PRABHU RANJAN SATPATHY,KEONJHAR vs. ITO, KEONJHAR WARD, KEONJHAR

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ITA 91/CTK/2016Status: DisposedITAT Cuttack03 August 2017AY 2010-114 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum appeal was restored to the file of the CIT(A) for adjudication, the penalty appeal should also be restored to the CIT(A) for adjudication on merits.

What were the facts?

The assessee was engaged in iron ore raising contract works and filed his return of income. The Assessing Officer (AO) made additions to the income and initiated penalty proceedings under Section 271(1)(c) for concealment of income. The CIT(A) confirmed the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when additions were made on estimation basis and the quantum appeal is pending. Whether the penalty appeal should be adjudicated along with the restored quantum appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI N.S.SAINI, AM & SHRI PAVAN KUMAR GADALE, JM

Hearing: 02/08/2017Pronounced: 03/08/2017

Per Shri Pavan Kumar Gadale, JM: The assessee has filed an appeal against the order of CIT(A), Cuttack, passed in ITAppeal No.471/2013-14, dated 08.12.2015, u/s.271(1)(c) & 250 of the Income Tax Act.

2.

The assessee has raised the grounds on the levy of penalty u/s.271(1)(c) of the Act irrespective of the fact that the AO has made addition on estimation basis.

3.

Brief facts of the case are that the assessee is engaged in the business of iron ore raising contract works and filed the return of income on 16.10.2010 with total income of Rs.12,10,000/-. Subsequently the assessment was completed u/s.143(3) of the Act with additions on 15.03.2013 and the ld. AO assessed total income at Rs.32,01,220/-, further the AO issued notice u/s.271(1)(c) of the Act and initiated the penalty proceedings and discussed with reasons for levy of penalty for 2 difference in the income offered by the assessee and income assessed and dealt at page 2 & 3 of the order and further ld. AO is of the opinion that the assessee has concealed income particulars and furnished the inaccurate particulars of income as discussed in his order and levied the penalty of Rs.6,20,000/- and passed the order u/s.271(1)(c) of the Act dated 25.09.2013. 4. Aggrieved by the order of the AO, the assessee has filed an appeal before the CIT(A). Ld. AR of the assessee has relied on the decision of Hon’ble Apex Court and submitted that the assessee has not suppressed any turnover and also the reconciliation of the turnover as per Form 26AS has been complied, but the ld. CIT(A) concord with the findings of AO and dismissed the appeal of the assessee.

5.

Aggrieved with the order of CIT(A), the assessee is in further appeal before the Tribunal.

6.

Before us, ld. AR of the assessee submitted that the CIT(A) has erred in confirming the penalty levied u/s.271(1)(c) of the Act and the fact that the AO has made addition based on the Form No.26AS and TDS was deducted on the income, since the income is estimated by the AO, the penalty u/s.271(1)(c) of the Act cannot be levied and prayed for deletion of penalty. Ld. AR further submitted that the assessee’s quantum appeal was restored to the file of CIT(A) by the Tribunal and is pending for disposal. Contra, ld. DR relied on the orders of the CIT(A).

7.

We heard the submissions and perused the material on record. Prima facie, the sole substantive ground raised by the assessee

3 challenging the levy of penalty u/s.271(1)(c) of the Act. On the query of the bench the ld. AR submitted that the quantum appeal has been restored back to the file of CIT(A) for adjudication by the coordinate bench of the Tribunal. We perused the order of the Tribunal passed in ITA No.50/CTK/2016, dated 28.10.2016, where the Tribunal has condoned the delay and restored the matter to the file of CIT(A) and observed at page 3 para 5 which reads as under :- “I have heard the rival submissions and perused the materials available on record. I am of the considered view that the assessee was under bonafide belief that till disposal of application nu/s.,154 of the Act by the Assessing Officer, ,the appeal before the ld. CIT(A) could not filed, hence, there was delay of 6 months and 24 days. This explanation of the assessee has not been found to be false by the ld. CIT(A). I am therefore, of the considered view that the assessee had bonafide and reasonable cause for delay in filing the appeal before the ld. CIT(A) by 6 months and 24 days. I therefore, set aside the order of the ld. CIT(A) and condone the delay of 6 months 24 days and direct him to decide the appeal of the assessee on merits after allowing reasonable and proper opportunity of hearing to both the parties. Since the quantum appeal is restored and pending for disposal before the CIT(A), we are of the substantive view that the penalty appeal shall also be restored to the file of CIT(A) for adjudication and accordingly, the appeal of the assessee is allowed for statistical purposes.

8.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 03/08/2017. (N. S. SAINI) (PAVAN KUMAR GADALE) लेखा सदस्य / ACCOUNTANT MEMBER न्याधयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनांक Dated 03/08/2017 प्र.कु.धि/PKM, Senior Private Secretary

4 आदेश की प्रधतधलधप अग्रेधषत/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant- Sri Prabhuranjan Satpathy, S/o.Lae Gobind Ch. Satpathy, At-Juruli, P.O.Jajang, Joda, District : Keonjhar, PIN-758052 2. प्रत्यथी / The Respondent- ITO, Keonjhar Ward, Keonjhar आयकर आयुक्त(अपील) / The CIT(A), 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कटक / DR, ITAT, Cuttack 5. गाडा फाईल / Guard file. 6. सत्याधपत प्रधत //// आदेशानुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपीलीय अधधकरण, कटक / ITAT, Cuttack

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