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Facts
The assessee's appeals concerned penalty orders for assessment years 2012-13 to 2020-21, relating to additions made by the Assessing Officer (AO). The assessee argued that the additions themselves were not sustainable as they were based on estimate and not incriminating material. The CIT(A) had passed ex-parte orders as the assessee failed to furnish evidence.
Held
The Tribunal noted that the assessee failed to furnish documentary evidence to support their contentions before the CIT(A). However, considering the interest of substantial justice and the fact that no original return was filed, the Tribunal restored the matter to the CIT(A) to provide one more opportunity for the assessee to present evidence and raise additional grounds.
Key Issues
Whether the penalty levied under Section 271(1)(c) is sustainable when the underlying additions are disputed and the assessee failed to provide evidence before the lower appellate authority?
Sections Cited
271(1)(c), 143(3), 153A, 250
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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this therefore, same were heard together and disposed off by way of this consolidated order.
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. Before us, the Ld. counsel for the . Before us, the Ld. counsel for the assessee has filed an additional ground in all these appeals as s filed an additional ground in all these appeals as s filed an additional ground in all these appeals as under:
1) The Learned CIT(A) has erred in confirming the action of the 1) The Learned CIT(A) has erred in confirming the action of the 1) The Learned CIT(A) has erred in confirming the action of the Learned Assessing officer in levying penalty on the addition Learned Assessing officer in levying penalty on the addition Learned Assessing officer in levying penalty on the addition made in the assessment order, without appreciating the fact made in the assessment order, without appreciating the fact made in the assessment order, without appreciating the fact that these addition itself are not sustainable in the order addition itself are not sustainable in the order addition itself are not sustainable in the order passed u/s. 143(3) r.w.s 153A of the Income passed u/s. 143(3) r.w.s 153A of the Income Tax Act, Act, 1961.
Before us, the ld. counsel for the assessee submitted that no Before us, the ld. counsel for the assessee submitted that no Before us, the ld. counsel for the assessee submitted that no incriminating material incriminating material has been referred in the assessment order referred in the assessment order and additions have been made merely on the estimate basis. been made merely on the estimate basis. Therefore, the addition itself is not sustainable in law though the Therefore, the addition itself is not sustainable in law though the Therefore, the addition itself is not sustainable in law though the assessee did not dispute the addition in quantum proceedings. The assessee did not dispute the addition in quantum proceedings. The assessee did not dispute the addition in quantum proceedings. The Ld. counsel for the assessee accordingly submitted that penalty Ld. counsel for the assessee accordingly submitted that penalty Ld. counsel for the assessee accordingly submitted that penalty levied by the AO is not sustainable, b is not sustainable, both on the ground of no oth on the ground of no incriminating material as well as incriminating material as well as addition made on the estimate ion made on the estimate basis. But we find that the Ld. CIT(A) ut we find that the Ld. CIT(A) has passed the order ex passed the order ex-parte qua the assessee as the assessee failed to furnish the assessee failed to furnish any documentary any documentary evidence in support of its contention. The relevant part of the support of its contention. The relevant part of the support of its contention. The relevant part of the finding of the Ld. CIT(A) in assessment year 2012 finding of the Ld. CIT(A) in assessment year 2012-13 is reproduced 13 is reproduced as under:
“6.0 Opportunity of hearing granted: “6.0 Opportunity of hearing granted:
Chintpurni School Educational Society Chintpurni School Educational Society 3 to 6591/MUM/2024 to 6591/MUM/2024
6.1 During the course of appellate proceedings, a number of 6.1 During the course of appellate proceedings, a number of 6.1 During the course of appellate proceedings, a number of hearing notices u/s 250 of th hearing notices u/s 250 of the Act were issued to the appellant. It e Act were issued to the appellant. It is pertinent that in order to decide this appeal in a timely manner is pertinent that in order to decide this appeal in a timely manner is pertinent that in order to decide this appeal in a timely manner a number of notices/ communications through ITBA portal were a number of notices/ communications through ITBA portal were a number of notices/ communications through ITBA portal were sent to the appellant, viz. communications dated 16.05.2023, sent to the appellant, viz. communications dated 16.05.2023, sent to the appellant, viz. communications dated 16.05.2023, 07.06.2023, 14.09.2023, 26. 