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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: SMT P. MADHAVI DEVI & SHRI B. RAMAKOTAIAH
THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA No.734/Hyd/2016 Assessment Year: 2011-12 Shri G. Venkateswara vs. Addl. CIT, Range-13, Varma, Hyderabad. Hyderabad. PAN – AARPG8207A (Appellant) (Respondent) Assessee by : Shri A.V. Raghuram Revenue by : Smt. N. Swapna Date of hearing : 26-03-2018 Date of pronouncement : 06-04-2018 ORDER PER P. MADHAVI DEVI, J.M.: This is assessee’s appeal for the A.Y 2011-12 against the order of the CIT(A)-4, Hyderabad, dated 14.03.2016, confirming the penalty levied by the A.O u/s 271E of the IT Act.
Brief facts of the case are that the assessee, an individual, filed his return of income for the A.Y 2011- 12 on 13.09.2011 admitting total income of Rs. 52,28,930/-. During the assessment proceedings u/s 143(3) of the Act, the A.O observed that the assessee has taken loans from certain parties during the F.Ys
2 ITA Nos. 734/Hyd/2016 Shri G. Venkateswara Varma, Hyderabad. 2005-06 and 2007-08 and during the relevant F.Y 2010-11, he has repaid the loans in cash in violation of provisions of Sec. 269T of the Act. Therefore, he initiated the penalty proceedings u/s 271E of the IT Act, by issuing a show cause notice dated 28.02.2014. The assessee did not file any reply to the notice and therefore, the A.O levied the penalty of sum equal to the amount of loan repaid in cash i.e Rs. 17,62,593/-.
Aggrieved, the assessee preferred an appeal before the CIT(A) stating that during the assessment proceedings, it was explained to the A.O, that all the above are genuine loans received from assessee’s close relatives and friends by way of cheques and the repayment of such loans had to be made in cash at the insistence of the lenders on the grounds of financial urgency. It was also explained that the assessee had handed over the notice u/s 271E of the IT Act, to his authorized representative, with a request to appear and explain the facts of the case to the A.O and he was under a bonafide belief that his AR had duly complied with his instructions since no further notices were received from the department
3 ITA Nos. 734/Hyd/2016 Shri G. Venkateswara Varma, Hyderabad. thereafter. It was submitted that, only on the receipt of the penalty order dated 28.08.2014, that the assessee came to know that his AR has failed to file his reply and prayed for deletion of the penalty. The CIT(A), however was not convinced with the assessee’s contentions and confirmed the penalty levied by the A.O. Aggrieved by the order of the CIT(A), the assessee is in appeal before us.
The Ld. Counsel for the assessee has drawn our attention to the confirmation letters from the creditors confirming that they were repaid the loans in cash as per their request. He submitted that the CIT(A) has not considered any of these documents, but has unilaterally confirmed the penalty. Therefore, he prayed that the issue may be remanded to the file of the CIT(A), for reconsideration in accordance with law.
The Ld. DR was also heard.
Having regard to the rival contentions and the material on record, we find that though the assessee had not filed the relevant details before the A.O, he had filed the details before the CIT(A). The CIT(A),
4 ITA Nos. 734/Hyd/2016 Shri G. Venkateswara Varma, Hyderabad. has neither called for a remand report nor did she verify the details by herself. This is in clear violation of the principles of natural justice. Therefore, we set aside the order of the CIT(A) and remand the issue to the file of the CIT(A) for de-novo consideration in accordance with law, after considering the evidence filed by the assessee. Accordingly, the assessee’s appeal is treated as allowed for statistical purposes.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
Pronounced in the open court on 06th April, 2018.
Sd/- Sd/- (B. RAMAKOTAIAH) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 06th April, 2018 KRK 1 Shri G. Venkateswara Varma, C/o A.V Raghu Ram, Advocate, 610, Babukhan Estate, Hyderabad. 2 The ACIT, Range-13, Hyderabad 3 The CIT(A)-4, Hyderabad. 4 The Pr. Commissioner of Income tax-4, Hyderabad. 5 The DR, ITAT Hyderabad 6 Guard File