BADRI PRASAD RAM GOPAL DALL MILL,ALWAR vs. ITO, ALWAR

The hearing of the matter was scheduled through video conferencing in view of the ongoing Covid-19 pandemic situation prevailing in the country. None has appeared on behalf of the assessee however, an adjournment application was received by the Registry through email where the A/R of the assessee has sought adjournment in the matter stating that the assessee is contemplating to opt for Vivad Se Vishwas Scheme. Given that nothing has been placed on record in terms of any specific time by when the assessee will move its petition under the VIVAD SE VISHWAS SCHEME and the fact Badri Prasad Ram Gopal Dall Mill Vs. ITO, Alwar that the appeal was filed way back in June, 2017 which was dismissed vide order dated 02.06.2017 and thereafter, recalled vide order dated 10.11.2017 and since then, the hearing in the matter has been adjourned from time to time, we find that no useful purpose would be served in adjourning the matter any further and it was accordingly decided to hear the ld. DR and decided the matter based on material available on record.

Briefly stated, the facts of the case are that the penalty order u/s 271(1)(c) of the Act was passed on 20.03.2015 wherein the Assessing Officer has levied penalty u/s 271(1)(c) of the Act amounting to Rs. 12,94,565/- and the relevant findings of the Assessing Officer read as under:- “As per brief facts of the case, a survey u/s 133A was conducted at the business premises of the assessee on 05.03.1999 and during the course of survey proceedings a diary named “Geeta Dayanandini”, 1998 addition (pertaining to period 1.1.1998 to 31.12.1998) was found and impounded. As such diary was belongs to firms and transaction recorded are pertained to firm. On going through the transaction recorded it has noticed that the assessee firm have taken loans in cash from various persons during the period 1.04.1998 to 31.03.1999 and paid interest thereto. The assessee admitted during original assessment that credit entry shown in the diary were not shown in regular books of accounts. The partners of firm accepted that they were unable to get these cash creditors verified and thus accepted the same as undisclosed income of the assessee firm for the year under consideration.

Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and has submitted that the Assessing Officer has levied the penalty pursuant to the order passed by the ld. CIT(A), however, subsequently, the assessee carried the matter in appeal before the Tribunal in and 492/JP/2019 which has been disposed off vide order dated 18.02.2016 and the effect of the order so passed by the Tribunal has not been given effect to by the AO while passing the penalty order. It was submitted that pursuant to Tribunal order, the Assessing Officer has passed the appeal effect order dated 19.09.2016 wherein the assessed income has been determined at Rs. 17,38,847/- as against assessed income of Rs. 36,98,757/- considered by the Assessing Officer while levying the penalty. It was further submitted that the Assessing Officer’s satisfaction as warranted u/s 271(1)(c) of the Act for initiating the penalty proceedings has not been recorded in the assessment order and unless requisite satisfaction is recorded, the jurisdiction to initiate the penalty proceedings cannot be exercised. Regarding peak cash credit of Rs. 19.60 lakhs, it was submitted that the same has been voluntarily surrendered by the assessee, however, the Assessing Officer has not brought on record any corroborative evidence circumstances in the penalty order to prove that the assessee has concealed the particulars of his income. Regarding addition towards investment in unrecorded purchases, it was submitted that again no satisfaction has been recorded vis-a-vis the said addition by the Assessing Officer for initiating the penalty proceedings while passing the assessment order. It was submitted that in absence of satisfaction so recorded by the Assessing Officer, penalty on the said addition cannot be levied. 3 ITA No. 305/JP/2017 Badri Prasad Ram Gopal Dall Mill Vs. ITO, Alwar 5. We now refer to the findings of the ld. CIT(A) which read as under:

That the assessee firm is engaged in the business of trading of chana dal, chana churi and chana chhilka during the year under consideration.

We therefore find that the various contentions advanced by the assessee as we have noted in para 4 supra have not been adequately dealt with by the ld CIT(A) while disposing off the assessee’s appeal. Where the assessee has carried the matter in appeal before the Tribunal in the quantum proceedings and the quantum additions as so claimed by the assessee have been reduced and which forms the basis for levy of penalty, the consequent quantum of penalty will also undergo a change, however, we find that there Badri Prasad Ram Gopal Dall Mill Vs. ITO, Alwar is no finding recorded by the ld CIT(A) in this regard. Similarly, the assessee has raised contentions regarding lack of satisfaction for initiating the penalty proceedings while completing the assessment proceedings, to our mind, there are relevant considerations which needs to be examined and disposed off before the levy of penalty is confirmed. We accordingly set-aside the matter to the file of the ld CIT(A) to examine the various contentions so raised by the assessee and decide the matter afresh after providing reasonable opportunity to the assessee. The assessee is also directed to appear before the ld. CIT(A) and file the necessary information and documentation in support of its contentions, as so advised and ensure in timely completion of the appellate proceedings. This will not prejudice the right of the assessee in availing of the aforesaid settlement scheme and where the assessee so decides finally to opt for the scheme and has taken necessary steps as so specified therein, it can bring the same to the notice of the ld CIT(A) who shall then decide and take appropriate action as per law.