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Income Tax Appellate Tribunal, BENCH “E”, MUMBAI
Before: SHRI B.R.BASKARAN & SHRI PAWAN SINGH
Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JM: 1. This appeal u/s 253 of the Income Tax Act (the Act) is filed by legal heir of assessee (Late Annappa Shetti) against the order of ld. CIT(A)-11, Mumbai dated 22.05.2013 for Assessment Year (AY) 1998-99. The assessee has raised the following grounds of appeal:
1. On facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals) 11, Mumbai, (CIT)A erred in confirming the levy of penalty of Rs. 3,03,550/- u/s 271(1)(c) of the Act.
2. The CIT(A) failed to appreciate that the Source of the Gift of Rs. 5,00,000/-, Capital Introduction of Rs. 1,90,000/-, and cash deposit of Rs. 3,24,500/- was properly explained by the assessee.
3. The appellant prays that the penalty levied Rs. 3,03,550/- may please be deleted.
2. Brief facts of the case are that the appellant filed return of income for relevant AY on 01.01.1998 declaring total income of Rs. 1,97,260/-. The return of income was 2 Mrs. Sujatha A. Shetty processed u/s 143(1) of the Act on 01.11.1999 resulting refund of Rs. 11,860/-. Subsequently, the return of income was re-opened u/s 147 and the assessment order was completed u/s 143(3) r.w.s. 147 of the Act determining the total income at Rs. 28,31,760/-. In the re-assessment proceeding, the Assessing Officer (AO) made the disallowance of gift of Rs. 5,00,000/- from Narayan D. Shetti, addition u/s 68 of Rs. 11,50,000/-, on account of cash deposit and further addition of Rs. 6,60,000/- on account of capital introduction. On appeal before the ld. CIT(A), the disallowance of Gift of rs.5.00 Lakh was sustained. However, out addition of Rs. 11,50,000/- on account of cash deposit Rs. 3,24,000/ was sustained. Out of addition of Rs. 6,60,000/- of addition of capital account Rs. 1,90,000/- was sustained. Accordingly, the AO initiated penalty proceeding u/s 271(1)(c) of the Act. Notice u/s 274 r.w.s. 271(1)(c) was issued on 26.03.2003. The legal heir of the assessee contested the penalty proceeding and contended that the additions were made in the re-assessment proceeding and the substantial addition of quantum in addition have been reduced. The contention of assessee was not accepted by the AO and the AO levied the penalty @ 100% of the tax which was sought to be evaded. The AO calculated penalty of Rs. 3,03,350/- in its order dated 31.03.2005. On appeal before the ld. CIT(A), no relief was granted. Thus, further aggrieved by the order of ld. CIT(A), the present appeal is filed before us.
3. We have considered the rival contention of the parties and gone through the order of authorities below. The ld. AR of the assessee argued that the ld. CIT(A) concluded in the impugned order that no explanation was offered, though assessee has filed written submission before him, that may be considered as explanation on behalf of assessee. The Ld. AR of the assessee further argued that the present appeal is being pursued by legal heir of assessee and the matter is very old and all the documents relating to the relevant AY are not in power and possession of the LR’s of assessee. The Ld. AR of the assessee filed on record the copy of written submission filed before the ld. CIT(A). It was argued that ld CIT(A) passed the order Ex-party without giving opportunity to further explaining the fact of the case. In support of submission the Ld.AR of the assessee relied upon the decision of ACIT vs. Smt. Vimla Mali (109 ITR 0555 (All) , Late N. R. Palanivel Vs. CIT (2015) 273 CTR 0224(Mad), Navinbhai M. Patel vs. ITO (27 ITD 0411) and