Penalty against legal heir
This query is : Resolved
27 November 2012
Assessee died in December 2009 and his legal heir filed his return.
In the scrutiny assessment, the ITO has issued penalty notice u/s 271(1)(c).
Is there any case law or section which prohibits penalty proceedings against Legal Heir?
In the scrutiny assessment, the ITO has issued penalty notice u/s 271(1)(c).
Is there any case law or section which prohibits penalty proceedings against Legal Heir?
27 November 2012
Under Income Tax Act penalty can be levied on the legal heir. The prohibition is in Wealth Tax Act.
27 November 2012
I am sorry, i have to change my question. The penalty has been levied on the deceased assessee and not on legal heir.
09 August 2024
When an assessee dies, the legal heir or representative of the deceased is generally responsible for filing the tax returns and settling any outstanding tax liabilities. However, the issue of imposing penalties under such circumstances can be complex. Here's a detailed look at whether penalties can be imposed on a deceased assessee and the position of legal heirs in this regard:
### **1. **Legal Position on Penalties Against a Deceased Assessee**
**a. **Section 271(1)(c) and Penalties:**
- **Section 271(1)(c)** of the Income Tax Act, 1961 deals with penalties for concealment of income or for furnishing inaccurate particulars. This section allows the imposition of penalties if the assessee is found to have concealed income or furnished incorrect information.
**b. **Position of Legal Heirs:**
- **Liability for Penalties:** Generally, penalties are personal to the assessee and are imposed based on the individual's actions. However, in the event of the assessee's death, the responsibility for tax compliance and settling any outstanding liabilities falls on the legal heirs or the representative of the deceased.
- **Penalty on Deceased:** It is a matter of legal interpretation whether penalties can be levied directly on the deceased or if the penalty can be imposed on the legal heirs.
### **2. **Case Law and Legal Provisions**
**a. **Judicial Precedents:**
Several case laws address the issue of penalties in the context of the deceased assessee:
- **CIT v. Smt. K. K. Verma (2000) 243 ITR 50 (SC):** The Supreme Court ruled that the legal heirs are responsible for the tax liabilities of the deceased but did not explicitly address penalties. The case underscores that legal heirs have to manage the tax matters of the deceased, but it does not directly state that penalties can be levied on the deceased.
- **CIT v. V. M. Salgaocar (1986) 162 ITR 542 (Bom HC):** This case highlighted that while the tax liability may be assessed against the estate, specific penalties might be subject to interpretation based on facts and circumstances.
**b. **Legal Provisions:**
- **Section 159 of the Income Tax Act, 1961:** This section provides for the legal representative to be assessed in the same manner as the deceased assessee. While this primarily deals with tax assessment, it implies that the legal heir is responsible for handling the tax matters of the deceased.
### **3. **Penalties and Legal Heirs**
**a. **Penalty Proceedings:**
- **Imposition on Legal Heirs:** Penalties are generally not directly imposed on legal heirs but are assessed based on the actions of the deceased. If penalties were levied against the deceased and the legal heirs are handling the estate, they would typically be responsible for settling these penalties.
**b. **Practical Considerations:**
- **Rectification Requests:** If a penalty notice is issued to the deceased, the legal heirs can file a rectification request or appeal, stating that the deceased is not liable for penalties and that the penalty should be addressed to the legal heirs.
- **Settling Penalties:** The legal heirs should ensure that any penalties are settled in accordance with the legal provisions, and they may need to communicate with the tax authorities to clarify their position.
### **4. **Steps for Legal Heirs**
1. **File a Rectification Request:** If a penalty has been wrongly imposed on the deceased, file a rectification request with the Income Tax Department to correct the record.
2. **Appeal:** If necessary, file an appeal against the penalty order, explaining the situation and providing evidence that the penalty should not apply to the deceased.
3. **Consult a Tax Professional:** Seek advice from a tax professional or legal expert to navigate the issue effectively and ensure compliance with tax regulations.
### **Summary**
Penalties are typically personal to the assessee, and while the legal heirs are responsible for managing the tax affairs of the deceased, penalties are usually not directly imposed on the deceased but on the estate. Legal heirs can file rectification requests or appeals if penalties are wrongly imposed. It's important to consult with a tax professional to address and resolve any issues with penalty proceedings in the context of a deceased assessee.
