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Facts
The assessee filed a return of income declaring Rs.32,75,860/-. The AO made an addition of Rs.64,19,760/- for business income due to a difference in the valuation of immovable property, leading to penalty proceedings u/s 271(1)(c). The assessee failed to cooperate during the valuation process and did not file an appeal against the assessment order. The AO levied a penalty of Rs.6,99,758/-.
Held
The Tribunal noted that the assessee failed to provide submissions despite multiple opportunities before the CIT(A)/NFAC and the Assessing Officer. The Tribunal restored the issue to the file of the CIT(A)/NFAC, granting one final opportunity to the assessee to substantiate their case by filing requisite details and directing them to appear and make submissions without seeking adjournment.
Key Issues
Whether the penalty imposed u/s 271(1)(c) is justified when the assessee failed to provide cooperation and submissions, and if the case should be remanded for a final opportunity to the assessee.
Sections Cited
271(1)(c), 143(3), 274
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 27.06.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2015-16.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC sustaining the penalty of Rs.6,99,758/- levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30.08.2015 declaring total income of Rs.32,75,860/-. The Assessing Officer passed the order u/s 143(3) of the Act on 29.06.2018 by making addition of Rs.64,19,760/- towards business income on account of difference in valuation of immovable property. Since the assessee had furnished inaccurate particulars of income to the extent of Rs.64,19,760/- the Assessing Officer initiated penalty proceedings u/s 271(1)(c) of the Act. In absence of any compliance from the side of the assessee the Assessing Officer levied penalty of Rs.6,99,758/- being penalty @ 100% of the tax sought to be evaded.
Since the assessee despite 7 opportunities granted by the Ld. CIT(A) / NFAC did not make any submission, the Ld. CIT(A) / NFAC dismissed the appeal and thereby sustained the penalty levied by the Assessing Officer by recording as under: “7.1. During the course of appeal proceedings, no written submission is filed by the appellant. The appeal is, therefore, decided on the basis of material available on records. 7.2. I have examined facts of the case, gone through the Order, SoF and GoA. 7.3. The appellant has taken three grounds of appeal. They all challenge the imposition of penalty on solo ground that the AO did not confront the valuation report from the appellant. 7.4. In this case, the addition of Rs.64,19,760/- was made for increase in profit, declared by the appellant, due to difference in valuation of immovable property. During the assessment proceedings, the appellant had claimed value of land at Rs.1,81,12,666/-. The AO referred the matter to valuation cell. During the proceedings before the valuation cell, the appellant did not cooperate and the valuation cell arrived at the figure of valuation of property at Rs.95,78,167/-. He, therefore, initiated penalty proceedings u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. During the penalty proceedings, the AO provided opportunities of being heard to the appellant which were not availed of by the appellant. The AO noticed that the appellant did not prefer appeal against the assessment order and concluded that the addition made in the assessment order had attained finality. The AO imposed penalty u/s 271(1)(c) at Rs.6,99,758/-.
As the facts of the present case suggest, there was a sound case of furnishing inaccurate particulars of income and the AO was justified in imposing penalty u/s 271(1)(c) of the Act. During the assessment proceedings when the matter was referred to the valuation cell, the appellant did not cooperate with the valuation cell. In any case, if he was not satisfied with the figure arrived at by the valuation cell, he could have filed appeal against the assessment order but he did not file appeal. During the penalty proceedings, the AO provided opportunities of being heard to the appellant which were not availed of by the appellant. During the appellate proceedings, various opportunities were provided to the appellant but he did not file any written submission. The appellant has not adduced anything to prove its case. He has been unable to show an illogical connection between the facts adduced by the AO and the findings in the Order. The AO has passed a reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. All the grounds of appeal
are, therefore, dismissed and the order for imposing penalty u/s 271(1) (c) of the Act is confirmed.
9. In result, the appeal is dismissed.”
5. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. It is an admitted fact that despite notice issued by the Assessing Officer u/s 274 r.w.s. 271(1)(c) of the Act dated 29.06.2018, there was no compliance from the side of the assessee for which another notice was issued on 10.12.2018. Again, there was non-compliance from the side of the assessee for which the Assessing Officer levied penalty of Rs.6,99,758/- being 100% of the tax sought to be evaded. We find despite number of opportunities granted by the Ld. CIT(A) / NFAC, there was non-compliance from the side of the assessee for which he sustained the penalty levied by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate his case by filing the requisite details. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Ld. CIT(A) / NFAC on the appointed date and make his submissions, if any, without seeking any adjournment under any pretext failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court at the conclusion of hearing itself i.e. on 26th August, 2025.