RAJEEV KAPOOR,BHOPAL vs. ACIT 2(1), BHOPAL
Facts
The assessee sold a plot of land for Rs. 35,50,000, while its fair market value was Rs. 86,85,000. The Assessing Officer (AO) initiated reassessment proceedings and levied a penalty of Rs. 12 lakh under Section 271(1)(c) of the Income Tax Act. The CIT(A) upheld the penalty.
Held
The Tribunal held that the order of the CIT(A) was non-speaking and unreasoned. The CIT(A) had not considered all the grounds and submissions made by the assessee. Therefore, the Tribunal set aside the order of the CIT(A) and remanded the matter back for a fresh adjudication.
Key Issues
Whether the penalty levied under Section 271(1)(c) was justified, and whether the CIT(A) properly adjudicated the grounds of appeal and passed a speaking order.
Sections Cited
253, 271(1)(c), 246A, 50C, 274, 143(1), 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
आदेश/ O R D E R
Per Paresh M Joshi, J.M.:
This is an appeal filed by the assessee in terms of Section
253 of the Income Tax Act, 1961 (hereinafter referred to as the
“Act” for sake of brevity) before this Tribunal as and by way of
Second appeal under the Act. The assessee is aggrieved by the
order bearing Number ITBA/NFAC/S/250/2024-25/
10691604971) dated 27.09.2024 passed by Ld. CIT(A) u/s 250
of the Act which is hereinafter referred to as the “Impugned
order”. The relevant Assessment Year is 2012-13 and the
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corresponding previous year period is from 01.04.2011 to
31.03.2012.
FACTUAL MATRIX
2.1 That as and by way of penalty order dated 30.09.2015 a
penalty of Rs. 12 lakh was imposed upon the assessee u/s
271(1)(c) of the Act by Ld. A.O which order is hereinafter referred
to as the “impugned penalty order”.
2.2 That it is recorded in the “impugned penalty order” that a
notice u/s 271(1)(c) of the Act was issued on 26.03.2015. A show
cause notice too was issued on two occasions I.e. 22.06.2015 and
24.09.2015. It is also recorded that no response has been
received from the assessee.
2.3 That the assessee being aggrieved by the “impugned
penalty order” prefers first appeal u/s 246A of the Act before Ld.
CIT(A) who by the “impugned order” has dismissed the first
appeal of the assessee on reasons and grounds specified therein.
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2.4 That the assessee being aggrieved by the “impugned order”
has preferred the instant second appeal before this Tribunal and
has raised following grounds in Form No.36 (which is a form of
appeal to this Tribunal) against the “impugned order” which
are as under:-
“1. That on the facts and circumstances of the case learned Commissioner of Income Tax (Appeals) is arbitrary, unjust, unlawful and perverse.
That on the facts and circumstances of the case and in law, the order (appealed against) of the learned Commissioner of Income Tax (Appeals) has erred in law as well as facts in confirming the penalty of Rs.12,00,000 without application of mind and without even reacting the facts of the case.
That on the facts and circumstances of the case and in law, the order (appealed against) of the learned Commissioner of Income Tax (Appeals) has erred in law as well as facts in confirming the penalty, completely ignoring the laid down law and the cases cited by the Appellant during the appellate proceedings, that no penalty is exigible under section 271(1)(c ) in case of addition under section 50C of the Income Tax Act, 1961.
That on the facts and circumstances of the case the AO had erred in levying and the learned Commissioner of Income Tax (Appeals) has erred penalty u/s 271(1)(c ) of the Act, where, in the show cause notices issued, the AO has not specified the limb of Section 271(1)(c ) under which he has issued the notice for levying the penalty, completely ignoring the laid down law and the cases cited by the appellant during the appellate proceedings.
That on the facts and circumstances of the case the learned Commissioner of Income Tax (Appeals) has erred in law as well as on facts in confirming the penalty u/s 271(1)(c ) of the Act, completely ignoring the laid down law (section 274) and the cases cited by the appellant during the appellate proceedings, that no penalty can be imposed unless the assessee has been given a reasonable opportunity of being
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heard. The penalty order has been confirmed by the learned Commissioner of Income Tax (Appeals) in complete violation of the principles of natural justice. 6. That on the facts and circumstances of the case and without prejudice to the above grounds of appeal the learned Commissioner of Income Tax (Appeals) has erred in law as well as on the facts in confirming the penalty order under section 271(1)(c ) of the Act completely ignoring the fact that the quantum appeal in this case is still subjudice and is pending decision. 7. The appellant craves leave to add/alter or amend any of the grounds of appeal before or at the time of hearing”.
