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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश /O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The assessee filed this appeal against the order of the Commissioner of Income Tax (Appeals)-5, Chennai in 5/2016-17 dated 16.10.2017 for assessment year 2008-09.
There was a search and seizure operation in the premises of Shri R.
Rangarajan, Chairman of M/s. Vel Tech Group of Educational Institutions and his family members, in which Smt. R. Mahalakshmi, the assessee, the daughter of Shri R. Rangarajan was also covered. Before the search and seizure operation, the assessee filed her return u/s. 139 admitting a total income of Rs. 33,91,800/- on 17.10.2008. The assessee has not admitted any undisclosed income u/s. 132(4). Post search and seizure enquiry, the Revenue got confirmation from the sellers of the plots that they received on money payments from the assessee, when the said facts were brought to the assessee, she had admitted the on-money receipts of Rs. 2,46,30,500/-.
Subsequently, on issue of notice u/s. 153A, the assessee filed a return admitting the total income of Rs. 2,02,62,800/- on 29.10.2010, in which she has claimed Rs. 6,50,000/- towards agricultural income which was not declared in the original return. After examining the facts and circumstances of the assessee’s case, the Assessing Officer levied penalty on the concealed income of Rs. 2,52,88,500/- [2,86,80,300-33,91800] u/s. 271(1)(c) at Rs. 78,30,787/-, which is 100% of tax sought to be evaded, by an order in F.No:
CEN/11-(3)/PTY/271(1)(c)/11-12 dated 27.06.2011. On an appeal, the CIT(A) in his order in dated 06.03.2013 directed the AO to levy penalty @ 10% u/s. 271AAA on the undisclosed income of the assessee.
Aggrieved by that order, the assessee as well as the Revenue filed appeals before the ITAT. The ITAT in its orders in & ITA No. 1305/Mds/2013 dated 25.11.2016 allowed/dismissed the assessee’s/ Revenue’s appeal, respectively.
3. Giving effect to the ITAT order, the AO restored the penalty levied u/s. 271(1)(c) in his order dated 13.01.2017. Aggrieved, the assessee filed an appeal before the CIT(A) and the CIT(A) upheld the action of the AO.
Against the order of the CIT(A), the assessee filed this appeal with the following grounds:
“1. The CIT(A) erred in upholding the order of the Assessing Officer to reinstating the penalty levied u/s. 271(1)(c) 2. The CIT(A) erred in disposing of the appeal ex-parte without giving the appellant a reasonable opportunity of being heard.
The CIT(A) ought to have seen that the appellant’s representative was busy in connection with the tax audit matters and hence he could not appear for the hearing.
4. The CIT(A) misinterpreted the order of the Hon’ble Income Tax Appellate Tribunal in in assessee’s own case and illogically confirmed the levy of penalty u/s. 271(1)(c).
5. The CIT(A) failed to appreciate that the Hon’ble Income Tax Appellate Tribunal has nowhere recorded that it is reinstating the penalty levied u/s. 271(1)(c) 6. The CIT(A) ought to have quashed the order of the Assessing Officer in reinstating the penalty proceedings u/s. 271(1)(c). Any other ground that may be adduced at the time of hearing.” 7.
The AR inviting our attention to the ITAT order submitted that the assessee’s appeal in has been allowed and the Revenue’s appeal in ITA No. 1305/Mds/2013 is dismissed. Since, these ITAT orders have become final, the order levied by the AO is not correct and hence the order passed by the CIT(A) is also not correct. Per contra, the DR submitted that the Assessing Officer passed the order u/s. 271(1)(c). On an appeal, the CIT(A) directed the AO to levy penalty u/s. 271AAA. The assessee as well as Revenue filed appeals against the directions of the CIT(A).
When the ITAT held that the penalty cannot be levied u/s. 271AAA, it is automatic that the levy of penalty made u/s. 271(1)(c) is confirmed. The assessee has not challenged the levy of penalty u/s. 271(1)(c) nor there is any finding on such order. On the assessee’s plea that the CIT(A) disposed the appeal ex-parte, without giving it a reasonable opportunity is also not correct, in view of the clear findings recorded by the CIT(A) in para 6.1 stating that he has posted the case six times for hearing on 18.04.2017 and the assessee sought a hearing in May 2017. The appeal was fixed for hearing on 22.05.2017 and the assessee sought for a hearing in June 2017. When the case was posted for hearing on 16.06.2017 none appeared nor any adjournment letter filed. Further, the case was posted for hearing on 24.07.2017, none appeared nor any adjournment letter filed. The case was again posted for hearing on 23.08.2017. An adjournment letter asking for a hearing in Oct 2017 was filed. When the case was posted for hearing for 04.10.2017, none appeared and hence the CIT(A) has passed the impugned order appreciating the facts. In view of that, the DR pleaded that the order of the CIT(A) may be confirmed.
We heard the rival contentions. Considering the fact that the order appealed is against the penalty order, we are of the opinion that the assessee should be given an opportunity of being heard before the appeal is disposed off and hence we remit the issue back to the CIT(A) for giving a reasonable opportunity to assessee and then pass a speaking order.
In the result, the assessee’s appeal is treated as allowed for statistical purposes.
Order pronounced on Thursday, the 08th day of February, 2018 at Chennai.