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Facts
The assessee, a firm engaged in real estate development, declared 'on-money transactions' of Rs. 82 lakhs during a survey and accepted the addition. The penalty was levied under Section 271(1)(c) at 100% of the evaded tax, amounting to Rs. 37,04,485. The CIT(A) passed an ex-parte order upholding the penalty.
Held
The Tribunal noted that the assessee was unable to submit documents to the CIT(A) due to a change in consultant and that the quantum addition was deleted in a related appeal. The Tribunal also observed that while the appellate authority claimed to have given a reasonable opportunity, the assessee did not get a reasonable opportunity to present its grievance and evidence before the CIT(A).
Key Issues
Whether the penalty under Section 271(1)(c) was rightly confirmed by the CIT(A) without providing a reasonable opportunity to the assessee, especially when the quantum addition was deleted in a related appeal?
Sections Cited
271(1)(c), 250, 133A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI PRASHANT MAHARISHI & SHRI ANIKESH BANERJEE
Instant appeal of the Assessee is preferred against the order of theld. Commissioner of Income-tax (Appeals), Pune-11 [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2014-15, date of order 20.09.2023.The impugned order was emanated from the order of the ld. Assistant Commissioner of Income-tax, Circle 4, Thane (in short, ‘the A.O.’) passed under section 271(1)(c) of the Act, date of order 28/03/2019. a.) Under the facts and circumstances of the case and in law, the Hon. Commissioner of Income lax(A) erred in confirming the penalty levied u/s 271(1)(c) of the income tax act by the then Assessing Officer amounting to 100% of the tax amount i.e. Rs. 37,04,485/- on following amounts without any appropriate reason, ignoring the submission and explanations present with him and only on the basis of assumption and conjectures. a. On business income Rs. 82,00,000/-considering the same as alleged unexplained credits on account of furnishing inaccurate particulars of income. b. On amount of Rs. 26,98,750/- on account of difference between the estimated profit as on date of survey and returned profit as per audited profit and loss account as on 31.03. 2014 allegedly considering the same as furnishing inaccurate particulars of income. b) Under the facts and circumstances of the case and in law, the Hon. Commissioner of Income Tax(A) erred in not providing enough opportunity for preparing and submitting the submission and presenting the matter before him. c) The Appellant crave leave to add, amend or delete any of the above ground.
Brief facts of the case are that the assessee is a firm and is engaged in business of real estate development and construct the residential and commercial buildings. In a survey operation carried out under section 133A of the Act, the assessee declared an amount of Rs.82 lakhs related to ‘on-money transactions’ and accepted the addition. The assessee filed return by declaring the total income at Rs.1,14,01,250/-. The case was selected for scrutiny and after addition of the declared amount, the assessed income is fixed amount to Rs.1,42,00,000/-. By re-computing the business income after considering the ‘on-money 3 Arham Neej Deep Realtors receipts’the difference in net profit is calculated amount to Rs.26,98,750/- is added back with the total income of the assessee. The Ld.AO initiated the penalty proceedings under section 271(1)(c) of the Act and the tax sought to be evaded is calculated amount to Rs.37,04,485/-. The tax is levied @100% as penalty under section 271(1(c) of the Act which is amount to Rs. 37,04,485/-. The assessee challenged the penalty order before the ld. CIT(A). The Ld.CIT(A) passed an exparte order. As the assessee was unable to submit the documents in favour of its claim. Finally, the appeal order is passed by upholding the penalty order. Being aggrieved on the appeal order, the assessee filed an appeal before us.
The Ld.AR argued vehemently and placed that the assessee was unable to submit the document before Ld.CIT(A) due to change of consultant. The Ld.AR further placed that in quantum appeal, the addition was deleted. So the penalty will be recomputed accordingly after giving effect to the order of the ITAT. The Ld.AR prayed for setting aside the matter before the Ld.CIT(A) for hearing the appeal petition afresh. 5. The Ld.DR argued and did not make any objection against the submission of the Ld.AR. The Ld.DR invited our attention in para 6 of appeal order, which is reproduced as below:-