M/S. ROHINI CONTRACTORS PVT. LTD.,MEERUT vs. ITO, NEW DELHI

assessee against the order dated 16.07.2014 passed by the ld. CIT(A)-XVIII, New Delhi for assessment year 2004- ITA 5219 & 5220/D/2014 Assessment year 2004-05 appeal for the same year against the order dated 17.7.2014 confirming penalty of Rs. 21,70,438/- imposed u/s 271(1)(c) of the Act. The grounds of appeal in I.T.A.

No. 5219/Del/2014 read as under:-

“1. That in this case, CIT(A) has not properly considered the written submission and case laws filed by the assessee therefore, penalty imposed by Assessing Officer and confirmed by CIT(A) is bad in law.

2. That in the written submission, the assessee has filed detailed reply with the case law which is not considered by the CIT(A) and CIT(A) has not justified confirming the penalty u/s 271(1)( c) of the I.T. Act.

“1. That in this case Hon’ble I.T.A.T. direct CIT(A) to decide the appeal going into the merits of the case after providing proper and reasonable opportunity being heard to the assessee. The main contention of the assessee as per ground no. 1 & 2 that no notice U/s 147/143(3) was served upon the assessee. Although, Ld. CIT(A) discussed this issue but he has not appreciate that the assessee contention that notice U/s 147, 143(2), 142(1) was not served upon the assessee. Therefore, CIT(A) is in error in deciding first and second issue of the grounds of appeal taking by the assessee before CIT(A) at original stage.

2. That CIT(A) has not gone through the reason recorded by the A.O. was debatable and the A.O. has not applied 2 ITA 5219 & 5220/D/2014 Assessment year 2004-05 their mind while recording the reason he simply endorsed the letter written by Office of the Director of Income Tax Investigation, New Delhi. Hence, order made by the A.O. and confirm by CIT(A) is erroneous and against the facts and law.

3. That on merits also CIT(A) as well as A.O. has not considered the various case laws quoted by the assessee, therefore, order passed by CIT(A) as well as A.O. is against the facts, law and direction given by the I.T.A.T.

4. That the assessee has right to add, delete or modify any grounds during the appeal proceeding.”

3. Brief facts of the case are that the assessee company had filed its return of income for the relevant year declaring total income of Rs. 1,73,280/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called ‘the Act’). Subsequently, on the basis of information received from the Office of Director of Income Tax (Inv.), New Delhi that the assessee had allegedly received accommodation entries amounting to Rs. 1,25,00,000/- from various parties, reassessment proceedings were initiated u/s 147/148 of the Act. The assessee company failed to respond to the notice issued u/s 148 and thereafter, the Assessing Officer proceeded to complete the assessment u/s 147/144 of the Act at Rs. 62,23,280/- after adding an amount of Rs. 60,50,000/- as income from undisclosed sources u/s 68 of the Act. The assessee’s appeal before the ld. CIT(A) was also dismissed ex ITA 5219 & 5220/D/2014 Assessment year 2004-05 parte qua the assessee as the assessee did not appear before the ld. CIT(A) also. On an appeal before the ITAT, ITAT Delhi Bench vide order dated 6.12.2013 in restored the case to the file of the ld. CIT(A) on the ground that there was no mention of the service of notice to the assessee in the order of the ld. CIT(A) and also on the ground that the ld. CIT(A) had dismissed the appeal ex parte without going into the merits of the case. Subsequent to the ITAT’s order, the ld. CIT(A) again dismissed the assessee’s appeal on merits on the ground that the assessee had failed to discharge the onus regarding accommodation entries as alleged in the letter received from the Director of Investigation. Meanwhile, penalty u/s 271(1)(c) against the quantum was also imposed which was upheld by the ld. CIT(A). Now, the assessee is before us in both the quantum as well as the penalty appeals.