M/S. PREMIUM BUILDWELL PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 1538/DEL/2017Status: DisposedITAT Delhi29 September 2017AY 2012-133 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) had not adjudicated a specific ground raised by the assessee regarding the non-service of a show-cause notice before penalty levy. Therefore, the matter was restored to the CIT(A) for fresh adjudication.

What were the facts?

The assessee company declared a total income of Rs. 97,180, but the AO made an addition of Rs. 26,96,000 on account of cash credits under Section 68. The CIT(A) granted partial relief. The AO then levied a penalty of Rs. 8,33,100 under Section 271(1)(c), which was upheld by the CIT(A).

What were the issues?

Whether the penalty under Section 271(1)(c) was validly levied without proper show-cause notice and clear specification of the charge. Whether the CIT(A) properly adjudicated all grounds raised before him.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI

Before: SHRI R. K. PANDA

PER R.K. PANDA, A.M: This appeal filed by the assessee is directed against the order dated 14th February, 2017 passed by the CIT(A)-12 New Delhi relating to assessment year 2012-13. 2. Levy of penalty of Rs. 8,33,100/- by the AO and upheld by the CIT(A) is the only issue raised by the assessee in the grounds of appeal

1.

3. The learned counsel for the assessee submitted that the assessee is a company engaged in the business of building shops, malls etc,. It filed its return of income on 28th September, 2012 declaring total income of Rs. 97,180/-. The AO completed the assessment under section 143(3) on a total income of Rs. 27,93,180/- wherein he had made addition of Rs. 26,96,000/- on account of cash credits under Section 68 of the I.T. Act. The assessee filed an appeal before the CIT(A) who gave part relief to the assessee wherein an amount of Rs. 7,36,000/- was deleted. He submitted that the AO initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act and levied penalty of Rs. 8,33,100/- which has been upheld by the CIT(A).

4. He submitted that apart from various grounds, the assessee had taken a specific ground before the CIT(A) that no notice has been served on the assessee before levy of such penalty. However, the learned CIT(A) has not adjudicated the said ground. He submitted that the penalty order of the AO also does not mention service of any notice to the assessee. Therefore, the penalty levied by the AO and upheld by the CIT(A) is not proper. Further, the penalty has been levied for concealment of income and furnishing of inaccurate particulars i.e. on both clauses and it is not specifically mentioned under which clause the penalty has been levied. He accordingly submitted that the penalty so levied by the AO and upheld by the CIT(A) be cancelled. In his alternate contention he submitted that he has no objection if the matter is set aside to the file of the CIT(A) with a direction to adjudicate the specific ground raised

before him.

5. The learned DR, on the other hand while supporting the order of the CIT(A) submitted that he has no objection if the matter is restored to the file of the CIT(A) with a direction to adjudicate the issue afresh on legal grounds.

6. After hearing both the sides, I find the assessee had taken a specific ground before the CIT(A) that the penalty order has been passed without service of any show cause notice and the AO has failed to specify the charge for which penalty is sought to be levied. Since, the order of the CIT(A) is silent on this vital ground as per ground no. 3 before him therefore, I deem it proper to restore the issue to the file of the CIT(A) with a direction to adjudicate the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. The grounds raised by the assessee are accordingly allowed for statistical purposes.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29.09.2017.

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