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Facts
The assessee filed an appeal against the order of the CIT(A) confirming a penalty levied under section 271(1)(c) r.w.s. 274 of the Income Tax Act, 1961. The original assessment was made ex-parte due to non-filing of a return and purchase of property. The penalty was levied on the additions made in the assessment.
Held
The CIT(A) dismissed the appeal ex-parte for non-prosecution, citing the assessee's failure to respond to hearing notices. The Tribunal noted that the quantum proceedings were set aside and to be framed afresh, rendering the penalty appeal infructuous.
Key Issues
Whether the penalty can be sustained when the quantum assessment order is set aside. Whether the dismissal for non-prosecution was justified.
Sections Cited
271(1)(c), 274, 139(1), 148, 144, 147, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 278/JPR/2024
vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M.
This appeal is filed by the assessee against the order of the ld. CIT(A) dated 31.01.2024, National Faceless Appeal Centre, Delhi [herein after referred to as "CIT(A)/NFAC"] for the assessment year 2012-13, which in turn arise from the penalty order dated 02.02.2022 passed under section 271(1)(c) r.w.s. 274 of the Income Tax Act,1961 (hereinafter “Act”) by the ITO, Ward-7(2), Jaipur.
Smt. Bugli Devi vs. ITO 2. The assessee has raised the following grounds of appeal:-
"1. The Ld. CIT(a), NFAC has erred on facts and in law in dismissing the appeal ex-parte on the ground that assessee does not wish to pursue the appeal without providing adequate opportunity of hearing. 2. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the levy of penalty of Rs. 1,06,82,017/- u/s 271(1)(c) of IT Act, 1961. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. necessary cost be awarded to the assessee.”
Brief facts of the case are that no return was filed by the assessee u/s 139(1) of the 1.T. Act 1961 for the relevant period. On possession of information regarding purchase of immovable property during the year by the assessee, the case was re-opened and notice u/s 148 of the I.T. Act 1961 was issued on 31.03.2019 after recording necessary reasons and getting necessary approval. Ultimately, the case was assessed u/s 144/147 as ex-parte on 02.12.2019 at total income of Rs.3,50,66,300/- making addition of entire amount on account of unexplained investment made in purchase of property. Upon completion of assessment, penalty proceedings u/s 271(1)(c) of the L.T. Act 1961 was initiated and notice was issued on 02.12.2019 and ultimately penalty of Rs. 1,06,82,017/- was levied.
Aggrieved from the order of the assessing officer, assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds of the appeal so raised
Smt. Bugli Devi vs. ITO by the assessee, the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below:
“4. Decision:
44.1 The grounds of appeal, statement of acts and penalty order passed u/s 271(1)(c) r.w.s. 271 of the Act dated 02.02.2022 have been perused carefully. At the outset it is worth mentioning that during the pendency of the appeal, appellant was issued various notices of hearing u/s 250 of the Act dated 09.10.20223, 26.10.2023 19.01.2024. For all these hearing notices, appellant did not make any submission in spite of availing sufficient time and opportunities. From the fact of appellant's non- response to various notices, it is clear that apparently, appellant has no specific submission to file to pursue the pending appeal. As appellant failed to avail the opportunities offered on various occasions from time to lime, it is understood that appellant is not keen to pursue the appeal as per law and accordingly, appeal filed by the appellant is liable to be dismissed for non-prosecution by the appellant. The following citations/decisions of Hon'ble Adjudicating Authorities clearly envisage for dismissal of appellant's appeal for appellant's failure to prosecute/pursue the pending appeal in spite of availing sufficient time and opportunities and accordingly, is not maintainable. The relevant citations are briefed as under for placing reliance to adduce appellant's non-prosecution of appeal as not maintainable.
In the case of CIT Vs. B.N. Bhattachargee& Another 118 ITR 461 (relevant pages 477 and 478) wherein their Lordships have held that "the appeal does not mean merely filing of appeal but effectively pursuing it.
In the case of Estate of Late TukojiRaoHolkerVs. CWT 223 IR 480 (MP) while dismissing the reference made at the instance of assessee in default made following observations in their order. "if the party at whose instance the reference is made fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, this court is not bound to answer the reference".
Smt. Bugli Devi vs. ITO 3. In the case of CIT Vs. Multiplan India Pvt. Ltd. 38 ITD 320 (Del). The appeal filed by the revenue before the Tribunal which was fixed for hearing but on the date of hearing nobody represented neither the revenue applicant nor any communication for adjournment was received. There was no communication or information as to why revenue choose to remain absent on that date The Hon'ble Tribunal laid down the principle that on the basis of inherent power the appeal filed by the appellant can be treated as un-admitted.
4.1.1 Keeping in view the above facts of appellant's non-prosecution of this pending appeal and also placing reliance on above citations, appellants appaal is to be treated as not maintainable.
4.1.2 In this case assessment order u/s 147/144 was passed by the AO on 02.12.2019. The same was confirmed by the CIT (A), vide order u/s 250 of the Act dated 25.09.2023. Therefore, the assensee doesn't deserve any relief on merit also The approach of the assessee amply shows that she is not interested in prosecuting the appeal. Therefore, having considered the entire facts of the case and evidence available on record, the appeal so filed is dismissed.
In the result, the appeal is dismissed.”
5. Aggrieved from the order of ld. CIT(A), assessee preferred an appeal before us. During the course of hearing, the ld. AR for the assessee submitted that the quantum appeal has been heard on 06.06.2024 by the ITAT in dated 10/06/2024. In that order the assessment order in quantum proceeding set aside to be framed afresh and therefore the levy of penalty if any to be decided in that proceedings.
Smt. Bugli Devi vs. ITO 6. Per contra, the ld. DR made no objection.
We have heard the rival contentions and perused material available on record. As the quantum proceeding is set aside to the file of AO the levy of penalty on that afresh proceeding be also rest with that ld. AO to be decided afresh. Hence, the appeal of the assessee in penalty proceeding becomes in fructuous when the quantum order is set aside.
In the result, the appeal of the assessee is disposed off as indicated herein above.
Order pronounced in the open court on 28/06/2024. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/06/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Smt. Bugli Devi, Jaipur. 1. izR;FkhZ@ The Respondent- ITO, Ward-7(2), Jaipur. 2. 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZQkbZy@ Guard File 5. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत