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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the above mentioned appeals against the different order passed by the Commissioner of Income Tax (Appeals) -4, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Ys.2006-07 & 2007-08.
The assessee has filed the present appeal against the order dated 13.02.2017 passed by the Commissioner of Income Tax (Appeals) -4, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Ys.2006-07. ITA No. 3846 & 3847/M/2017 A.Y.2006-07 & 2007-08 3. The assessee has raised the following grounds: - “1. The order passed by the learned Commissioner of Income Tax (Appeals) u/s. 271(1)(c) is bad in law.
2. The learned Commissioner of Income Tax (Appeals) erred in confirming penalty of Rs.14,10,000/-u/s. 271(l)(c) of the Income Tax Act, 1961.
The learned Commissioner of Income Tax (Appeals) failed to appreciate that penalty u/s. 271(0(c) had been initiated initiated by the predecessor Assessing Officer in the case of same assessee for the same assessment year on additions made in respect of the same issues and the penalty proceedings had been dropped by the Assessing Officer in accordance with law after due consideration.
4. The learned Commissioner of Income Tax (Appeals) failed to appreciate that if the additions made in the original assessment order has been duly adjudged by the predecessor Assessing Officer as not meriting levy of penalty, the Commissioner of Income Tax (Appeals) erred in confirming the penalty in respect of the very same issues where earlier additions had been only reduced and not increased.
The learned Commissioner of Income Tax (Appeals) failed to appreciate that the assessment order dated 11-02-2015 is an order passed u/s. 143(3) r.w.s. 254 and hence there is no provision for reviving penalty proceedings which had been already dropped.
The learned Commissioner of Income Tax (Appeals) failed to take into account the fact that the predecessor Assessing Officer had dropped penalty proceedings vide order dated 24-03-2014 after receipt of ITAT's order dated 07-08-2013 and the Assessing Officer erred in levying the present penalty on the basis of order giving effect to the said ITAT's order and that if no concealment had been found in the first order, there can be no concealment in the order giving effect to ITAT's order.”
The brief facts of the case are that the assessee filed its return of income on 28.11.2016 declaring total income to the tune of Rs.1,07,99,899/-. Thereafter, the assessee has filed the revised return of income on 29.03.2008 declaring total income to the tune of Rs.3,34,36,493/- under the normal provisions of I. T. Act and declared book profit u/s 115JB of the Act of Rs.98,57,631/- Based on the direction A.Y.2006-07 & 2007-08 of DRP, the final order u/s 143(3) r.w.s. 144C(13) was passed on 18.08.2010 assessing total income of Rs.4,80,19,930/- under the normal provisions of I. T. Act and book profit u/s 115JB of the I. T. Act of Rs.1,97,48,820/- by making the following addition read as under.:-
Normal Provisions of I. T. Act (i) TP adjustments Rs.1,24,73,795/- (ii) Cash expenses Rs.26,45,716/- (iii) Disallowance u/s 14A of the I. T. Act Rs.11,85,990/- Book Profit u/s 115JB of I. T. Act (i) Disallowance u/s 14A of I. T. Act Rs.11,85,990/- (ii) Provisions for doubtful debts Rs.87,05,196/- Accordingly, the AO invoked the provisions u/s 271(1)(c) of the I. T. Act. Therefore, the notice was given and after the reply of the assessee, the AO levied the penalty to the tune of Rs.14,10,000/-. Feeling aggrieved, the assessee an appeal before the CIT(A) who confirmed the penalty, therefore, the assessee has filed the present appeal before us.
5. We have heard the argument advanced by the Ld. Representative of the Department and has gone through the case carefully. In fact, the Ld. Representative of the assessee did not argue the case on merits but argued the matter on this point that the CIT(A) has decided the matter of controversy in absence of the assessee and without giving an opportunity of being heard to the assessee in accordance with law. Therefore, the order of the CIT(A) in question is wrong against law and facts and is liable to be set aside. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order of the CIT(A) dated 13.02.2017, we noticed that the CIT(A) decided the matter of controversy in absence of the assessee without giving an opportunity of A.Y.2006-07 & 2007-08 being heard to the assessee. It is against the principle of natural justice. A proper and reasonable opportunity is required to be given to the assessee before the deciding the matter of controversy in accordance with law.
6. For this proposition we placed reliance upon the following case laws. (1) CIT Vs. Premkumar Arjundas Luthra (HUF) (2017) 154 DTR (Bom) 302 (2) CIT Vs. S Chenniappa Mudaliar (1969) 74 ITR 1 (SC) 7. Therefore, in the said circumstances, we are of the view that the order of the CIT(A) is not liable to be sustainable in the eyes of law, therefore, we set aside the finding of the CIT(A) on all the issues and restored the matter before the CIT(A) to decide the matter afresh by giving an opportunity of being heard to the assessee in accordance with law.
Since the appeal of the assessee bearing for the A.Y.2007-08 is having similar controversy, therefore, the finding above is quite applicable to the facts of the present case also as mutatis mutandis, therefore, the present appeal is hereby also allowed accordingly.
In the result, the appeals filed by the assessee are hereby allowed statistical purposes. Order pronounced in the open court on 27/10/2020 (RAJESH KUMAR) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 27/10/2020 Vijay Pal Singh/Sr. PS A.Y.2006-07 & 2007-08