DR. SAUMABHA DASGUPTA,KOLKATA vs. CIT(APPEAL)-21 & ITO, WARD NO. 55(3), KOLKATA, KOLKATA

Thereby, the Assessee filed this Stay Application in SA No. 46/Kol/2016 in AY 2009-10 praying this Tribunal

The above said stay application came up for hearing on 4-11-2016 and the Ld.AR submitted that the penalty proceedings as conducted by the AO was not in the knowledge of the assessee and no notices were received by the Assessee from the CIT-A in the appellate proceedings and urged to remand the appeal to the file of the CIT-A, but, however, the Ld.DR raised an objection that this Tribunal cannot dispose off the said appeal as it was not listed for hearing before the Bench and the stay application is being listed for hearing. Taking into consideration such objection of the Ld.DR, we directed the registry to fix the Stay Application along with said appeal on 11- 11-2016. On 11-11-2016 the Ld. DR has filed adjournment application and the same is rejected. Therefore, we dispose off the case of assessee after hearing the Ld. AR and perusing the material available on record on merits.

Before adverting to the merits of the case, let us examine the facts of the case in the light of the submissions of the Ld.AR as made by him during the course of hearing of stay application that the AO conducted the penalty proceedings behind the back of the Assessee. The assessee is an individual and is a Doctor by profession and derives his income from salary and receipts through profession and on CT scan machines. The assessee filed his return of income through online by declaring a total income of Rs.15,52,822/- on 16-01-2010. Under scrutiny notice u/s. 143(2) and thereafter, notice u/s. 142(1) was issued to the assessee. In response to which, the assessee filed audit report, profit & loss account, balance sheet for the year under consideration.

During such proceedings, the AO basing on AIR information found that the assessee deposited cash to an extent of Rs.20,83,060/- in his saving bank account and bank statement u/s. 133(6) of the Act from the bank was obtained. In explanation, the assessee produced the evidence regarding

Aggrieved by such order u/s. 143(3) of the AO the assessee preferred an appeal before the CIT-A, wherein the Assessee raised additional ground claiming 40% depreciation on CT scan machines and according to CIT-A, thereafter, the Assessee filed an letter dt:29-01-2013 before him seeking to withdraw the additional ground and requested to consider the depreciation at 15% as claimed in the original return. Another contention as raised by the Assessee before the CIT-A was that in respect of interest amount being the interest paid on personal loan debited inadvertently to the profit and loss account. Having heard the Assessee in person, the CIT-A confirmed the order of the AO at page no-31 of paper book.

The assessee assailed the order of CIT-A before the Tribunal and the Assessee succeeded before the Tribunal. The Tribunal held that though the nomenclature of loan as stated by the Assessee as “personal loan” would not make interest thereon per se disallowable and when the loan amounts have been used for the purpose of business and irrespective of the name of the loan, interest thereon is allowable in para-5 at page no-36 of paper book. Regarding the claim of depreciation, the Tribunal held that the CT scan is a life saving medical monitoring equipment and it is eligible for enhanced depreciation at 40%, while holding the same, it is pertinent to note that, the Tribunal observed that it is the duty of the AO to ensure that an Assessee gets all the deduction and allowances statutorily allowable irrespective of the fact that whether the Assessee claimed properly or not in para-6 at page no- 36 of paper book.

The Revenue preferred an appeal before the Hon’ble High Court of Calcutta, wherein the Hon’ble Calcutta High Court has modified the order of S.P No. 46/Kol/2016 4 [In Dr. Saumabha Dasgupta Tribunal by allowing the depreciation at the rate of 15% as against 40% as held by the Tribunal at page no-39 of paper book. In pursuance of such order the assessee preferred an application before the AO for amendment of assessment claiming loss of Rs.17,19,676/- at page no-40 of paper book. According to assessee, the AO determined the total income of the Assessee at Rs.15,52,820/- at page no-42 of paper book and immediately, raised a demand under notice u/s. 156 of the Act to pay an amount of Rs.5,36,162/- on the same day i.e 18-02-2015 at page no-41 of paper book.

Immediately, thereafter, the assessee questioned the same before the Hon’ble High Court of Calcutta in W.P no. 433 of 2015, wherein the Hon’ble High Court of Calcutta disposed of such writ petition by observing that the assessee shall approach the appellate authority within six weeks and directed the revenue to not to take any coercive action against the assessee till the disposal of such appeal at page no-46 of paper book.

Accordingly, the assessee preferred an appeal before the CIT-(A)-6 on 19-6-2015 at page no-47 of paper book, according to Assessee and it is evident from the order impugned in para no-3.1 that the said appeal is pending adjudication.

According to the Assessee the appeal filed against order u/sec 271(1)(c) of the Act was transferred to the file of CIT-(A)-21 from CIT-(A)- XXXVI without any intimation to the Assessee and submitted that the address of the Assessee changed and that the new address was in the knowledge of the Revenue authorities and version of which is supported by his submissions in para-8 at page no-6 of paper book. The CIT-(A)-21 confirmed the penalty as imposed by the AO as was the outstanding demanded under notice dated 29-06-2012 of Rs.8,94,729/- is the impugned demand as raised by the AO u/sec 156 of the Act.

Before us the Ld. AR submits that the notice for initiation of penalty proceedings as submitted above could not be properly served on the assessee as the assessee changed his address. The Assessee came to the knowledge of such proceedings when the demand as impugned received by the Assessee. The change of address was also intimated to the respondent revenue in the appellate proceedings in which the original assessment order passed u/s. 143(3) of the Act was challenged and even the Assessee mentioned the new address before the Tribunal. Thereby, the assessee could not prosecute the appeal and no proper opportunity was afforded in the penalty proceedings before the AO and the CIT-A. The Ld.AR argued that there was no sufficient opportunity to the Assessee to prosecute his case before the AO and the CIT-A and the orders passed by them were ex-parte which are against law. The application for adjournment was filed by the Ld. DR, which was rejected for the reasons indicated above.

Heard submissions of Ld.AR and perused the material available on record. We find that as per direction of the Hon’ble High Court of Calcutta the assessee preferred an appeal before the CIT-A on quantum addition. As matter stood thus, the revenue initiated penalty proceedings against the assesse and the notices in such proceedings could not be served in view of the change of address. The address in the impugned order goes to show that the old address of the Assessee was mentioned therein. We find that the entire penalty proceeding was not in the knowledge of the assessee. The assessee received demand notice dated 29-06-2012, which was challenged before the CIT-A. Admittedly, the assessee could not prosecute the appeal before the CIT-A and the CIT-A passed an ex-parte order confirming the impugned penalty. Taking into consideration the facts and circumstances of the case and perusing the material available on record and the submissions of the assessee before us, in the interest of justice, we deem it fit and proper

In the result, the stay petition filed by the assessee is dismissed and appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 14th December,2016