07.06.2023, 14.09.2023, 26.09.2023, 09.10.2023, 19.10.2023, 09.2023, 09.10.2023, 19.10.2023, 01.12.2023, 22.12.2023. However, there has been no response 01.12.2023, 22.12.2023. However, there has been no response 01.12.2023, 22.12.2023. However, there has been no response from the appellant till date except the written note filed on appeal from the appellant till date except the written note filed on appeal from the appellant till date except the written note filed on appeal matter. There is no gainsaying that once the appeal is filed by the matter. There is no gainsaying that once the appeal is filed by the matter. There is no gainsaying that once the appeal is filed by the appellant, it is obligator appellant, it is obligatory on its part to purposefully and co y on its part to purposefully and co- operatively pursue the same in a worthwhile manner, which the operatively pursue the same in a worthwhile manner, which the operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly appears that the appellant has evidently failed to do. It clearly appears that the appellant has evidently failed to do. It clearly appears that the appellant has not bothered to pursue this appeal in any appellant has not bothered to pursue this appeal in any appellant has not bothered to pursue this appeal in any productive manner. Hence, in view o productive manner. Hence, in view of the aforesaid, the instant f the aforesaid, the instant appeal is appeal is adjudicated appeal is adjudicated adjudicated and disposed off, on the and disposed off, and disposed off, on on the the basis basis basis documents/details available on record, which is as under. documents/details available on record, which is as under. documents/details available on record, which is as under. 6.2 I have carefully perused the facts of the appellant's case and I have carefully perused the facts of the appellant's case and I have carefully perused the facts of the appellant's case and the order of the Assessing Officer. It is observe the order of the Assessing Officer. It is observed from the facts of d from the facts of the case that the appellant has failed to furnish any the case that the appellant has failed to furnish any the case that the appellant has failed to furnish any documentary evidence to the issue raised by him in the appeal in documentary evidence to the issue raised by him in the appeal in documentary evidence to the issue raised by him in the appeal in connection with penalty levied by the AO on additions made on connection with penalty levied by the AO on additions made on connection with penalty levied by the AO on additions made on account of receipt of Rs 4,10,00,000/ account of receipt of Rs 4,10,00,000/-. Considering the . Considering the above facts, I decide the appeal on the basis of facts mentioned by AO facts, I decide the appeal on the basis of facts mentioned by AO facts, I decide the appeal on the basis of facts mentioned by AO in the penalty order and facts submitted by appellant as note on in the penalty order and facts submitted by appellant as note on in the penalty order and facts submitted by appellant as note on appeal matter alongwith appeal matter alongwith Form No. 35.” 3.1 The Ld. counsel for the assessee gave an . counsel for the assessee gave an undertaking that undertaking that assessee will file all the documentary evidence and shall be all the documentary evidence and shall be all the documentary evidence and shall be represented before the Ld. CIT(A) if the matter is restored back to represented before the Ld. CIT(A) if the matter is restored back to represented before the Ld. CIT(A) if the matter is restored back to him. We find that in the case no original return of income was filed him. We find that in the case no original return of income was filed him. We find that in the case no original return of income was filed and only returns were and only returns were filed in response to section 15 filed in response to section 153A of the Act. In the facts and circumstances of the case and in the interest of cts and circumstances of the case and in the interest of cts and circumstances of the case and in the interest of substantial justice, we feel it appropriate to provide one more substantial justice, we feel it appropriate to provide one more substantial justice, we feel it appropriate to provide one more opportunity to the assessee to file all necessary documentary opportunity to the assessee to file all necessary documentary opportunity to the assessee to file all necessary documentary evidence to support its claim. The assessee shall be at liberty to evidence to support its claim. The assessee shall evidence to support its claim. The assessee shall raise the additional ground before the Ld. CIT(A) which will be the additional ground before the Ld. CIT(A) which will be the additional ground before the Ld. CIT(A) which will be admitted/adjudicated in accordance with law. It is needless to admitted/adjudicated in accordance with law. It is needless to admitted/adjudicated in accordance with law. It is needless to Chintpurni School Educational Society Chintpurni School Educational Society 4 to 6591/MUM/2024 to 6591/MUM/2024 mention that both the assessee and the Assessing Officer shall be mention that both the assessee and the Assessing Officer shall be mention that both the assessee and the Assessing Officer shall be afforded adequate opportunity have been heard. The grounds raised afforded adequate opportunity have been heard. The grounds raised afforded adequate opportunity have been heard. The grounds raised by the assessee are allowed for statistical purposes. the assessee are allowed for statistical purposes.
In the result, all the appeals of the assessee are allowed for In the result, all the appeals of the assessee are allowed for In the result, all the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open Court on nounced in the open Court on 08/04/2025. /04/2025.