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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 158/JP/2021
vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal by the assessee is directed against the order dated 06.09.2021 of the ld. CIT(A), National Faceless Appeal Centre, Delhi [hereinafter referred to as (NFAC)], arising from penalty order passed U/s. 271(1)(c) of the Income Tax Act, 1961 (in short the “Act”) for the AY 2006- 07.
The assessee has raised the following grounds:-
“1. The Ld. CIT(A), NFAC has erred on facts and in law in deciding the appeal ex-parte without providing adequate opportunity of hearing. 2. The Ld. CIT(A), NFAC has erred on facts and in confirming the levy of penalty of Rs. 75,09,550/- u/s 271(1)(c) of the IT Act, 1961. He has further erred in levying the penalty even when the appeal against the quantum addition has been admitted by the Hon’ble Rajasthan High Court. 3. The appellant craves to alter, amend & modify and ground of appeal
.”
4. Necessary cost be awarded to the assessee.”
Brief facts of the case are that the assessee is a partnership firm was constituted on 11.05.2005 with an object of carrying out plantation, tee estate and construction business. It filed its return of income on 31.10.2006 declaring a loss of Rs. 10,772/-. Proceedings notice u/s 147 of the IT Act, 1961 were initiated for the A.Y. 2006-07. Accordingly, notice u/s 148 of the IT Act was issued on 21.03.2013 after recording proper reasons and taking approval of Addl. CIT, Range-4, Jaipur, which was duly served upon the assessee. The assessee has purchased a land situated at Bhankrota, Jaipur for Rs. 1,76,34,000/- on 11.08.2005 through registered sale deed from Smt. Dhapu Tehsil Sanganer, Jaipur. As per sale deed the sale consideration was paid through various cheques and DDs. Further in the course of investigation/inquiries it came to the notice that on 12.08.2005 total cas of Rs. 180.80 Lacs was deposited in the Bank accounts of Smt. Dhapu Devi and her relatives/ closely connected people which was also reflected in the bank account statements of the sellers and their relatives.
The AO arrived the findings that the assessee has concealed particulars of income, penalty proceedings u/s 271(1)(c) of the IT Act are also being initiated separately. With the above remarks, the total income is computed as under: Returned income as declared by the assessee Rs. Nil Add:- Addition as discussed above Rs. 2,23,10,000/- Total INCOME Rs. 2,23,10,000/- Assessed at Rs. 2,23,10,000/-. Demand notice and challan are being issued. Int. u/s 234A, 234B, 234C and 234D are being charged as per ITNS 150 appended to this order, which forms a part of this order. Penalty proceedings u/s 271(1)(c) r.w.s. 274 have been initiated separately for concealment of income/furnishing of inaccurate particulars of income.
5 Being aggrieved by the assessment order, the assessee preferred an appeal before the ld CIT(A). Before the ld. CIT(A), The CIT(A) for the reasons stated in his order has rejected the arguments that sufficient opportunities as given to the assessee.
Aggrieved by the CIT(A) order, the assessee filed appeal before ld. CIT (A) against said penalty order and in course of hearing filed written submissions which reproduced in appeal order of ld. CIT (A). The ld. CIT(A), NFAC in his order dated 06-09-2021 in para 7.9 to 7.17 held that :-
" 7.9 In view of the above discussion I am of the view that the appellant has furnished inaccurate particulars of income on the facts of the case and the Assessing Officer has recorded specific satisfaction in penalty proceeding regarding furnishing of inaccurate particulars and as such, the penalty so levied is sustainable in law. 7.10 It has been also noted that the Assessing Officer had considered the matter afresh and recorded the satisfaction that the assessee had concealed the amount or furnished inaccurate particulars. The appellant failed to discharge his onus as failed to file details proving the facts. 7.11 In the case of Union of India v. Dharamendra Textile Processors [(2007) 295 ITR 244] the Hon'ble Supreme Court held that Penalty under section 271 (1 )(c) is a civil liability for which willful concealment is not an essential ingredient for attracting the civil liability as is the case in the matter of proceedings under section 276C. 7.12 In the case of CIT Vs Zoom Communication (P.) Ltd., [191 Taxman 179 (Delhi) [2010] 327 ITR 510 (Delhi)[2010] 233 CTR 465, the Hon'ble Delhi High Court held that If assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bona fide, Explanation 1 to section 271 (1)(c) would come into play and assessee will be liable to penalty. 7.13 In the case of CIT vs Gates Foam & Rubber Co [91 ITR 467] and CIT vs India Seafood [105 ITR 708] the Hon'ble Kerala High Court held that Claiming excessive deduction also amounts to concealment of income. 7.14 In the case of Steel Ingots Ltd vs. CIT [296 ITR 228] the Hon'ble Madhya Pradesh High Court held that in case of concealment of true income chargeable to tax by making bogus claim, levy of penalty u/s 271 (1)( c) read with Explanation 1 is justified. 7.15 In the case of CIT Vs Escorts Finance Ltd [183 Taxman 453 (Delhi)/[2010] 328 ITR 44 (Delhi)/[2009] 226 CTR 105] the Hon'ble Delhi High Court held that if claim made in return of income appears to be ex facie bogus, it would be treated as a case of concealment or furnishing of inaccurate particulars and penalty proceeding would be justified. 7.16 In the case of K.P. Madhusudhanan Vs CIT [2001] 118 Taxman 324 (SC)/[2001] 251 ITR 99 (SC)/[2001] 169 CTR 489 (SC)] the Hon'ble Supreme Court held that where assessee was unable to furnish evidence for loans and it offered amount of transaction as additional income, Assessing Officer was justified in imposing penalty u/s 271(1)(c) after finding the explanation to be unacceptable and applying Explanation 1(B) of the section. 7.17 In view of the above discussion and case laws, I am of the view that the Assessing Officer has correctly levied the penalty u/s 271(1)(c ) of the Act and did not call any interference. This ground of appeal is dismissed.”
7. On the other hand, Ld. DR strongly supporting the order of the CIT(A) and submitted that there is no merit in arguments taken by the Ld. AR of the assessee and the AO has rightly taken has a fit case for imposition of penalty U/S 271(1)(C) of the Act. The assessee neither before the Assessing Officer nor before ld. CIT(A) could substantiate his explanations. Even now the assessee has not furnished any evidence to prove otherwise than the findings of lower authorities.
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The ld AR for the assesee submitted that CIT (A) has passed ex parte order without giving sufficient opportunity to furnish the documents as evidence. The Ld AR for the assesee has not filed any written submissions or any documentary evidence to substantiate the various grounds of appeal. In the interest of justice, it will be proper to remand the matter to the file of AO to decide afresh after calling for the submissions of the assessee along with documentary evidence. The case is remanded to AO, who shall make an endeavour to dispose of the matter in accordance with law as indicated above as expeditiously as possible, where additional evidence in form of segmental audited results have been admitted
6 /JP/2021 M/s Om Plantation vs. ITO which needs to be verified and examined by the Revenue authorities and in any case within a period of three months from the date of pronouncement of this order before him.
In the result, appeal of the assessee is allowed for statistical purpose.