1990 (10) TMI 150 - AT - Income Tax

Summary

Issues:
1. Penalty proceedings under s. 271(1)(a) of the IT Act, 1961 for delay in filing returns of income.
2. Penalty under s. 273(1)(b) for not furnishing statement of advance tax.
3. Penalty under s. 273(2)(a) for filing untrue estimate of advance tax.
4. Validity of penalty orders and representation in penalty proceedings.
5. Service of notices on minors and their guardians.
6. Direct assessment and penalty on minors.
7. Representation of minors by guardians in penalty proceedings.

Analysis:
1. The IT Officer initiated penalty proceedings under s. 271(1)(a) of the IT Act, 1961 for delay in filing returns of income. Penalties were levied on various individuals for different assessment years based on the period of delay and amount of penalty imposed. The assessees challenged these penalties in second appeals.

2. Additionally, penalties were imposed under s. 273(1)(b) on Anurag for not furnishing a statement of advance tax, and under s. 273(2)(a) on Shri Ramesh Malik for filing an untrue estimate of advance tax. The assessees contested the validity of these penalties, citing lack of proper representation and opportunity to be heard.

3. The assessees argued that the notices were served improperly, and the representation made by Shri Satish Malik, who was not authorized by the assessees, was invalid. They contended that the penalties were imposed without giving them a reasonable opportunity to defend themselves.

4. The Departmental Representative argued that the service of notices on Shri Satish Malik was valid as he was a family member of the assessees. He also asserted that the grievance of lack of opportunity had already been considered by the first appellate authority and could not be reagitated. The representative further contended that penalties could be levied directly on minors, citing legal precedents.

5. The Tribunal found that the notices were not properly served and the assessees were not given a reasonable opportunity to be heard. Penalties imposed on the assessees, except Anurag for the assessment year 1979-80, were deemed unsustainable.

6. Regarding penalties on minors, the Tribunal highlighted that penalties could not be levied directly on minors without proper representation by their guardians. Direct assessment or penalty on a minor without guardian representation was considered a nullity and not binding. Therefore, penalties on minors without guardian representation were canceled.

7. In conclusion, all penalties imposed were canceled, and the appeals of the assessees were allowed based on the lack of proper representation, opportunity to be heard, and the invalidity of penalties on minors without guardian representation.