Dhirajlal Nathubhai Bhut Vs ITO (ITAT Rajkot)
Appeal was filed against CIT(A), NFAC order dated 25.11.2024, which had confirmed a penalty u/s 271(1)(b) of ₹70,000 for alleged non-compliance with notices. Appeal was delayed by 230 days, but Tribunal condoned the delay, accepting Assessee’s explanation of genuine hardship.
Assessee contended that the penalty proceedings were invalid since Assessee had already died, & AO issued notices & passed the penalty order in the deceased’s name, despite being informed of his death. Department nonetheless continued proceedings without bringing the legal heir on record.
Tribunal observed that issuing notices to a deceased person is void in law, & penalty cannot be imposed or recovered from a dead person. It emphasized that once Department is informed of death, proceedings must be initiated against legal heirs only. Citing the Supreme Court ruling in CST v. Modi Sugar Mills Ltd. (AIR 1961 SC 1047), it reiterated that tax liability must strictly conform to the letter of the law — & if law does not permit recovery from a deceased, none can be made.
Decision- Penalty of ₹70,000 deleted as it was imposed on a deceased person; order of CIT(A) quashed. Appeal allowed.
Proceedings against a deceased assessee are void ab initio; penalty cannot survive against a dead person. Legal heirs must first be brought on record before any action is taken.
