DISHA N. LALWANI,MUMBAI vs. ITO 23(2)(2), MUMBAI

O R D E R

PER RAM LAL NEGI, JM

against the impugned order passed by the Ld. CIT (A):- 1. “On the facts and in the circumstances of the case and in law, the penalty order passed u/s 271 (1)(c) of the I.T. Act is invalid and bad in law.

2. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in confirming the penalty levied of Rs. 1,73,219/- u/s 271 (1)(c) of the I.T. Act and that too without giving full and proper opportunity of being heard in the matter.

3. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in confirming the penalty levied of Rs. 1,73,219/- u/s 271 (1)(c) of the I.T. Act and that too without appreciating fully and properly the facts of the case.

4. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in confirming the penalty levied of Rs. 1,73,219/- u/s 271 (1)(c) of the I.T. Act although there has been neither any concealment of income nor furnishing of inaccurate particulars of income.”

4. This case was fixed for hearing on 07/11/2017. On the said date, when the case was called for hearing, none appeared on behalf of the assessee nor any application for adjournment was received. We noticed that this case was fixed for hearing for the first time on 02/04/2017. Thereafter, the case was posted for 03/03/2017, 13/04/2017, 21/04/2017 and 02/11/2017 for hearing, however, the assessee the assessee did not appear on any of the said dates. We further observed that notice sent through registered post has received back with the remark of the Postal Department that the party has left Assessment Year: 2003-04 the place. From the conduct of the appellant/assessee, we are satisfied that the assessee is not interested in pursuing the present appeal. We accordingly decide to dispose of the appeal on the basis of material on record after hearing the Departmental Representative (DR).

5. Before us, the Ld. DR relying on the order passed by the Ld. CIT (A) submitted that in quantum appeal the Mumbai Tribunal has confirmed the addition in question. Therefore, there is no merit in the assessee’s appeal and the same is liable to be dismissed.

6. We have carefully gone through the material on record. The only grievance of the assessee is that the Ld. CIT(A) has wrongly confirmed the penalty levied by the AO u/s 271(1)(c) of the Act. We notice that the assessment was reopened in this case after receiving information from DIT (Inv), Mumbai that search and seizure operation was conducted on M/s Mahasagar Securities Pvt. Ltd. and its related group of 34 companies including M/s Goldstar Finvest Pvt. Ltd. run by Mr. Mukesh Chauksi and it was found that the appellant had obtained accommodation entries in the scrip of M/s Buniyad Chemicals and M/s N.E. Electronics through M/s Gold Star Finvest Pvt. Ltd. and Mr. Mukesh Chauksi in his statement admitted that these companies provide purchase bills for long term capital gain and further confirmed that both the sales and purchase bills issued are bogus. We further notice that the SEBI has confirmed that no trades for client code through the member’s names appearing in the contract note were found executed. The concluding para of Ld. CIT (A)’s order reads as under:-

In the above facts and circumstances, where it has been established that the appellant has obtained accommodation entries from a professional entry provider additions having been made in the hands of the appellant, attract the levy of penalty under section 271 )1)(c) of the Act. It is not a case of a bonafide Assessment Year: 2003-04 explanation being given by the assessee which has not been accepted by the Department but finding of fact by the Assessing Officer/Commissioner of Income Tax s(Appeals) as referred to by the AO, establishes deliberate attempt to evade tax by way of introduction of cash credits and the assessee having furnished inaccurate particulars of income makes it liable to levy of penalty under section 271(1)(c) of the Act.