KALYAN JI MISHRA,MIRZAPUR vs. INCOME TAX OFFICER WARD 3(1), MIRZAPUR

PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER:

1. That in any view of the matter penalty imposed u/s 271(1)(C) by order dated 16.03.2015 imposing penalty of Rs. 5,10,000/- is based both on the facts and in law.

2. That in any view of the matter the assessee has not concealed any particulars of income nor furnished any inaccurate particulars hence imposition of penalty of Rs. 5,10,000/- is highly unjustified.

3. That in view of the matter the Ld. CIT(A) was wrong in passing the order ex-parte without providing reasonable opportunity to the assessee hence the order of CIT(A) is not a speaking order in the eyes of law.

Asstt. Year-2009-10 4. That in any view of the matter the appellant reserves his right to take any fresh grounds of appeal before hearing of appeal. ”

2. While completing the assessment u/s 143(3) on 16/12/2011 the Assessing Officer made an addition of Rs. 1,89,852/- under Section 40A (3) and an addition of Rs 14,54,000/- on account of cash deposit in this saving bank account. Apart from this, the Assessing Officer also made an addition of Rs. 1,00,000/- on account of household expenses. Thereafter, the Assessing Officer levied the penalty u/s 27(1)(C) @ 100% of tax to be avoided vide the order dated 16.03.2015. The assessee challenged the levy of penalty before the CIT(A) but could not succeed.

3. Before the Tribunal, the learned AR of the assessee has submitted that in quantum appeal the Varanasi Bench of this Tribunal has set aside the matter to the record of the CIT(A) for a fresh adjudication therefore, the penalty levied under Section 271(1) (C) is liable to be set aside and the matter may be reminded to the record of the CIT(A) fresh adjudication as per the outcome of the quantum appeal. On the other hand, the Ld. DR has relied upon the orders of this authorities below.

4. I have considered the rival submissions as well as relevant material on records. The AO levied the penalty u/s 27(1)(c) in respect of the addition made under Section 40A(3), on account of cash deposit in the bank account as well as household existence. The assessee challenged the additions made by the Assessing Officer before the CIT(A) in quantum appeal but the appeal of the assessee was dismissed by the CIT(A) for non-prosecution it. The Varanasi Bench of this Tribunal vide order dated 22nd Nov., 2011 in has set aside the issue to the record of the CIT(A) for fresh adjudication in Para 3 and 4 as under: 3. Heard, I find that the CIT(A) has demised the appeal without providing proper opportunity to the assessee. Moreover, he has not decided the appeal after discussing in detail, his reasons for agreeing with the assessment order. In this Asstt. Year-2009-10 view of the matter, another opportunity of hearing requires to be given to the assessee to represent his case fully before the Ld. CIT(A). Even otherwise, it is true [‘S. Velu Palandar Vs. DCIT’ 83 ITR 683 (Mad.) and ‘Ms. Swati Pawa vs. Dy. CIT’. 175 ITD 622 (Dell) and incumbent on the ld. CIT(A) to decide an appeal on merit even in the absence of any representation before them. 4. in view of the above, the matter is remitted to the file of the Ld. CIT(A0 to be decided afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the ld. CIT(A). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. Thus, it is clear that after the order of this Tribunal in quantum appeal the addition against which the penalty u/s 27(1)(c) was levied by the Assessing Officer do not exist.

5. Accordingly, in the facts and circumstances of the case, the matter is set aside to the record of the CIT(A) for deciding the same afresh as per the outcome of the quantum proceedings.