Save a life-- income tax advise

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gaurav (Querist)
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05 December 2011 Respected Sir,

I am ex student of Income Tax and need your help for a friend of mine who has no one in family and Income Tax Officer is chasing her. Please this is not an email or spam seeking money as help. All we need is your advise and time!!!

Her dad met a road accident 2 years back and was mentally challenged. Recently he passed away.

Her daughter sold his home to at about 30 Lakhs :

1. Pay settlement money of 12 Lakhs to her step mother

2. To sponsor his treatment. Medical expenditure in first year was 10 Lakhs and recurring expenses was 25-35 K PM. Close to 15-16 Lakhs in medical and care taking expenses.

3. She had borrowed money to sponsor father's treatment as there was no source of Income. Though no agreement exist, she used family friends ATM to pay all medical bills.

4. She bought a new home from proceeds of the last home, however, she has over 15-20 lakhs as due to relatives if I include the interest.

Now, we got to know that her Father has some 2.75 Lakhs due as Income Tax and the matter related to some tax hided via some fake transaction. Amount with penalties is close to 3 lakhs.

It is a disgrace that income tax officer is asking for nearly 1-2 Lakhs to close the matter. CA is seeking fee of upto 10 K to present the matter, for initial hearing..

The gal has no source of income sir. Can you please guide her. All she got is a small house out of the saving of her previous home.

She has to return nearly 15-20 Lakhs which she borrowed to sponsor father's treatment.

PLEASE SIR....Your help can save her from all this.

She has undergone a trauma and with no source of income it would be a killer blow if her home is taken over by income tax department.

Further the old house was sold a year before his demise. New house was bought in next 2 months or so.

Cant they ignore 2-3 lakhs in such poor cases.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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06 December 2011 since she did not have money the officer can not make any recovery, ask her to close her bank account so that her account could not be attached. stop making any reply of recovery notice, after transfer of officer and matter will be under dust,

else you may meet the additional CIT or CIT or CCIT to overlook demand

C.P.CHUGH

C.P.CHUGH (Expert)
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06 December 2011 Under the existing Incoem-tax Law recovery of dues of a deceased assessee can be effected only against representative assesee who has undertaken to pay the dues or from the person to whome the estates of deceased has passed away. In your case no net realizable asset has been passed on to the querriest, hence no lawful recovery proceedings can be intiated against her. She should simply refuse to reply the notices issued to her later father's name and to me, no notice would have been issued in her name.

Guest

Guest (Expert)

06 December 2011 06th December, 2011

With due respect to what my professional colleagues have stated, I want to look at this issue from the simple mathematical angle :

Sale proceeds of flat .... Rs. 30 lakhs
Payment to step mother ... Rs. 12 lakhs
Amount remaining thereafter Rs. 18 lakhs
Father's IT dues with penaltyRs. 3 lakhs
Amount remaining thereafter R. 15 lakhs
Father's medical exp. loan Rs. 10 lakhs
Amount still with assessee Rs. 5 lakhs

It is inferred from the above that the Assessee has reasonable income to settle the IT dues of her father to avoid increase in penalty as per the provisions of the IT Act.

CA Sanjeev Kr Jain

CA Sanjeev Kr Jain (Expert)
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06 December 2011 IT WOULD BE BETTER TO PAY TAX ON SALE OF PROPERTY IF ANY BECAUSE IT IS HER PERSONAL LIABILITY

gaurav

gaurav (Querist)
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06 December 2011 I have made some crucial changes...sorry for the confusion..

gaurav

gaurav (Querist)
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06 December 2011 Additinally, she had sold off the property before her father's demise.

Does that still treated as a inheritance?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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17 March 2012 Dear Gaurav,

Really you have been confused. Let me tell you that any sale proceed out of the assets of the assessee are liable to be adjusted against the tax demand. Now, the question arises that when assessment was made the deceased must have filed appeal what has happened to that appeal? In case he lost then yes the income tax liability still exists and out of the sale proceeds of the properties the Girl has purchased the house for herself. If she can prove that the house purchased by her is out of her own sources then it does not matter. Now, tell the girl to directly meet the A.O and produce the various documents that the deceased had not left any of his assets and do not avoid the matter as it will go on filing interest u/s 220(2). So better to meet the A.O and request for send the proposal for write off the demand. As regards the fees of C.A. you cannot avoid it as he will represent the case he will charge his charges but out of marshi if she personally meets him or her (CA) it might be considered.