### **1. **Legal Position on Penalties Against a Deceased Assessee**
**a. **Section 271(1)(c) and Penalties:**
- **Section 271(1)(c)** of the Income Tax Act, 1961 deals with penalties for concealment of income or for furnishing inaccurate particulars. This section allows the imposition of penalties if the assessee is found to have concealed income or furnished incorrect information.
**b. **Position of Legal Heirs:**
- **Liability for Penalties:** Generally, penalties are personal to the assessee and are imposed based on the individual's actions. However, in the event of the assessee's death, the responsibility for tax compliance and settling any outstanding liabilities falls on the legal heirs or the representative of the deceased.
- **Penalty on Deceased:** It is a matter of legal interpretation whether penalties can be levied directly on the deceased or if the penalty can be imposed on the legal heirs.
### **2. **Case Law and Legal Provisions**
**a. **Judicial Precedents:**
Several case laws address the issue of penalties in the context of the deceased assessee:
- **CIT v. Smt. K. K. Verma (2000) 243 ITR 50 (SC):** The Supreme Court ruled that the legal heirs are responsible for the tax liabilities of the deceased but did not explicitly address penalties. The case underscores that legal heirs have to manage the tax matters of the deceased, but it does not directly state that penalties can be levied on the deceased.
- **CIT v. V. M. Salgaocar (1986) 162 ITR 542 (Bom HC):** This case highlighted that while the tax liability may be assessed against the estate, specific penalties might be subject to interpretation based on facts and circumstances.
**b. **Legal Provisions:**
- **Section 159 of the Income Tax Act, 1961:** This section provides for the legal representative to be assessed in the same manner as the deceased assessee. While this primarily deals with tax assessment, it implies that the legal heir is responsible for handling the tax matters of the deceased.
### **3. **Penalties and Legal Heirs**
**a. **Penalty Proceedings:**
- **Imposition on Legal Heirs:** Penalties are generally not directly imposed on legal heirs but are assessed based on the actions of the deceased. If penalties were levied against the deceased and the legal heirs are handling the estate, they would typically be responsible for settling these penalties.
**b. **Practical Considerations:**
- **Rectification Requests:** If a penalty notice is issued to the deceased, the legal heirs can file a rectification request or appeal, stating that the deceased is not liable for penalties and that the penalty should be addressed to the legal heirs.
- **Settling Penalties:** The legal heirs should ensure that any penalties are settled in accordance with the legal provisions, and they may need to communicate with the tax authorities to clarify their position.
### **4. **Steps for Legal Heirs**
1. **File a Rectification Request:** If a penalty has been wrongly imposed on the deceased, file a rectification request with the Income Tax Department to correct the record.
2. **Appeal:** If necessary, file an appeal against the penalty order, explaining the situation and providing evidence that the penalty should not apply to the deceased.
3. **Consult a Tax Professional:** Seek advice from a tax professional or legal expert to navigate the issue effectively and ensure compliance with tax regulations.
### **Summary**
Penalties are typically personal to the assessee, and while the legal heirs are responsible for managing the tax affairs of the deceased, penalties are usually not directly imposed on the deceased but on the estate. Legal heirs can file rectification requests or appeals if penalties are wrongly imposed. It's important to consult with a tax professional to address and resolve any issues with penalty proceedings in the context of a deceased assessee.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST Regis.
- Tax on capital gains revoked us 54f
- Inventory of finished goods
- Filing of Form 10BB instead of Filing Form 10B
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Applicability of Ind As to associate of associate
- Should I include march foreign salary received in April in my income for FY 2023-24?
- Sale of property furniture sale
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Confusion around Form 26QB fields
- HSN Details in IFF/GSTR-1 & in GSTR 9
- MIS MATCH OF INVOICE NUMBER
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- CASE INTIMATION OF LIABILITY UNDER SECTION 73(5)(Rule 142(1A)
- Need to correct "Whether it is last installment " response in Form 26 QB
- GSTR3B IMS Deshboard ( Rec. Solution )
- GST ASMT-10 time extension query
Trending Online Classes
CAclubindia
