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आदेश/Order
PER N.K. SAINI, VICE PRESIDENT
This is an appeal filed by the Assessee against the order dated 5.11.2018 of the Ld. CIT(A)-3, Gurgaon.
Following grounds have been raised in this appeal:-
That the order of CIT(A) -3 is not a speaking order, is erroneous, arbitrary, opposed to law and facts of the case.
2. That the Ld. Assessing Officer has grossly erred in levying penalty under section 271D amounting to Rs. 16,50,000/- despite the fact that the amounts were received by way of journal entries in the books of the accounts of the assessee company and the assessee
company had not accepted any cash loans or deposits from its director. 3. That the appellant craves leave to add, to; alter, to amend or vary from the aforesaid grounds of appeal on or before the time of hearing of the said appeal. Vide Ground No.1, the grievance of the assessee relates to the non-speaking 3. order passed by the Ld. CIT(A).
The facts of the case in brief are that a search u/s 132(1) of the Income Tax Act, 1961 (herein referred to ‘the Act') was conducted at the residential premises of Smt. Priya Arora and her husband Shri Manish Arora on 17.11.2013. Smt. Arora is one of the directors holding 50% shares of the assessee company. During the course of search, one document was seized from the residence of Shri Manish Arora in the form of a sale agreement for 3.5 kanals of land in Kangra District between Smt. Priya Arora and Shri Nek Ram resident of Rakkar, Mauja Sidhbari, Tehsil Dharmshala, District Kangra, Himachal Pradesh. As per this agreement, total sale consideration for the land was fixed at Rs. 31,50,000/-. As per the seized document, following payments had been made by Smt. Priya Arora to Shri Nek Ram, for the purchase of land in cash during the year relevant to the assessment year under consideration.
Date Amount 28.6.2013 Rs. 8,00,000/- 16.10.2013 Rs. 8,50,000 Total Rs. 16,50,000/- During the course of assessment proceedings, it was stated that the aforesaid agreement was entered into by Smt. Priya Arora on behalf of the assessee company because as per Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act 1972, only a bonafide Himachali could purchase the land outside the municipal limits and that for the outsiders, sanction from the cabinet of Himachal Pradesh was required. It was stated that agreement was entered into on behalf of the assessee company, so as to make it legally secure to purchase and transfer the land in the name of the assessee company subsequently and that the interim arrangement was done in the event the seller backed out or created any illegal hurdle.
4.1 The Assessing Officer was of the view that the assessee company had accepted the loan of Rs. 16,50,000/- in cash during the previous year relevant to the assessment year under consideration from Smt. Priya Arora in violation of provisions of section 269SS of the Act, therefore, the penalty notice u/s 271D of the Act read with section 269SS of the Act was issued to the assessee. The Assessing Officer did not find merit in the written submission of the assessee which has been incorporated in para 3 of the penalty order dated 24.4.2017, for the cost of repetition, the same is not reproduced herein. The Assessing Officer levied the penalty of Rs. 16,50,000/- u/s 271D of the Act.
Being aggrieved, the assessee carried the matter to the Ld. CIT(A) who passed the impugned order ex-parte and sustained the penalty levied by the Assessing Officer. Now the assessee is in appeal.
The Ld. Counsel for the assessee, submitted that no notice for hearing was served upon the assessee and that the Ld. CIT(A) had not passed a speaking order and simply reproduced the contents of the penalty order passed by the Assessing Officer & the grounds of appeal raised by the assessee.
6. In his rival submissions, the Ld. DR supported the impugned order passed by the Ld. CIT(A).
We have considered the submissions of both the parties and perused the material available on record. In the present case it is an admitted fact that the Ld. CIT(A) passed the impugned order ex-parte. He has simply mentioned that the notices for hearing were issued to the assessee on 29.8.2018, 26.9.2018 and 18.10.2018, however, nobody appeared in response to those notices. In the instant case, the Ld. CIT(A) nowhere mentioned that the notices of hearing were served upon the assessee. It is also noticed that Ld. CIT(A) reproduced the entire penalty order in Para 3 and the grounds of appeal raised by the assessee company in para 5.4.1 of the impugned order and thereafter he simply mentioned that he agreed with the contention of the Addl. CIT, Central Range, Chandigarh and held that on the facts of the case penalty u/s 271D was leviable.
7.1 It is well settled that nobody should be condemned unheard as per the maxim “audi alteram partem”. We therefore, keeping in view the principles of natural justice and the facts of the present case as discussed hereinabove, set aside impugned order passed by the CIT(A) ex-parte without brining on record that the notices for hearing were served upon the assessee, to decide the issue afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.