September 2009
Wealth-tax : Penalty : Legal representative : S. 15B, S. 18 and S. 19 of Wealth-tax Act, 1957 : A.Ys. 1968-69, 1970-71, 1971-72, 1983-84 and 1984-85 : Assessee filing returns and receiving notices for penalty : Penalty order passed after death of assessee
By K. B. Bhujle, Advocate
Reading Time 2 mins
New Page 1
II. Reported :
-
Wealth-tax : Penalty : Legal representative : S. 15B, S. 18 and S. 19 of Wealth-tax Act, 1957 : A.Ys. 1968-69, 1970-71, 1971-72, 1983-84 and 1984-85 : Assessee filing returns and receiving notices for penalty : Penalty order passed after death of assessee on legal representative : Not justified.
[ACIT v. Late Shrimant F. P. Gaekwad, 313 ITR 192 (Guj.)]
For the A.Ys. 1968-69, 1970-71, 1971-72, 1983-84 and 1984-85 the assessee had filed the returns of wealth. At the time of assessment, penalty proceedings were initiated u/s.18(1)(a), u/s.18(1)(c) and u/s.15B of the Wealth-tax Act, 1957. The assessee expired in 1988 before the penalty proceedings could be completed. The estate of the assessee devolved upon his mother who also passed away and thereafter it devolved upon the sister of the assessee. On 29-8-2003 the Assessing Officer passed penalty orders u/s.18(1)(a), u/s.18(1)(c) and u/s.15B of the Act. The Tribunal cancelled the penalty orders.
On appeal by the Revenue, the Gujarat High Court upheld the decision of the Tribunal and held as under :
“(i) No penalty order was passed during the life-time of the deceased. To make the legal representative liable for penalty u/s.19(1) it was not enough that the penalty proceedings should be initiated during the lifetime of the deceased. It was also necessary that such penalty proceedings must result in penalty orders during his lifetime. Therefore, neither S. 19(1) nor S. 19(3) casts any obligation on the executor, administrator or other legal representative to pay the amount of penalty as they were not liable to face any such penalty proceedings for which they have not committed any default.
(ii) The default, if any, was committed by the assessee and the assessee was not alive when the penalty proceedings culminated in penalty orders.”
