SHAILESH AMRUTLAL KOTECHA,,RAJKOT-GUJARAT vs. THE INCOME TAX OFFICER, WARD-2(3),, RAJKOT-GUJARAT

The brief fact of the case is that CIT, Rajkot has passed order u/s. 263 on 28th December, 2010 and held that the order passed by the assessing officer u/s. 143(3) of the act on 28th December, 2007 was erroneous and prejudicial to the interest of revenue, therefore, the assessment was set aside to the assessing officer for framing the same de-novo after proper inquiry and verification of the issues pertaining to addition to fixed assets, correctness of the commission offered as per TDS certificate and genuineness of unsecured loan obtained from 13 persons. During the course of assessment proceedings in consequence to order u/s. 263, the assessing officer has issued a number of letters and notices to the assessee, however, the assessee has neither attended nor furnished any detail as called for by the assessing officer, therefore, the assessing officer has finalized the assessment on the basis of material on record. The assessing officer has noticed that in the fixed asset schedule, the assesse has shown addition of five assets totaling to the amount of Rs. 1,56,736/- as mentioned at page no. 3 of the assessment order mainly on the basis of cash mode of payment for acquiring these assets. The assessee was asked to furnish the complete detail of acquiring these assets. However, the assessee has not made any compliance, therefore, the assessing officer has added the amount of Rs. 1,56,736/- as

Aggrieved assessee has filed appeal before the ld. CIT(A). The appeal of the assessee was dismissed by the ld. CIT(A).

During the course of appellate proceedings before us, the adjournment application was rejected after taking into consideration that the assessee has filed this appeal in 2014 and the matter was adjourned 10 times and the assessee has never furnished detail and information. After hearing the ld. departmental representative and considering the material on record, it is noticed that during the course of assessment proceedings, the assessee has failed to furnish any single evidence to explain the addition made to fixed asset to the amount of Rs. 1,56,736/- and differences in the commission receipt reported in the p & L account and the amount appearing in the TDS

This appeal has been filed by the assessee against the order of ld. CIT(A) in confirming the penalty levied on the additions as cited above in ITA No. 146/Rjt/2014. The total amounts of penalty in respect of three additions are as under:-

The assessee has preferred the matter before the ld. CIT(A). The ld. CIT(A) has confirmed the penalty reiterating the facts reported by the assessing officer.

During the course of appellate proceedings before us, the ld. counsel has filed adjournment application which was rejected for the reason mentioned in the quantum addition appeal filed by the assessee as adjudicated above vide ITA No. 146/Rjt/2014.

We have heard the ld. departmental representative and perused the material on record. It is noticed that in this case, the assessing officer has made aforesaid three additions since the assessee has failed to furnish the relevant details during the course of assessment proceedings because of such default the quantum addition is justified, however, for levy of penalty u/s. 271(1)(c), the assessing officer has to substantiate that assessee has concealed the particulars of his income or furnished inaccurate particular of income. The assessee has simply levied the penalty stating that there was no response from the assessee without substantiating that assessee has concealed the particulars of income. It is also noticed that ld. CIT(A) has simply upheld the order of assessing officer for levying penalty without stating the points for determination that assessee has concealed the particulars of income. In the light of the above fact, we consider that the

In the combined result, appeal ITA 146/Rjt/2014 is dismissed and appeal ITA 153/Rjt/2014 is allowed Order pronounced in the open court on 23-09-2019