GOURI SHANKAR CHAGANAM,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-11(1), HYDERABAD

The assessee has raised three grounds in his appeal and the same are reproduced herein below for reference:- 1. “The order of the Ld. CIT (A) is not only erroneous both on facts and in law but is without application of mind as the same is passed without dealing with entire submissions.

The Ld. CIT (A) erred in confirming the penalty of Rs. 1,29,869/- levied U/s. 271(1)(c) without appreciating the submissions that it was due to inadvertence that interest on income tax refund was not admitted and the Ld. CIT (A) failed to appreciate that the Supreme Court in the case of Price Water has held that the penalty could not be levied for inadvertent omission.” 3. The brief facts of the case are that the assessee is an individual engaged in the profession as Civil Contractor filed his return of income for the AY 2014-15 on 4/11/2014 admitting total income of Rs. 13,07,030/-. Initially the return was processed U/s. 143(1) of the Act and thereafter the case was selected for limited scrutiny and thereafter the assessment was completed on 22/12/2016 wherein the Ld AO made addition for Rs 3,82,080/- towards interest earned on Income Tax Refunds U/s. 244A of the Act which was omitted to be disclosed by the assessee in the return of income and thereby failed to offer it for tax. Subsequently, the Ld. AO invoked the provisions of section 271(1)(c) of the Act and levied minimum penalty of Rs. 1,29,869/-. On appeal, the Ld. CIT (A) passed an ex-parte order confirming the penalty levied by the Ld. AO based on the written submissions filed by the assessee as the assessee had failed to appear before the Ld. CIT (A) though several opportunities were provided to him.

At the outset, we find that the assessee has raised certain grounds before us which were not raised before the Ld. CIT (A). Moreover, we find that the assessee has failed to appear before the Ld. CIT (A) though the Ld. CIT (A) had granted several opportunities before him, but only preferred to submit a written submission before the Ld. CIT (A). In this circumstance it is obvious that, since the grounds raised before us by the assessee were not raised before the Ld. CIT (A) the Ld.CIT(A) did not have an opportunity to consider the same therefore, We are of the considered view that the matter is required to be revisited by the Ld. CIT (A) afresh. Hence, in the interest of justice, we hereby remit the matter back to the file of the Ld. CIT (A) for de novo consideration. We also strongly advise the assessee and his Counsel to promptly co-operate and appear before the Ld. CIT (A) in order to assist him render appropriate justice in accordance with law and merit and expedite the proceedings before him.