Record of Hearing
3.1 The hearing in the matter took place before this Tribunal on
15.05.2025 when the Ld. AR for and on behalf of assessee
appeared before this Tribunal. The Ld. AR has placed on record
of this Tribunal a paper book containing pages 1 to 40 and a brief
write up containing 4 pages in support of the case of the assessee.
The Ld. AR then interalia contended before us that the assessee
is an individual and derives income from petroleum products and
is running a petrol pump. Besides the business income the
assessee has income from interest and capital gains. That the
return of income of the assessee for Assessment Year 2012-13
was filed and then the ROI was processed u/s 143(1) of the Act.
The assessment was reopened u/s 147 of the Act on the basis of
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annual information report (AIR) that the assessee had sold a plot
to one Shri Pradeep Sharma for Rs.35,50,000/- whereas the fair
market value of the property in question was Rs.86,85,000/-.
Therefore as per the provisions of Section 50C of the Act, the
capital gain should be calculated on the basis of fair market
value and therefore, the income of Rs.51,35,000/- has escaped
assessment (Rs.86,85,000/- (-)Rs.35,50,000/-). The Ld. AR then
stated that though the quantum of assessment order is passed against the assessee but 1st appeal before Ld. CIT(A) is still
pending hearing and final disposal. In so far as the “impugned
order” of the first appellate authority is concerned on penalty the
Ld. CIT(A) has not adjudged and adjudicated all grounds raised.
The “impugned order” is two page order. Submissions made
are not considered. In brief Ld. CIT(A) has not taken in to
consideration entire gamut and facts and the circumstances of
the assessee’s case. The Ld. CIT(A) has passed the “impugned
order” in mechanical manner. Per contra Ld. DR appearing for
and on behalf of revenue contended that it would be just fair and
convenient that in the circumstances basis contentions
canvassed by Ld. AR, it would be prudent that the “impugned
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order” be set aside and matter be remanded back to the file of Ld.
CIT(A) as quantum assessment first appeal is pending for hearing
and final disposal before Ld. CIT(A). In rejoinder Ld. AR too fairly
concedes that issue may be remanded back to the file of CIT(A)
wherein all issues including legal would be thrashed out properly.
Observations,findings & conclusions.
4.1 We now have to adjudge and adjudicate the present appeal
filed by the assessee on the basis of the records of the case and
contentions canvassed before us during the course of hearing. In
brief we have to decide the legality, validity and the proprietery of
the “impugned order”.
4.2 We have carefully perused the records of the case as
presented to this tribunal by both Ld. AR and Ld. DR to
determine the legality, validity of the “Impugned Order” basis
law and by following due process of law.
4.3 We basis records of the case and after hearing and upon
examining the contentions of both Ld. AR and Ld. DR are of the
considered view that when quantum assessment order is under
challenge before Ld. CIT(A) in first appeal which is pending for
hearing and final disposal we hold that so called satisfaction
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contemplated by virtue of Section 271(1) of the Act either with
regard to concealment of particulars of assessee’s income or
furnishing inaccurate particulars in course of any proceedings
under the Act is still at large and no finality is achieved even at least at the 1st appellate stage under the Act. Further the Ld.
CIT(A) should have examined all the contentions including legal
submissions before passing the “impugned order” that too in a
mechanical manner wherein all grounds raised and contentions
made in Form No.35 along with submissions made before CIT(A), during the course of the 1st appellate penalty proceedings (PB
page 1 to 8), were just not considered and that there is no
whisper of it in the “impugned order” which is a two page
order. We therefore hold that the “impugned order” is non
speaking and unreasoned order in as much as contentions
canvassed before him before passing of “impugned order” were
just not examined and appreciated. It was incumbent upon the
Ld. CIT(A) in quasi judicial capacity to have considered the same
before passing the “impugned order”. We therefore hold that
same having been not done so, the “impugned order” deserves
to be set aside. Resultantly we set aside the “impugned order”
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and remand the case back to the file of Ld. CIT(A) with a direction
to pass a fresh order on denovo basis wherein he should
consider, examine and pass a speaking order on merits after
taking in to consideration all submissions made before him
including legal if any.
Order
5.1 In result basis premises drawn up by this Tribunal the
impugned order is set aside as and by way of remand on denovo
basis.
5.2 Appeal of the assessee is allowed for statistical purpose.
Order pronounced in open court on 16.05.2025.
Sd/- Sd/-
(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore िदनांक/ Dated :16/05/2025 Dev/Sr. PS
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Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File
By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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