ERIC MARIO RAJIV FONSECA,PUNE vs. INCOME-TAX OFFICER, (IT) -4, PUNE

आदेश / ORDER PER ANIL CHATURVEDI, AM :

Assessee is an individual and stated to be engaged in share trading business. Assessee electronically filed his return of income for A.Y. 2014-15 on 28.08.2015 declaring total income at Rs.61,090/-. The case

was selected for scrutiny and thereafter assessment was framed u/s

143(3) of the Act vide order dt.27.12.2016 and the total income was

determined at Rs.61,090/-, being the amount returned by assessee. In

this case, AO initiated penalty proceedings u/s 271A, 271(1)(c), 271B of

the Act. Aggrieved by the order of AO, assessee carried the matter before

Ld.CIT(A), who vide ex-parte order dt.29.04.2019 (in appeal

No.PN/CIT(A)-13/ITO(IT)-4, Pune/465/2016-17) dismissed the appeal of

the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in

appeal and has raised the following grounds :

“1. The learned CIT (A) erred in confirming the initiation of the penalty proceedings upon the assessee u/s 271A, 271B and section 271(1) (c) of the I.T. Act 1961. 2. The learned CIT (A) erred in dismissing the appeal on the grounds of non-attendance by the assessee or representative, in spite of submission on a day before the hearing date and submitting the application of adjournment on the said day. 3. The learned CIT (A) erred in not giving the enough opportunity of being heard to the assessee and hence denying the natural justice, which is fundamental right of the assessee. 4. The learned CIT (A) erred in confirming the stand taken by the Ld. Assessing Officer while stating that "this entire issue of the Appellant being unaware of the said high value share trading transactions came into light only after he was confronted by the AO. Had the AO not enquired into the said transactions, the Appellant would have moved caught free" and that "since the Appellant is an educated NRI individual rendering his services in a foreign country, hence, there cannot be a doubt on the fact that the Appellant was unaware of such transactions" 5. The learned CIT (A) erred in not considering the fact that The FIR was launched on 23/07/2016, i.e. well before the initiation of the scrutiny. Also as the transactions were made fraudulently there was no question of revising the earlier filed returns, hence Hon. CIT (A) has clearly misunderstood the intention of the assessee.

of assessee; AO noted that assessee was engaged in share trading

business and his total turnover from share trading business and future

and option transactions was to the extent of Rs.31.96 crores (rounded

off). Assessee was asked to explain the transactions and also produce

the books of accounts. To the query of AO, assessee submitted that he

was unaware about the transactions done in his account and to that

effect assessee had filed a police compliant and the investigation was in

progress. The submissions of the assessee were not found acceptable to

AO. AO noted that in the return of income since assessee has failed to

disclose the transactions of Rs.31.96 crores and thus it was a case of

furnishing of inaccurate particulars of income and for which assessee

was liable for penalty u/s 271(1)(c) of the Act. AO also noted that since

the turnover of the assessee was Rs.31.96 crores and as the assessee

has not maintained books of accounts and had not got it audited as

required u/s 44AB of the Act, assessee was also liable for penalty u/s

271A and 271B of the Act. He thus levied penalty u/s 271(1)(c), 271A

and 271B of the Act. Aggrieved by the assessment order of AO, assessee

carried the matter before Ld.CIT(A), who vide ex-parte order dismissed

the appeal of assessee.

Aggrieved by the order of Ld.CIT(A), assessee is now in appeal.

assessee was not having knowledge about the transactions done in his

account and to that effect he had registered F.I.R., the same was also on

the file of AO. Ld.A.R. further submitted that assessee was non-resident

of India for the period under consideration. He further submitted that

assessee could not appear before the lower authorities and did not

produce the required documents i.e., book of accounts etc., to prove his

case and that if given a chance, assessee undertakes to appear before

lower authorities and furnish all the required details to substantiate his

case. He therefore submitted that assessee be granted one more

opportunity to explain his case. Ld.D.R. on the other hand supported

the order of AO and Ld.CIT(A) and objected to Ld.A.R.’s prayer for 2nd

innings.

record. The issue in the present case is with respect to the levy of

penalty by AO and which was confirmed by Ld.CIT(A). Before me, it is

assessee’s contention that he could not appear before the lower

authorities to prove his case by filing required documents and that

Ld.CIT(A) has passed ex-parte order and not decided the issue on merits.

In view of the well settled principle of natural justice that sufficient

opportunity of hearing should be afforded to the parties and no party

should be condemned unheard, I am of the view that one more

opportunity be granted to the assessee to present his case before the

lower authorities. I therefore restore the matter back to the file of

Ld.CIT(A) to decide the issue on merits in accordance with law. Needless

to state that Ld.CIT(A) shall grant adequate opportunity of hearing to

both the parties. Assessee is also directed to promptly furnish all the

details called for by the authorities. In view of my decision to restore the

issue to the file of Ld.CIT(A), I am not adjudicating on merits the

grounds of the appeal raised by the assessee. Thus, the grounds of

assessee are allowed for statistical purposes.

Order pronounced on 17th day of October, 2019.

Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER पुणे Pune; �दनांक Dated : 17th October, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-13, Pune. 4. The PCCIT, Pune. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक सद�य” / DR, ITAT, “SMC” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER

// True Copy //

व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.