INCOME TAX OFFICER, WARD-11(1), KOLKATA, AAYAKAR BHAWAN, CHOWRINGHEE SQUARE, KOLKATA vs. POSITIVE DEVCON PVT. LTD., SONARPUR

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ITA 1123/KOL/2023Status: DisposedITAT Kolkata26 February 2025AY 2011-12Bench: SHRI DUVVURU RL REDDY, VICE PRESIDENT (KZ), SHRI RAKESH MISHRA (Accountant Member)8 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee's non-appeal against the assessment order implied acceptance of the additions, making the concealment of income evident. It held that the CIT(A) erred by deleting the penalty on mere technical grounds and by not allowing the AO to clarify discrepancies. Citing the Calcutta High Court, the Tribunal affirmed that a Section 274 notice issued after recording concealed income particulars in the assessment order is valid. Consequently, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication after providing both the AO and the assessee an opportunity to be heard.

What were the facts?

The assessee's original assessment was completed under Section 143(3), followed by a consequential order under Section 263, which resulted in a significant income addition of Rs. 25,83,10,000/- and a penalty of Rs. 8,58,04,736/- under Section 271(1)(c) for AY 2011-12. The assessee failed to comply during penalty proceedings and did not appeal the original assessment. The CIT(A) deleted the penalty, citing a discrepancy in the assessee's address in the penalty order and perceiving the AO's penalty order as casual, without giving the AO an opportunity to explain.

What were the issues?

Whether the CIT(A) was justified in deleting a penalty under Section 271(1)(c) on technical grounds like an address discrepancy and perceived casualness, without allowing the Assessing Officer an opportunity to explain. Whether the assessee's non-compliance and non-appeal against the assessment order constitutes admission of income concealment.

Which sections of the Income-tax Act were involved?

Section 250,Section 271(1)(c),Section 143(3),Section 263,Section 114(g),Section 292B,Section 153A,Section 274

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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: SHRI DUVVURU RL REDDY(KZ) & SHRI RAKESH MISHRA

For Respondent: DR. Assessee represented by : None

order

: February 26th, 2025 ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

1.

This appeal filed by the Revenue is against the order dated 28.08.2023 of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as the ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2011-12, which has been passed against the penalty order u/s 271(1)(c) of the Act, dated 30.03.2017.

2.

The Revenue is in appeal before the Tribunal raising the following grounds of appeal:

1. Whether on the facts and circumstances of the case in and in law, the Ld. CIT(A) was erred in allowing the appeal of the assessee ignoring the fact that the concealment of income, on which penalty was imposed, was deemed to have been admitted by the assessee by not contesting the original order where addition was made on account of concealment of income?

2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in allowing the appeal of the assessee in the absence of any compliance from the assessee either during penalty proceedings or during appellate stage?

3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in allowing the appeal of the assessee based on merely on the issue of ignorable variance in the address of the assessee mentioned in the penalty order?

4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in not dismissing the appeal of the assessee who had shown no interest pursuing the appeal during the appellate stage which last for almost long two years?

5. The appellant craves leave to make any amend, addition, alternation, modification etc. of the grounds either before the appellate proceedings, or in the course of appellate proceedings.”

3. Brief facts of the case are that the assessee e-filed the return of income on 28.03.2012 declaring total income of Rs. 15,085/- and the assessment was made u/s 143(3) of the Act on 07.02.2014 determining the total income at Rs. 26,400/-. Subsequent to the order u/s 263 of the Act passed by Ld. Pr. CIT-4, Kolkata on 04.03.2014, the Ld. AO passed the consequential order assessing the total income at Rs. 25,83,36,400/- after making addition of Rs. 25,83,10,000/-. There was no compliance during the penalty proceedings. Further, as per the Ld. AO, the assessee had not preferred any appeal against the order u/s

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