THE AO WAS SUSTAINED BY THE CIT(A). 5. IN THE INSTANT PROCEEDINGS THE AR SUBMITTED THA T THE RETURN OF INCOME WAS FILED ON 27.10.2005 BY THE LEGAL HEIR OF THE AS SESSEE THOUGH NOT MENTIONED IN THE RETURN DESPITE THE FACT THAT THE ASSESSEE HAD EXPIRED ON 24.12.2004 I.E. PRIOR TO THE FILING OF THE RETURN AND THIS FACT WAS NOTED BY THE AO IN THE ASSESSMENT PROCEEDINGS AND REPRODUCED IT ALSO. 6. THE AR ALSO SUBMITTED THAT THE FACTS RELIED UPON BY THE AO IN THE FRAMING THE ASSESSMENT ORDER COULD NOT HAVE BEEN SA TISFIED BY THE LEGAL HEIR MRS. KUNJLATA S SHAH WHO WAS TOTALLY UNAWARE WITH THE BUSINESS ACTIVITIES OF THE ASSESSEE. IN ANY CASE AS THE AO HAD PLACED RELIANCE ON THIRD PARTY EVIDENCES WHICH WERE NEVER CONFRONTED TO ANYBODY. HE FURTHER SUBMITTED THAT IT MIGHT BE A CASE FOR MAKING ADDITION THOUGH IN ANY CASE THE LEGAL HEIR COULD NOT HAVE DONE ANYTHING AS THE ASSESSEE HIMSELF WAS NOT THERE (SINCE DECEASED). 7. THE AR THEREFORE SUBMITTED THAT IT IS NOT THE CASE OF LEVY OF PENALTY AS THE LEGAL HEIR WAS NOT AWARE OF THE ACTIVITIES O F THE ASSESSEE. HENCE THE PENALTY SHOULD BE DELETED. 8. THE DR RELIED ON THE ORDERS OF THE REVENUE AUTHO RITIES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO NOT ED THE FACT THAT THE ASSESSEE HAD EXPIRED BEFORE FILING OF THE RETURN. T HIS FACT HAS BEEN NOTED BY THE AO IN THE ASSESSMENT PROCEEDINGS. IN OUR OPINIO N THE ASSESSMENT ORDER ITSELF IS ILLEGAL BECAUSE AFTER TAKING INTO CONSI DERATION THE DEATH OF THE ASSESSEE THE AO STILL PASSED THE ORDER IN THE ASSE SSEES NAME AND NOT IN THE NAME OF THE LEGAL HEIR. THIS FACT IF TAKEN INTO CO NSIDERATION WOULD SHAKE THE VERY FOUNDATION OF THE ASSESSMENT AND THE PENALTY EMANATING FROM THE ASSESSMENT PROCEEDINGS WOULD FALL AUTOMATICALLY. HO WEVER SINCE THE ISSUE HAS NOT BEEN QUESTIONED ANYWHERE WE WILL NOT DEAL WITH THIS ASPECT. LATE SHRI SHAILESH M SHAH L.H. SMT. KUNJALATA S. SHAH ITA 2445/MUM/2012 3 10. COMING TO THE FACTS OF THE INSTANT CASE WE ARE OF THE VIEW THAT THE CONDUCT OF THE ASSESSEE HOWEVER ILLEGAL OR INFIRM CANNOT IMPLICATE THE LEGAL HEIR(S) BECAUSE THEY MAY NOT BE CONNECTED. IN THIS CASE WE ARE SATISFIED THAT THE LEGAL HEIR WAS NOT AWARE OF THE BUSINESS A CTIVITIES OF THE ASSESSEE. IN ANY CASE EVEN THE EVIDENCES GATHERED BY THE AO ON BASIS OF WHICH THE ADDITIONS HAD BEEN MADE WERE THIRD PARTY EVIDENCES AND WHICH WERE NOT CONFRONTED TO THE LEGAL HEIR (WHO IN ANY CASE WOUL D HAVE BEEN UNAWARE). 11. IN THESE CIRCUMSTANCES WE CANNOT IMPLICATE THE LEGAL HEIR AND SADDLE HER WITH PENALTY. WE THEREFORE SET ASIDE ORDER OF THE CIT(A) SUSTAINING THE PENALTY OF RS. 1 82 123/- AND DIRECT THE AO TO DELE TE THE SAME. 12. THE APPEAL THUS FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER 2013. SD/- SD/- ( . . ) ( #'' '$ ) ! ! (P.M. JAGTAP) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATE: 23 RD OCTOBER 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) & & ' ( ) - 35 MUMBAI / THE CIT (A)-35 MUMBAI. 4) & & ' )- 25 MUMBAI / THE CIT CITY -25 MUMBAI 5) *+ - & - ./ / THE D.R. E BENCH MUMBAI. 6) 0 1 COPY TO GUARD FILE. &23 / BY ORDER / / TRUE COPY / / 4 / 5 6 & - ./ DY. / ASSTT. REGISTRAR I.T.A.T. MUMBAI *895 . . * CHAVAN SR. PS