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Facts
The assessee failed to file an income tax return, prompting the department to assess income under section 144 based on payments with TDS. Penalty proceedings were initiated under section 271(1)(c) for concealment of income, and a penalty of Rs.21,61,647/- was imposed by the AO and subsequently confirmed by the CIT(A) through an ex-parte and cryptic order.
Held
The ITAT observed that the CIT(A)'s order was non-speaking and cryptic, and the assessee was not afforded a proper opportunity for a virtual hearing. Therefore, the ITAT remanded the case back to the CIT(A) with directions to pass a fresh speaking order after providing the assessee a proper opportunity of being heard.
Key Issues
The key legal issues concern the validity of the penalty levied under section 271(1)(c) for concealment of income and the procedural impropriety of the CIT(A)'s ex-parte and non-speaking order.
Sections Cited
Section 271(1)(c), Section 139, Section 147, Section 148, Section 144, Section 194C, Section 194J
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ : NEW DELHI
(Assessment Year: 2012-13) Leapfrog, vs. ITO, Ward 29 (1), A-14, Third Floor, New Delhi. Gulmohar Park, New Delhi – 110 049. (PAN : AAATL3565D) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Nitin Kanwar, Advocate Shri Rajeev Kumar, Advocate REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 11.01.2024 Date of Order : 14.02.2024
ORDER This appeal by the assessee is directed against the order of the ld. CIT (Appeals)/National Faceless Appeal Centre (NFAC) dated 06.04.2023 for the assessment year 2012-13. 2. Although the assessee has raised various grounds, the only issue pertains to penalty levied under section 271(1)(c) of Income-tax Act, 1961 (for short ‘the Act’). 3. Brief facts of the case are that the assessee did not file its return of income as required under section 139 of the Act. As per the non-filer
Income Tax Department, the assessee had received the following payments on which TDS has been made :-
Amount of payments received (Rs.) Tax deducted under section 3,90,31,588/- 194C 11,40,878/- 194J On the basis of the above information, the case was taken up for assessment under section 147 of the Act and the notice u/s 148 was issued to the assessee on 29.03.2019. But no return of income was filed even against the notice u/s 148 of the Act. Neither any compliance was made during the assessment proceedings. As a result, the assessment was completed u/s 144 of the Act on 02.12.2019 at the assessed income of Rs.69,95,616/- (Rs.58,54,738/- which is 15% of the contractual receipts on which tax has been deducted u/s 194C of the Act plus the whole of the professional and technical receipts).
3.1 This income of Rs.69,95,616/- was treated as concealed income and penalty proceedings were initiated u/s 271(1)(c) of the Act for concealing the particulars of income. On the issue of concealment of income, the assessee has submitted that tax was deducted on the receipts and therefore, there is no concealment. Further, assessee submitted that it must be noted that the tax deducted at source is only a withholding tax which can be more or less than the actual tax payable. AO noted that in this case of the assessee, the tax deducted is less than the assessed tax of Rs.21,61,647/-.
Further, in the assessed tax, various interests have not been included. So, there is very much concealment of income and thereby that of tax too by the assessee. Taking a lenient view, as the assessee was cooperative during the last stage of the proceedings, minimum penalty of Rs.21,64,647/- @ of 100% of the tax that the assessee sought to evade is hereby imposed on the assessee.
Upon assessee’s appeal, ld. CIT (A) in an ex-parte, cryptic and non- speaking order confirmed the penalty.
Against this order, assessee has filed appeal before me. I have heard both the parties and perused the records.
I find that ld. CIT (A) passed a very cryptic and non-speaking order.
The assessee also asked for virtual hearing but the same did not materialise.
Hence, in my considered opinion, the interest of justice will be served if the matter is remanded to the file of ld. CIT (A). Ld. CIT (A) shall pass a speaking order after giving the assessee proper opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes.. Order pronounced in the open court on this 14th day of February, 2024.