FIZA EDUCATION SOCIETY,BULANDSHAHR vs. CIT(A), GHAZIABAD

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ITA 8217/DEL/2018Status: DisposedITAT Delhi15 May 2019AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) passed a non-speaking order without properly discussing the facts and circumstances. Therefore, the case was remitted back to the CIT(A) for a fresh decision after providing adequate opportunity to the assessee.

What were the facts?

The assessee society's claim for exemption under Section 10(23C)(iiiad) was found to be not maintainable, leading to an income enhancement and penalty under Section 271(1)(c). The assessee contended that the penalty order was passed prematurely, was non-speaking, and violated principles of natural justice.

What were the issues?

Whether the penalty under Section 271(1)(c) was validly imposed, and whether the CIT(A) followed principles of natural justice and passed a speaking order.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SHRI H.S. SIDHU

For Appellant: Adv. &

This appeal filed by the Assessee is directed against the order dated 28.09.2018 of the Ld. CIT(Appeals), Ghaziabad relevant to assessment year 2009-10 on the following grounds of appeal: - 1) Because provisions of Section 271(1)© of the Act do not apply to the appellant society since the appellant society has neither concealed any particulars nor has furnished inaccurate particulars of his income. 2) Because Ld. CIT(A) acted prematurely in pronouncing a penalty order despite the corresponding assessment already pending in appeal before Hon’ble Tribunal as on the date of pronouncement of order. 3) Because Ld. CIT(A) has erred in passing a non- speaking order to the extent that the submissions of the appellant society in revert to the show cause notice were not rebutted or countered in passing the penalty order. 4) Because the order has been passed without providing sufficient opportunity of being heard to the appellant society, thereby, Ld. CIT(A) acted against the principles of natural justice despite there being no time barring limitation being imposed in appellant society’s case for passing the said order. 5) The appellant craves leave to add to alter, amend or delete above grounds of appeal.

2.

Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.

3.

Ld. Counsel of the assessee stated that Ld. CIT(A) has not given proper opportunity to assessee to present his case and passed the non-speaking order. Hence, he requested that the issues in dispute may be set aside to the file of the Ld. CIT(A) to decide the same afresh, after giving adequate opportunity of being heard to the assessee.

4.

On the other hand, Ld. DR relied upon the orders of the authorities below and not objected the request of the ld. counsel for the assessee.

5.

After hearing both the parties and perusing the impugned order. For the sake of convenience, I am reproducing hereunder the relevant finding of the Ld. CIT(A):-

“….2.4 Examination of facts reveals that appellant’s claim of exemption u/s. 10(23C)(iiiad) was not maintainable and to that extent appellant had furnished inaccurate particulars of income attracting penalty u/s. 271(1)©.

2.5 Under the above facts and circumstances, I have no option but to impose the penalty under section 271(1)© of the Income Tax

Act, 1961 for failure to substantiate the claim made in the return of income. Enhancement was made for Rs. 3,00,007/- to the assessed income of appellant. 100% of tax sought to be evaded by appellant on amount of income enhancement of Rs. 3,00,007/- is imposed.

The AO shall separately deal with penalty initiated by him in the order. Accordingly, the AO is directed to issue demand notice and direct the appellant to pay the amount.”

5.1 After perusing the aforesaid finding, I am of the considered view that Ld. CIT(A) has passed a non-speaking order without properly discussing in detail the facts and circumstances of the case. 5.2 In this regard, I draw support from Hon’ble Apex Court in the case M/s Sahara India (Farms) Vs. CIT & Anr. in [2008] 300 ITR 403 wherein it has held that even “an administrative order has to be consistent with the rules of natural justice”.

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