HIREN HARAKHCHAND RAMBHIA,MUMBAI vs. ACIT RANGE 27(1), MUMBAI

The assessee has raised the following grounds of appeal: 1. “On facts and circumstances of the case and in law the order passed us 271D is bad in law as there is no proper recording of satisfaction by appropriate authority or initiating penalty proceedings us 271 D and hence the said penalty order needs to be quashed.

Brief facts of the case are that the assessee is an individual and pursuant to search and survey action u/s. 132 of the Act carried out in the case of M/s. Evergreen Enterprises, where statement of Mr. Nilesh Bharani, one of the partners of M/s. Evergreen Enterprises and Jagdish T. Ramani and Ors. stated that several individual and business concern has borrowed cash loan through M/s. Evergreen Enterprises, in which the assessee was one of the parties who had borrowed cash loan of Rs. 1,22,00,000/- from Mr. Nilesh Bharani. The learned Assessing Officer ('ld. A.O.' for short) reopened the assessee’s case vide notice u/s. 148, where the assessee had filed his return of income dated 17.09.2019, in response to the said notice declaring an income of Rs. 6,62,472/- on presumptive basis, declaring turnover of Rs. 40,54,595/- and declared gross profit u/s. 44AD amounting to Rs. 9,43,672/-. The ld. AO had passed the assessment order (A.Y. 2012-13) Hiren Harakhchand Rambhia u/s. 147 r.w. 144B of the Act dated 10.01.2022, determining total income at Rs. 6,62,472/- and initiated penalty proceeding u/s. 271D of the Act. The ld. AO then passed the penalty order u/s. 271D of the Act, dated 29.07.2022, levying a penalty amounting to Rs. 1,22,00,000/- towards the cash loan borrowed from Mr. Nilesh Bharani, vide an ex parte order on the ground that the assessee has failed to substantiate the said transaction.

Aggrieved the assessee was in appeal before the first appellate authority, challenging the impugned penalty order and the ld. CIT(A) vide an ex parte order dated 02.09.2024, upheld the penalty levied by the ld. AO on the ground that the assessee has failed to comply with the notices issued by the first appellate authority.

The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).

We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the penalty levied by the ld. A.O. before the first appellate authority but has been non-compliant throughout the appellate proceeding. Even before the ld. AO, the assessee has been constantly been non- compliant and has failed to cooperate with the proceedings.

The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee may be given one more opportunity to present his case before the first appellate authority and that the assessee has got a good case on the merits.

The learned Departmental Representative (‘ld. DR’ for short) vehemently objected to remanding the issue back to the ld. CIT(A) for the reason that the assessee has (A.Y. 2012-13) Hiren Harakhchand Rambhia deliberately been non-compliant and has not availed several opportunities given by the lower authorities.

In the above facts of the case, we deem it fit to extend one more opportunity to the assessee to appear before the first appellate authority along with his submissions with documentary evidences in support of his contentions, by adhering to the principles of natural justice and interest of justice dispensation. The ld. CIT(A) is directed to decide the issue based on the submission of the assessee and on the merits of the case and in accordance with law. The assessee is directed to strictly comply with the proceedings without any undue delay from his side.