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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 08.04.2019 of the Ld. Commissioner of Income Tax (Appeals)-7, New Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2011-12.
The assessee has raised the following grounds:
“1. That the Ld. CIT(A) erred both on facts and in law in confirming the penalty of Rs. 29,69,501/- imposed by the AO u/s 271(1)(c) of the Income Tax Act 1961 (“the Act”).
2. That the Ld. CIT(A) failed to appreciate that the genuineness of the expenditure having not been doubled either by the AO or by the Ld. CIT(A) in the quantum appeal, the penalty u/s 271(1)(c) could not be sustained on the ground that there was no evidence of TDS being deposited.
3. That the Ld. CIT(A) grossly erred in not dealing with the detailed written submissions filed and oral arguments advanced supported with evidence and chose to co firm the order of the AO in a mechanical manner. 4. That the CIT(A) erred in confirming the penalty on the disallowance of Rs. 75,83,824/- which had been restored to the AO for the limited purpose of verifying the TDS. The CIT(A) did not deal with the argument of the appellant that it had not received any order giving appeal effect inspite of adducing requisite evidence before the AO. 5. Without prejudice to all other submissions the order of penalty u/s 271(1)(c) was not sustainable since the notice u/s 274/271(1)(c) was issued in a mechanical manner without application of mind.”
Briefly stated, the assessee company is engaged in the business of consultancy in medical field. For AY 2011-12, the assessee filed its return declaring loss of Rs. 3,12,06,323/- on 30.09.2011. It was revised on 06.01.2012 declaring same loss. The reason for revising the return was that TDS of Rs. 3,11,12,914/- was inadvertently claimed in the original return whereas actual TDS claim of the assessee comes to Rs. 18,09,000/-. The case was selected for scrutiny. Statutory notices issued were complied with and requisite details were furnished. The Ld. Assessing Officer (“AO”) completed the assessment computing total loss at Rs. 2,24,69,930/- as against loss of Rs. 3,12,06,323/- returned including therein addition of Rs. 75,83,824/- on account of excessive claim of salary in the name of different persons and addition of Rs. 11,52,572/- being difference between salary claimed in the name of four persons as per P&L account and salary paid to them as per Form No. 16 meaning thereby that TDS to that extent was not deducted. The Ld. AO initiated penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 (the “Act”).
In quantum appeal, the Ld. CIT(A) allowed partial relief on the addition of Rs. 75,83,824/- and directed the Ld. AO to sustain it if evidence/details are not produced. He confirmed the addition of Rs. 11,52,572/-. Thereafter, the Ld. AO passed penalty order on 31.03.2018 imposing penalty of Rs. 29,69,501/- under section 271(1)(c) of the Act for furnishing inaccurate particulars of income.
Against the penalty order, the assessee filed appeal before the Ld. CIT(A) who confirmed the impugned penalty against which the assessee is in appeal before the Tribunal.
Hearing was fixed on 07.06.2022, 17.11.2022, 23.11.2022 and finally on 08.02.2023. None appeared for and / or on behalf of the assessee. The Revenue was represented on all the above dates by the Ld. DR. We, therefore, proceed to decide the appeal ex-parte on merits after hearing the Ld. DR.
We have gone through the penalty order as also the appellate order of the Ld. CIT(A). Perusal of para 3.3 of the Ld. CIT(A)’s order would reveal that a letter was sent to the assessee on 24.01.2017 to produce the requisite details but no one appeared. However, the assessee’s submission made during appellate proceedings states that the assessee had responded to the said letter along with annexures running into 30 pages. The grievance of the assessee is that the Ld. CIT(A) did not deal with the detailed written submissions filed and oral arguments advanced supported with evidence and confirmed the order of the AO. On the fact and in the circumstances of the case, we deem it fit to set aside the order of the Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) to decide the issue afresh after due consideration of the submissions of the assessee already in his records and after allowing reasonable opportunity of hearing to the assessee as well as to the Ld. AO. This will, in our view, meet the ends of justice. We order accordingly.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.