Late Iqbal Hussain, L/H-2 Ekram Hussain vs Income-Tax Officer, Ward-1(1) on 6 October, 2006
In Union of India v. Shantilal Jevellers 271 ITR 140 (Bomb) it is held that Penalty proceedings under the income-tax Act are not proceedings in continuation of proceedings relating to assessment. The liability to pay a penalty imposed under the provisions of the Act cannot be said to arise until the point of time; when the penalty is imposed. Thus there may be a doubt that liability to pay a sum of penalty would arise only when the penalty is imposed and when penalty could not be imposed on the deceased as before that he had expired, and therefore there is no liability to pay a penalty on the L.Rs. as it has not arisen.