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TMI Blog2014 (7) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... lius Pereira are alive today, a lenient view of the matter deserves to be taken - she has voluntarily offered to tax to buy peace of mind – thus, the explanation of the assessee is bonafide – Decided in favour of Assessee. - ITA No.2956 & 2957/Mum/2012 - - - Dated:- 2-7-2014 - D Manmohan And Rajendra, JJ. For the Appellant : Shri Vijay Mehta For the Respondent : Shri Sambit Mishra ORDER PER : D Manmohan These appeals, filed by the assessee, are directed against the orders passed by the CIT(A), Thane and they pertain to assessment years 2005-06 and 2006-07. 2. Penalty levied by the AO under section 271(1)(c) of the Act and confirmed by the CIT(A) is the subject matter of dispute before us. 3. The appeals were filed on 01.05.2012 by Smt. Violet Julius Pereira. She expired on 03.10.2012. Shri Julius Francis Pereira filed an affidavit before the Tribunal stating that he should be brought on record as Legal Representative of the deceased assessee. The learned D.R. submitted that the AO has no objection for bringing the said person as the legal heir of the assessee. Accordingly Shri Julius Francis Pereira is brought on record as legal heir of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 (order passed by the ITO (HQ) (CIB), Pune under section 144 of the Act) and, therefore, the order passed under section 271(1)(c) on 24.04.2009 is barred by limitation and hence deserves to be quashed. On this aspect also the learned counsel relied upon several decisions of the Tribunal. (c) It was also contended that section 274(2) of the Act mandates prior approval of the Joint Commissioner wherever penalty leviable exceeds ₹ 10,000/Rs.20,000/- whereas, in the instant case, penalty order was passed under section 271(1)(c) on 24.04.2009 while approval of the Addl. CIT was dated 28.04.2009 and thus the procedure prescribed under section 274(2) was not followed resulting in the order being passed contrary to law and, therefore, liable to be quashed. The learned counsel for the assessee referred to section 274(2) of the Act and in particular the language No order imposing a penalty under this Chapter shall be made . except with the prior approval .. . Relevant provision is extracted herein. (2) No order imposing a penalty under this Chapter shall be made - (a) by the Income-tax Officer, where the penalty exceeds ten thousand rupee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e onus is on the Revenue to prove the same. 8. Even on merits the learned counsel for the assessee submitted that the assessee herein expired at unexpected age. The legal representatives are sons of Late Francis Philip Gonsalves. Late Francis used to stay with his daughter, Smt. Violet Julius Pereira. Mr. Francis Philip Gonsalves retired from Railway service and used his retirement funds in money lending activity. By the end of 2004 his health deteriorated due to attack of cancer consequent to which he decreased his money lending activity with an intention to wind up the activity in the course of time. Legal heirs deposed on oath that to the best of their information he has accumulated about ₹ 20,00,000/- by March, 2005 and he has able to get a little more ₹ 10,00,000/- from borrowers, which appears to have been deposited in March, 2005 and January, 2006 in the account of Smt. Violet Julius Pereira with Bassien Catholic Co-op. Bank Ltd. with an intention to distribute the amount amongst his family members. Though she was not able to properly explain because of the depressed circumstances, even to furnish further material at this stage, on account of her demise on 03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reckoned from the date of passing the assessment order it may become handy to individual assessees to take advantage of the maze of law by filing an appeal and wait for sufficient time and to withdraw the appeal because the assessee has no case on merits but at the same time take the benefit of limitation vis- -vis penalty proceedings. There are number of decisions cited before us. Since we have accepted the plea of the assessee with regard to third technical ground, it is not necessary at this stage to go into the moot questions in the form of technical grounds (a) and (b). In the result, order passed under section 271(1)(c) of the Act is quashed and the appeal filed by the assessee is treated as allowed. 11. With regard to penalty levied for A.Y. 2006-07 it deserves to be noticed that the AO levied penalty of ₹ 3,78,970/- on the ground that the cash deposit of ₹ 10,00,000/- made on 12.01.2006 is not properly explained, whereas the case of the assessee was that the cash deposited in her bank account did not belong to her and in fact it was her father s cash and out of his own source. According to his last wish the cash was to be distributed among the family memb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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