Notice for Penalty issued to Dead Person is Bad in Law: ITAT [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the penalty notice issued against a dead person is bad in law under the provisions of the Income Tax Act.

The assessment was completed against the assessee, an individual, on the basis of conclusions made after the search proceedings. The Assessing Officer was of the view that the assessee had undisclosed income. Accordingly, penalty proceedings under section 271AAB were also initiated by the Assessing Officer and since the explanation offered by the assessee in response to the show-cause notice issued during the course of the said proceedings was not found satisfactory by him, the Assessing Officer imposed penalty under section 271AAB of the Act at the rate of 30% of the undisclosed income admitted and surrendered under section 132(4) of the Act.

Before the authorities, the assessee made a contention that the penalty proceedings have been initiated against a dead person, initiation itself was bad-in-law and the penalty imposed under section 271AAB is, therefore, not sustainable. He has pointed out that the notice initiating penalty proceedings under section 271AAB was issued by the Assessing Officer on 13.10.2015 in the name of the assessee, who had already expired on 29.04.2015. a copy of the death certificate was also produced before the Tribunal.

Allowing the contentions, the Tribunal observed that “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 were not enforceable in law and the penalty imposed under section 271AAB in pursuance of such invalid initiation is not sustainable.”