R.R. FLEET MANAGEMENT PVT. LTD,HARYANA vs. ITO WARD-3(3), GURGOAN

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ITA 6359/DEL/2019Status: DisposedITAT Delhi14 February 2023AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a crucial ground regarding the non-specification of the charge in the penalty notice (concealment of income or furnishing inaccurate particulars) was not dealt with by the CIT(A). Therefore, the issue was remitted back to the CIT(A) for proper adjudication.

What were the facts?

The Assessing Officer (AO) rejected the assessee's books of account and estimated profit, leading to an addition. A penalty under Section 271(1)(c) was also levied. The CIT(A) confirmed the penalty, relying on a Supreme Court decision.

What were the issues?

Whether the penalty order under Section 271(1)(c) is valid when the specific charge (concealment or inaccurate particulars) was not clearly specified in the notice, and whether the AO recorded the mandatory satisfaction.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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Income Tax Appellate Tribunal, DELHI BENCH, ‘F’: NEW DELHI

Before: SHRI SHAMIM YAHYA & Ms. ASTHA CHANDRA

For Respondent: Ms. Princy Singla, Sr. DR
Hearing: 08.02.2023Pronounced: 14.02.2023

ORDER PER SHAMIM YAHYA, AM,

This appeal by the assessee is directed against the order of ld. CIT (Appeals)-02, Gurgaon, dated 30.05.2019 for the Assessment Year 2015-

2.

The grounds of appeal read as under:-

1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty of Rs.5,44,446/- u/s 271(1)(c) and framing the impugned penalty order without considering the facts and circumstances of the case and without proving adequate opportunity of being heard and without observing the principle of natural justice.

2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned penalty order passed by Ld. AO us 271(1)(c) and that too without assuming jurisdiction as per law and the impugned penalty order being illegal, void ab initio and against the facts and circumstances of the case.

3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in imposing penalty w/s 271(1)(c), is bad in law and against the facts and circumstance of the case and having been imposed on the estimated addition.

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty and passing the impugned penalty order and that too without recording the mandatory 'satisfaction' as per law and without levying a clear charge whether there was concealment of income or furnishing of inaccurate particulars of income and without the valid approval of Ld. JCIT.”

3.

Brief facts of the case leading to penalty in this case are that the AO rejected the books of account of the assessee for failure to submit the complete details. The AO proceeded to estimate profit @3% of gross turnover as per the past assessment history and made addition on this count. Penalty u/s 271(1)(c) of the Act was also levied.

4.

Upon assessee’s appeal, the Ld. CIT(A) referring to the decision of Hon’ble Supreme Court in the case of Union of India vs Dharmendra Textiles and Processors (2008) 306 ITR 277 (SC) confirmed the levy of penalty.

5.

Against this order the assessee is in appeal before the Tribunal.

6.

We have heard the Ld. DR and perused the records. None appeared on behalf of the assessee despite several notices. We note that one of the ground raised before the Ld. CIT(A) was the non-specification of charge in the notice of penalty, whether there was concealment of income or furnishing of inaccurate particulars of income. In this regard, ground no.3 raised before the Ld. CIT(A) reads as under:-

“3. That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in imposing the impugned penalty and passing the impugned penalty order and that too without recording the mandatory “satisfaction” as per law and without levying a clear charge whether there was concealment of income or furnishing of inaccurate particulars.” 7. We have perused the entire order of the Ld. CIT(A) and we note that nowhere, this aspect has been dealt with. Before us, also the assessee has raised this ground. However for proper adjudication of this ground reference to factual records is necessary, hence in the interest of justice, we remit this issue to the file of the Ld. CIT(A). We are of the opinion that adjudicating part of the appeal and remitting the other part of the appeal to the file of the Ld. CIT(A) will lead to multiplicity of proceeding and hence we are refraining to do that. The Ld. CIT(A) is directed to complete his order by adjudicating the ground relating to non-specification of charge in the penalty notice. After the order of the Ld. CIT(A) is complete, either of the parties may approach appellate forum for relief as deemed necessary.

8.

In the result, this appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open court on 14th February, 2023.

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