ARUN KUMAR SHARMA,FIROZABAD vs. INCOME TAX OFFICER , FIROZABAD

The only effective issue to be decided in this appeal is as to whether the ld NFAC was justified in confirming the addition made on account of cash deposits of Rs 36,59,641/- and consequential levy of penalty under section 271(1)(c ) of the Act in the sum of Rs 10,32,000/- in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. The assessee did not file any return of income for the assessment year 2010-11. No compliance was made by the assessee during the course of assessment proceedings. The Learned AO observed that there were cash deposits made in State Bank of India, Usaini, Firozabad during the financial year 2009-10 amounting to Rs 36,59,641/- by the assessee and sought explanation of source for the same. Since there was no compliance made by the assessee, the Learned AO was forced to complete the assessment under section 144 read with section 147 of the Act on 24.10.2017 determining total income at Rs 36,59,641/- and initiate penalty for concealment of income under section 271(1)(c ) of the Act. The appeal was decided by the Learned NFAC exparte. Since the quantum got confirmed in first appeal, the Learned AO levied concealment penalty under section 271(1)(c ) of the Act in the sum of Rs 10,32,000/-. Hence there are two appeals filed before us (one on quantum and other on penalty).

On perusal of the order of the ld NFAC, we find that the ld NFAC had decided the issue ex parte without adjudicating the issue on merits giving its independent finding on the quantum proceedings. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to file of ld NFAC for de novo adjudication in accordance with law. Needless to mention the assessee be given reasonable opportunity of being heard. The assessee is directed to cooperate with ld NFAC for expeditious disposal of the appeal by not taking unwarranted adjournments. Hence, the grounds raised by the assessee are allowed for statistical purposes for the quantum proceedings.

Since the quantum proceedings are restored to the file of Learned NFAC, the penalty proceedings are also restored to the file of Learned NFAC for denovo adjudication in accordance with law with the same directions as in quantum proceedings.

In the result, both the appeals of the assessee are allowed for statistical purposes.