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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI RAMIT KOCHAR
आदेश / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER:
The assessee has filed this appeal before the Income Tax Appellate Tribunal, Chennai Benches, Chennai (hereinafter called “ the Tribunal”) challenging the appellate order passed by learned Commissioner of Income Tax (Appeals)-8, Chennai ( hereinafter called “the CIT(A)” ), in dated 22.11.2017 for assessment year (ay) 2012-13.
The appellate proceedings had arisen before learned CIT(A) from penalty order dated 28.09.2015 passed by learned Assessing Officer(hereinafter called “ the AO”) u/s 271(1)(c) of the Income-tax Act 1961(hereinafter called “the Act”).
Briefly stated the facts of the case are that the assessee has filed an appeal before Ld.CIT(A), which was adjudicated by Ld.CIT(A) vide appellate order dated 22.11.2017. The Ld.CIT(A) has issued notices to the assessee on several occasions., but however, the assessee except on one occasion when it sought adjournment , did not appear before Ld.CIT(A).
The Ld.CIT(A) dismissed the appeal of the assessee vide appellate order dated 22.11.2017 mainly for non-prosecution of its appeal by assessee, but however, while passing appellate order the Ld.CIT(A) simply upheld penalty order passed by the AO without independently discussing issues/grounds on merits raised by assessee in its first appeal filed with learned CIT(A), as is required under the provisions of Sec.250(6) of the 1961 Act.
Aggrieved by an appellate order 22.11.2017 passed by learned CIT(A), the assessee has filed this appeal before tribunal and arguments are advanced by both the rival parties before the Bench. The Ld.Counsel for the assessee at the outset submitted that this appeal before tribunal relates to penalty levied by invocation of provisions of Section 271(1)(c) of the 1961 Act . it was submitted that quantum is not challenged by assessee and it has attained finality. On being asked by the Bench, it was admitted by learned counsel for the assessee that the assessee did not appear before learned CIT(A) when the appeal was called for hearing before the learned CIT(A) except on one occasion when adjournment was sought by assessee. It was submitted by learned counsel for the assessee that learned CIT(A) simply upheld penalty order passed by the AO and no independent reasons were given by learned CIT(A) while upholding penalty levied by the AO u/s 271(1)(c) of the 1961 Act.
The Ld.DR submitted that assessee did not appear before learned CIT(A) despite notices being sent to assessee. It was submitted that survey operations were conducted by Revenue and additions were made on the basis of detection made in survey proceedings.
We have considered rival contentions and perused the material on record. We have observed that survey operations were conducted in the case of the assessee by Revenue u/s 133A of the 1961 Act. During the course of survey operations, the assessee was not able to explain the sources of expenditure to the tune of Rs. 6,81,000/- which led to additions being made by AO to the income of the assessee while framing quantum assesment , as an unexplained expenditure . The assessment order has attained finality as the assessee did not challenge the additions made by the AO in assessment order before higher appellate authorities. The AO levied penalty of Rs. 4,00,000/- by invoking provisions of Section 271(1)(c) vide penalty order dated 28.09.2015 passed u/s 271(1)(c) of the 1961 Act . The assessee challenged and assailed the said penalty order passed by AO u/s 271(1)(c) of the 1961 Act by filing first appeal before learned CIT(A). It is observed that the assessee did not appear before Ld.CIT(A) despite opportunities granted by learned CIT(A) except on one occasion when assessee sought adjournment , but , however, Ld.CIT(A) on its part passed an appellate order without discussing issues in the appeal filed by assessee independently on merits and has , inter- alia, dismissed appeal of the assessee for non-prosecution and simply upheld penalty order passed by the AO without independently discussing all the issues/grounds in appeal filed by assessee on merits based on material on record, as is required u/s 250(6) of the 1961 Act. In our considered view, the matter needs to be restored to file of Ld.CIT(A) for fresh adjudication on merits in accordance with the law of all the issues/grounds raised by assessee in its first appeal filed with learned CIT(A). The assessee on its part is also equally responsible for its woes as it did not co-operated with learned CIT(A) in first round of litigation. We hereby direct assessee to appear before Ld.CIT(A) and submit all necessary evidences, explanations etc., in support of its contention , when the appeal comes for hearing before Ld.CIT(A) in denovo appellate proceedings in second round of litigation. It is made clear that if the assessee still did not come forward and co-operate in denovo appellate proceedings before learned CIT(A), then Ld.CIT(A) shall be at liberty to decide the issue’s on merits in accordance with law, based on material on record. The Ld.CIT(A) is directed to denovo adjudicate all the issues/grounds raised by assessee in its first appeal filed with learned CIT(A) denovo on merits in accordance with law by passing a speaking and reasoned order. Needless to say that learned CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law, in denovo appellate proceedings. We also note decision of Hon’ble Madras High Court in the case of Ajji Basha v. CIT reported in (2019) 111 taxmann.com 348(Mad.) in W.P. No. 26091 of 2019 and W.M.P. No. 25462 of 2019, judgment dated 09.09.2019 which is relevant. Thus, the appeal of the assessee stands allowed for statistical purposes. We order accordingly.
In the result, the appeal filed by the assessee in for ay: 2012-13 is allowed for statistical purposes.
Order pronounced in open Court on this 5thDecember, 2019, in Chennai.