Rajeev Gupta v. The Income Tax Officer

Parties Involved

Facts Summary

The assessee had sold an immovable property on 18.06.2011 for a sale consideration of Rs.3,00,000/- as against the Circle Rate of the property of Rs.45,98,550/- mentioned in the Sale Deed. The assessee did not file the return of income for the year under consideration. The Assessing Officer initiated proceedings under section 147 of the Income Tax Act, 1961 by issuing notice dated 14.10.2016 under section 148 of the Act. In response to the said notice, none attended on behalf of the assessee. The Assessing Officer thereafter issued notice dated 20.06.2017 under section 142(1) of the Act fixing date for compliance on 10.07.2017, but none attended nor filed any reply on behalf of the assessee. The Assessing Officer, therefore, completed the assessment under section 144 of the Act after issuing show cause notice dated 22.11.2017 under 144 of the Act, assessing the income of the assessee at Rs.45,98,550/- as long term capital gain. The Assessing Officer also initiated penalty proceedings under section 271(1)(c) of the Act, vide order dated 26.06.2018 and subsequently imposed a penalty of Rs.9,10,000/-. Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. The appeal was assigned to NFAC. However, the appeal before the NFAC came to be dismissed for the reason of non-compliance.…

Legal Issues

• 1. Penalty imposed under section 271(1)(c) of the Income Tax Act 1961 by order dated 26-06-2018 passed by the Learned Assessing officer, imposing a penalty of Rs.9,10,000/- is bad, both on the facts and in law.
• 2. The Learned CIT (A)/NFAC was wrong in passing the ex-parte order without providing opportunity to the assessee, hence the order as framed is not correct and violative of principles of natural justice.
• 3. The Learned CIT (A) / NFAC has erred in confirming the penalty under section 271(1) (c) of the Income Tax Act 1961 without accepting the grounds of appeal submitted. The imposition of penalty was bad in law and hence the same must be deleted or quashed.
• 4. The Learned Assessing Officer has erred in imposing a penalty of Rs.9,10,000/- under section 271(1) (c) of Income Tax Act 1961 on a deceased person i.e. non - existing person, which has also been erroneously been confirmed by the CIT (A)/NFAC.
• 5. The assessment as framed by the learned Assessing officer is illegal as no notice has been served by him on the legal heir of the assessee who is deceased, despite providing the aforesaid information was given to the learned Assessing Officer and CIT (A) / NFAC along with death certificate.
• 6. The Learned Assessing Officer has erred in issuing penalty notice under section 271(1) (c) of Income Tax Act 1961 to the non-existing person i.e. Ramesh Chandra Gupta, who expired on 04-08-2016 (Bearing PAN-ACQPG5331G), which has also been upheld by the CIT (A) / NFAC.

Judgment Outcome

Decided in favour of Assessee.

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