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Income Tax Appellate Tribunal, BANGALORE BENCHES “ C ” BENCH: BANGALORE
Before: SHRI B.R. BASKARAN & SHRI PAVAN KUMAR GADALEShri Rajnish Rama Rao, C.A. Shri Karuppusamy, S.R., Addl CIT (D.R)
O R D E R
PER SHRI PAVAN KUMAR GADALE, JM :
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-4, Bangalore passed under Section 271(1)(c) and 250 of the the Income Tax Act, 1961 ('the Act').
At the time of hearing, though the assessee has raised the grounds of appeal
, but the only contention envisaged by the learned Authorized Representative that the assessee is deprived of reasonable opportunity of hearing before the assessing authority in levying the penalty and also CIT (Appeals) has confirmed the penalty.
3. The Brief facts of the case are that the assessee is engaged in the business of land development and Real estate activities and filed the Return of Income for Assessment Year 2014-15 on 26.09.2014 and subsequently the case was selected for scrutiny and Notice under Section 143(2) and 142(1) were issued. In compliance, the learned Authorized Representative appeared from time to time and furnished the details. The Assessing Officer in the course of assessment proceedings, found that the assessee has issued shares at a premium during the relevant previous year and details were furnished. On perusal of the details filed by the assessee, the Assessing Officer noticed that the assessee has issued 75,000 equity shares of face value of Rs.10 each on 9.10.2013 to M/s. Ferromin Sales Pvt. Ltd. at a value of Rs.700 per share which include premium of Rs.690.Hence the AO called for valuation report in respect of shares issued at a premium in accordance with Rule 11 U / 11 U A Since the assessee could not submit the valuation report. The Assessing Officer made addition applying the net value method as per Rule 11 UA (2)(a) of Rs.1,47,75,000 and Assessed total income of Rs.1,52,65,185 and passed the order under Section 143(3) of the Act Dt.8.12.2016.Subsequently, the Assessing Officer initiated penalty proceedings under Section 271(1)(c) of the Act and issued Notice. Whereas the assessee has submitted a letter on 17.1.2017 mentioning that the assessment order passed under Section 143(3) of the Act dt.8.12.2016 was accepted by the assessee with addition of Rs.1,47,75,000 as income and the assessee has also paid the taxes of Rs.64,00,260 and prayed for waiver of penalty. Whereas the Assessing Officer observed that the assessee has not responded and failed to give satisfactory explanations in the assessment proceedings and also in penalty proceedings. Therefore Assessing Officer has considered it as fit case for levy of penalty and pass the order 271(1)(c) of the Act Dt.30.06.2017. Aggrieved by the order, the assessee has filed an appeal with the CIT(Appeals) ,whereas the CIT(Appeals) has confirmed the levy of penalty and dismissed the appeal. Aggrieved by the CIT (Appeal) order, the assessee has filed an appeal with the Tribunal.
The learned Authorized Representative at the time of hearing submitted that the penalty was levied by the Assessing Officer under the provisions of Section 271(1)(c) of the Act for concealment and inaccurate particulars furnished and further no reasonable opportunity of hearing was provided to the assessee before initiating the penalty and only one hearing was granted. Further the CIT(Appeals) has not granted sufficient time to the assessee to substantiate the case with evidence and prayed for an opportunity of hearing. Contra, the learned Departmental Representative supported the orders of CIT(Appeals).