DCIT Vs Smt. Kamala Prabha (ITAT Jaipur)
Dead Assessee, Deleted Addition &; a Penalty with No Pulse: ITAT Upholds Deletion of ₹1.01-Crore Penalty u/s 271(1)(c)
Revenue Challenges Deletion of Penalty
The Revenue filed an appeal challenging the order dated 28.08.2025 passed by the CIT(A)-4, Jaipur, deleting penalty of ₹1,01,84,719 u/s 271(1)(c).
The penalty had been imposed in proceedings relating to late Shri Goswami Gopal Lal. His legal heir, Smt. Kamala Prabha, represented the estate in the appellate proceedings.
The Revenue’s principal contention was that the CIT(A) erred in holding that penalty proceedings could not be maintained against the legal heir of a deceased assessee.
Assessment & Initiation of Penalty
The assessment had been completed u/s 143(3) at total income of ₹41,42,410.
The assessment order included additions of ₹8,52,531 on account of interest income & ₹25,200 on account of rental income.
Based upon the additions made in the assessment, the AO initiated penalty proceedings u/s 271(1)(c), alleging concealment of income or furnishing of inaccurate particulars.
The assessee contested the proposed penalty. However, the AO rejected the explanation & imposed penalty of ₹1,01,84,719, stated to represent 100% of the tax allegedly sought to be evaded.
The legal heir challenged the penalty before the CIT(A), who deleted it.
