V.S.J MARKETING PRIVATE LIMITED,SALEM vs. DCIT, CIRCLE - 1, SALEM

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ITA 574/CHNY/2022Status: DisposedITAT Chennai09 August 2023AY 2010-20114 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's non-cooperation throughout the proceedings, including failure to respond to penalty notices, indicated willful concealment of income. The Tribunal found no prejudice caused to the assessee and upheld the penalty.

What were the facts?

The assessee, a defunct company, failed to file a return of income. The Assessing Officer made a best judgment assessment and initiated penalty proceedings under Section 271(1)(c) for alleged concealment of income. The penalty was confirmed by the CIT(A) despite the assessee's contention of a vague notice.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when the notice issued is alleged to be vague, and if non-cooperation in proceedings amounts to concealment of income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 144,Section 147,Section 264

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

आयकर अपीलीय अिधकरण “ए” �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI माननीय �ी महावीर िसंह, उपा ! एवं माननीय �ी मनोज कुमार अ%वाल ,लेखा सद( के सम!। BEFORE HON’BLE SHRI MAHAVIR SINGH, VP AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ (िनधा)रण वष) / Assessment Year: 2010-11) M/s. V.S.J. Marketing Private Limited DCIT बनाम 13/145, Ganapathy Nagar, Circle-1, / Vs. Ganapathypalayam, Salem-636 030. Salem. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AACCV-5410-A (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri S. Sridhar (Advocate)-Ld.AR � थ�कीओरसे/Respondent by : Shri R. Mohan Reddy (CIT)-Ld.DR सुनवाईकीतारीख/Date of Hearing : 01-08-2023 घोषणाकीतारीख /Date of Pronouncement : 09-08-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1.

Aggrieved by confirmation of penalty u/s 271(1)(c) for Rs.140.86 Lacs for Assessment Year (AY) 2010-11, the assessee is in further appeal before us. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 16-06-2022 in the matter of impugned penalty levied by Ld. Assessing Officer [AO] u/s. 271(1)(c) of the Act on 28-06-2019. In the penalty order, the penalty has been levied on the allegation that the assessee concealed particulars of its income. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.

2.

The Ld. AR, at the outset, drew our attention to legal ground no.3 and submitted that in the absence of specific charge, no penalty could be levied. Reliance has been placed on the decision of this bench, the copies of which have been placed on record. The Ld. CIT-DR submitted that the assessee did not file return of income and it was clear cut case of concealment of income. Reliance has been placed on the decision of Hyderabad Tribunal in the case of Moola Padmaja vs. ACIT (ITA No.234/Hyd/2022 dated 22.02.2023 which has confirmed the penalty under similar circumstances. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Proceedings before lower authorities 3.1 The assessee was assessed on best judgment basis u/s 144 r.w.s. 147 of the Act on 28.08.2018. The assessee was stated to be defunct company at the time of reopening of assessment. In response to notice u/s 148, the assessee did not file any return of income. The Ld. AO made best judgement assessment and estimated income of Rs.469.63 Lacs on the basis of peak credit in the bank accounts. In the assessment order, the penalty was levied by Ld. AO by stating that ‘Penalty proceedings u/s 271(1)(c) are initiated separately’. In the meanwhile, the assessee preferred petition u/s 264 against quantum addition which got rejected. 3.2 Subsequently, a notice u/s 271(1)(c) was issued on 28.12.2018 wherein Ld. AO alleged as under: - “**have concealed the particulars of your income or furnished inaccurate particulars of such income.”

However, the assessee remained unresponsive and did not attend penalty proceedings. Left with no option, Ld. AO levied impugned penalty by observing that the assessee had concealed his particulars of income and the mere act of non-cooperation in all the proceedings, clearly tantamount to willful concealment of income. 3.3 During appellate proceedings, the assessee assailed the penalty on the ground that the notice was vague and an invalid notice. The Ld. CIT(A), applying the ratio of decision of Hon’ble High Court of Madras in Sundaram Finance Ltd. (403 ITR 407) in preference to the decision in Babuji Jacob (430 lTR 259), confirmed the impugned penalty against which the assessee is in further appeal before us. Our findings and Adjudication 4. From the fact, it emerges that the assessee has remained non- cooperative during assessment proceedings as well as during penalty proceeding. The assessment was framed on best judgment basis and the same has attained finality by way of rejection of assessee’s application u/s 264. The assessee did not file any return of income for this year. During penalty proceedings also, a show cause notice was issued to the assessee to defend the levy of penalty. However, the assessee did not bother to reply to the same and failed to make any submissions. Before Ld. CIT(A) as well as before us, the plea raised by the assessee is that the show cause notice was vague and an invalid notice. Thus the assessee is taking shelter on the same notice which he has not even bothered to respond during penalty proceedings. In our considered opinion, no prejudice has been caused to the assessee in such a case. The assessee has remained non-cooperative in all the proceedings. The cited case law of Hyderabad Tribunal supports the case of the revenue wherein similar fact exists. The bench, in para-23 of the order, considered Explanation-3 to Sec.271(1)(c) which provide that if a person fails to furnish return of income then the assessee is deemed to have concealed the particulars of his income. Accordingly it was held that it was clear case of concealment of income and penalty was justified. Even on merits, the assessee has no case since the assessment has attained finality confirming the quantum addition as made by Ld. AO. Therefore, we do not find any reason to interfere in the impugned order.

5.

The appeal stand dismissed.

Order pronounced on 09th August, 2023.

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