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Income Tax Appellate Tribunal, “D” Bench, Mumbai
Before: Shri Ravish Sood & Shri N.K. Pradhan
O R D E R
PER RAVISH SOOD, JM
The present appeal filed by the assessee is directed against the order passed by the CIT(A)-28, dated 12.03.2018, which in turn arises from the order passed by the A.O under Sec. 271(1)(c) of the Income Tax Act, 1961 (for short „Act‟), dated 30.09.2015 for A.Y. 2012- 13. The assessee assailing the impugned order has raised the following grounds of appeal before us: “1. The Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as “CIT(A)”] erred in confirming the penalty of Rs.1,69,21,364/- levied under section 271(1)(c) without appreciating the fact that the show cause notice dated 23.03.2015 issued under section 274 r.w.s 271 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] is void ab initio as it is not discernable from the same whether the penalty proceedings are initiated for concealment of income or P a g e | DyanrajYashwantNikam Vs. Income Tax Officer-17(1)(4) furnishing of inaccurate particulars of income. Hence, the notice dated 23.03.20 15 under section 274 r.w.s 271 of the Act and the subsequent penalty order under section 271(1)(c) of the Act are bad in law and the same may be quashed.
2. The Ld. CIT(A) erred in confirming the penalty of Rs.1,69,21,364/- levied under section 271(1)(c) by the Ld AO without appreciating that the entire turnover has been treated as income in an arbitrary manner. Thus the levy of penalty is not at all justified and the same may be deleted.
4. Without prejudice to the above the Ld. CIT(A) failed to appreciated that he has not allowed the additional evidence to show that the income determined in the assessment order is unjustified. Thus the addition to the income itself is not justified.
4. The appellant craves leave to add, alter rescind or amend any of the above grounds of appeal.”
2. Briefly stated, the assessee who is engaged in the business of clearing and forwarding agent had filed his return of income for A.Y. 2012-13 on 29.03.2013, declaring his total income at Rs.2,70,800/-. Assessment was framed by the A.O vide his order passed under Sec. 143(3)r.w.s 144, dated 23.03.2015 at an income of Rs.5,60,18,294/-. The A.O while framing the assessment had also initiated penalty proceedings under Sec. 271(1)(c) of the Act.
3. Subsequently, the A.O issued a „Show cause‟ notice under Sec. 271(1)(c), therein calling upon the assessee to explain as to why penalty under the said statutory provision may not be imposed on him. As the assessee failed to offer any explanation, therefore, the A.O after deliberating on the facts of the case imposed penalty under Sec.271(1)(c) of Rs.1,69,21,364/-.
4. Aggrieved, the assessee assailed the imposition of penalty under Sec. 271(1)(c) in appeal before the CIT(A). As the CIT(A) was not persuaded to subscribe to the claim of the assessee that no penalty under Sec. 271(1)(c) was liable to be imposed in his hands, therefore, he upheld the penalty levied by the A.O under Sec. 271(1)(c).
P a g e | DyanrajYashwantNikam Vs. Income Tax Officer-17(1)(4) 5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short „A.R‟) for the assessee at the very outset of the hearing of the appeal submitted, that the assessee being aggrieved with the order of the CIT(A)-28, Mumbai, dated 01.03.2018, wherein the assessment framed by the A.O under Sec. 143(3) r.w.s 144 of the Act, dated 23.03.2015 was affirmed, had carried matter in appeal before the Tribunal. It was submitted by the ld. A.R that the Tribunal in all fairness had restored the assessment to the file of the A.O with a direction to pass a fresh order. It was averred by the ld. A.R that as the quantum assessment had been restored to the file of the A.O, therefore, the penalty proceedings may also be restored to his file.
Per contra, the ld. Departmental Representative (for short „D.R‟) did not controvert the aforesaid factual position.
We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, the order passed by the CIT(A) confirming the assessment framed by the A.O under Sec. 143(3) r.w.s.144, dated 23.03.2015 had been „set aside‟ by the Tribunal, vide its order passed in Dyanraj Yashwant Nikam Vs. ITO-17(1)(4), Mumbai (ITA No. 2776/Mum/2018, dated 29.10.2018) (copy placed on record). The Tribunal while restoring the assessment to the file of the A.O for fresh adjudication had observed as under: “7. We have gone through the facts in entirety and are of the view that there is total casual approach by the assessee in representing its case but in the interest of justice, we restore this assessment back to the file of the A.O and set aside the orders of the lower authorities. Needless to say that the assessee will present before A.O as and when called, he will represent with all the evidences to explain its claim. The appeal of assessee appeal is allowed for statistical purposes.”