ASSISTANT COMMISSIONER OF INCOME-TAX vs. M/S. GHODAWAT ENERGY (I) PVT. LTD.,, KOLHAPUR

The brief facts of the case as emanating from records are : The assessee is a private limited company engaged in manufacturing of Panmasala, Ghutkha and Electricity. In assessment order passed u/s.

Dr. Vivek Aggarwal representing the Department submitted that a perusal of impugned order would show that no reason whatsoever has been given by the Commissioner of Income Tax (Appeals) for deleting penalty levied u/s. 271(1)(c) of the Act. The order of Commissioner of Income Tax (Appeals) is non-speaking and thus, is liable to be set aside. The ld. DR further submitted that the assessee has claimed excess depreciation on windmill which was disallowed by Assessing Officer. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed part addition. The Assessing Officer has levied penalty on the addition confirmed by Commissioner of Income Tax (Appeals). Thereafter, the assessee has not challenged the order of Commissioner of Income Tax (Appeals) confirming disallowances of excess depreciation. Thus, the addition of Rs.34,79,380/- has attained finality. The Assessing Officer has

On the other hand Shri R.G. Nahar appearing on behalf of the assessee submitted that in paragraph 6 of the impugned order the Commissioner of Income Tax (Appeals) has given reasons for deleting levy of penalty. The ld. AR vehemently supporting the order of Commissioner of Income Tax (Appeals) prayed for dismissing the appeal of Revenue.

We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. In appeal the Revenue has assailed the action of Commissioner of Income Tax (Appeals) in deleting levy of penalty u/s. 271(1)(c) of the Act. A perusal of impugned order reveals that the Commissioner of Income Tax (Appeals) has not given reasoned finding for deleting the penalty. In paragraphs 1 to 4 of the impugned order, the Commissioner of Income Tax (Appeals) has given brief gist of facts of the case and has reproduced the submissions made by assessee. In paragraph 5 of the order the Commissioner of Income Tax (Appeals) has referred to the decision of Tribunal, Pune Bench in the case of Everready Investment Pvt. Ltd. (sic) and thereafter has concluded as under : “6. The decision of honourable Supreme Court in the case of Dilip N. Shrof v/s JCIT, Special Range, Mumbai 291 ITR 519 the decision is more exhaustive. It was held by the honourable Supreme Court that a duty may be enjoined on the assessee to make a correct disclosure of income but if the disclosure is based on opinion of an expert, only because his opinion is not accepted, the same by itself may not be sufficient for arriving at conclusion that assessee has furnished inaccurate particulars warranting penalty under section 271(1)(c). Since burden of proof in penalty proceedings vary from that in the assessment proceedings cannot be automatically be adopted.”

We are of considered view that in the impugned order the Commissioner of Income Tax (Appeals) has not given any sustainable reason for deleting penalty levied u/s. 271(1)(c) of the Act. The reasoning given by Commissioner of Income Tax (Appeals) in concluding paragraph is cryptic and lacks clarity. Hence, we deem it appropriate to remit this appeal back to the file of Commissioner of Income Tax (Appeals) for passing a speaking order after affording opportunity of hearing to the assessee, in accordance with law. Accordingly, the impugned order is set aside and the appeal of Revenue is allowed for statistical purpose.

In the result, the appeal of Revenue is allowed for statistical purpose.