NILIN J GUPTA,MUMBAI vs. ACIT CEN CIR 39, MUMBAI

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ITA 4891/MUM/2015Status: DisposedITAT Mumbai24 August 2016AY 2010-113 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the appeal to the file of the CIT(A) for fresh adjudication. This was to allow the assessee a reasonable opportunity of being heard and to ensure the merits of the penalty are considered.

What were the facts?

The assessee's appeal against a penalty order was dismissed by the CIT(A) ex parte due to the assessee's absence on the hearing date. The assessee contended that their absence was due to unintended reasons and that the CIT(A) did not consider their defense.

What were the issues?

Whether the CIT(A) erred in sustaining the penalty ex parte without considering the assessee's defense, and if the matter should be remanded for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 271AAA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “I”, MUMBAI

Before: SHRI G.S. PANNU & SHRI AMARJIT SINGH

For Appellant: Shri Vijay Kothari
For Respondent: Shri Deepak Ripote
Hearing: 20/07/2016Pronounced: 24/08/2016

The captioned appeal by the assessee is directed against the order of CIT(A)-54, Mumbai dated 22.06.2015, pertaining to the Assessment Year 2010-11, which in turn has arisen from the order passed by the Assessing Officer, Mumbai dated 22.06.2012 under section 271AAA of the Income Tax Act, 1961 (in short ‘the Act’).

2.

In this appeal, the only issue raised by the assessee relates to the action of CIT(A) in sustaining penalty of Rs.7,85,400/- imposed by the Assessing Officer u/s 271AAA of the Act.

3.

At the time of hearing, the learned representative for the assessee pointed out that the CIT(A) has sustained the levy of penalty in an ex parte manner where the say of the assessee was not on record. In this context, it has been pointed out that the CIT(A) has proceeded to dispose of the appeal ex parte on the ground that on the appointed date of hearing, i.e., on 18.6.2015 neither assessee attended and nor was any adjournment sought. It was pointed out that on this basis CIT(A) concluded that assessee was not interested in prosecuting the appeal. Before us, it has been pointed out that the assessee was very much interested in prosecuting the appeal, but the appellant could not attend on the appointed date for unintended reasons. It was also pointed out that the CIT(A) has chosen to merely affirm the order of Assessing Officer without considering the defence sought to be put up by the assessee, which was also available from the relevant discussion in the order of Assessing Officer. It was, therefore, contended that the assessee would be satisfied, for the present, if the appeal is restored back to the file of CIT(A) for adjudication afresh on merits.

4.

On the other hand, the Ld. DR appearing for the Revenue has not seriously opposed the plea of the assessee for remanding the matter back to the file of CIT(A) for adjudication afresh.

5.

We have carefully considered the rival submissions. In the present case, the controversy is with regard to penalty imposed u/s 271AAA of the Act with respect to assessment of undisclosed income as a consequence of search and seizure action. Insofar as merits of the levy is concerned, the same is not being addressed by us at this stage.

The CIT(A) has upheld the levy primarily reiterating the discussion made by the Assessing Officer in the penalty order. Ostensibly, CIT(A) did not have the benefit of the explanations from the side of the assessee as the order has been passed ex parte noticing absence of the assessee. Considering the plea of the assessee before us, in our view, it would be in the fitness of things that the matter is restored back to the file of CIT(A) for adjudication afresh after allowing assessee a reasonable opportunity of being heard and as per law. Thus, without going into the merits of the controversy, appeal is restored back to the file of CIT(A) for passing an order afresh in accordance with law.

6.

In the result, appeal of the assessee is treated as allowed for statistical purposes.

Order pronounced in the open court on 24th August, 2016.

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