BRIJLAXMI PAPER PRODUCTS PRIVATE LIMITED,KOLKATA vs. DCIT, CIRCLE 5(1), , KOLKATA

Brief facts of the case are that the appellant-assessee is a Private Limited Company, which filed its return of income electronically on 29.10.2018 for the AY 2018-19 declaring income of NIL. The assessment was completed under section 143(3) read with section 144B of the Income Tax Act on 04.06.2021 and addition of Rs.3,17,13,175/- was made. Out of this total addition, Rs.1,51,233/- was added on account of excess interest payment claim on which penalty proceedings under section 270A of the Act for mis-reporting of income was initiated. Subsequently, show cause notices for penalty under section 270A for misreporting of income were issued to the assessee on 16.11.2021 and 25.11.2021 asking to show-cause as to why penalty order under section 270A should not be imposed. In response, the assessee replied by stating that they have no intension of being non-responsive to any notices received from the Department and requested to furnish the final assessment order u/s 143(3), so as to enable them to do necessary compliance in the matter. The reply of the appellant-assessee was not found to be tenable by the ld. Assessing Officer. Though the assessment order passed on 04.06.2021 through ITBA Portal. The ld. Assessing Officer observed that the assessee had made misreporting of income to the extent of Rs.1,51,233/- and opined that it was a fit case to levy of penalty under section 270A of the Income Tax Act. The ld. Assessing Officer determined the tax which sought to be evaded to the extent of Rs.50,000/- and imposed penalty @ 200% of tax sought to be evaded which comes to (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited Rs.1,00,000/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).

The ld. CIT(Appeals) dismissed the appeal of the assessee ex- parte as the assessee failed to produce any documentary evidence in support of its claim inspite of sufficient opportunities given.

On being aggrieved, the assessee preferred an appeal before the ITAT.

It was the submission of the ld. Counsel for the assessee that the ld. CIT(Appeals) simply upholding the order of ld. Assessing Officer and without going into the merit of the case dismissed the appeal. Ld. Counsel pleaded to set aside both the orders of revenue authorities.

It was the submission of the ld. Departmental Representative that sufficient opportunity was being provided to the assessee. Therefore, the ld. CIT(Appeals) has no other option except dismissing the appeal and he pleaded to uphold the order passed by the ld. CIT(Appeals).

We have heard both the sides and perused the material available on record. The ld. CIT(Appeals) dismissed the appeal of the assessee saying that the appellant is not interested in filing any details during the appellate proceedings and availed the opportunity under the Principles of Natural Justice. No further opportunity be provided as the appellant has already been granted (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited several opportunities which shows that the appellant is a habitual non- compliant and had no regards for the statutory proceedings. The ld. CIT(Appeals) also relied on the judgment of the Hon’ble Supreme Court in the case of Dr. P. Nalla Tampy -vs.- Shankar (1984 (Supp) SCC 63 and the case of New India Assurance -vs.- Srinivasan (2000) 3 SCC 242 as well as Hon’ble Punjab & Haryana High Court in the case of Nirmal Singh & Others (Cr No. 3791 of 2013 (O & M) dated 01.05.2014. Likewise, in the case of CIT Vs. Multiplan India (P) Ltd. (38 ITD 320) (Del) similar view had been taken. The ld. CIT(Appeals), therefore, convinced that the assessee was not interested in prosecuting the appeal and, therefore, dismissed the appeal of the assessee as un-admitted.

Now the question before us is imposition of penalty for furnishing inaccurate particulars of income was justified or not? No penalty can be levied for furnishing of inaccurate particulars of income or concealing particulars of income, which ld. AO has held in his penalty order that penalty is being levied under both the limbs, which itself shows his satisfaction is vague. By considering the totality of the facts and circumstances and in order to ensure the principle of natural justice, we are of the view that it is a fit case to provide one more opportunity to the assessee to decide the case on merit. Therefore, we remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him and to decide it afresh on merit. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.