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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JUDICIAL MEMBER AND SRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER (A Y: 2006-07) Oriental Veneer Products P. Ltd., Vs. The Dy. Commissioner of Income Tax- 25, Mohammedi Lakda Bazar No.1, 7 (1), Aayakar Bhavan, M. K. Road, Maulana Shaukat Ali Road, Grant Mumbai Road, Mumbai -08 PAN:AAACO 0490 M Appellant .. Respondent .. Appellant by None Respondent by .. Shri K.Mohandas, DR Date of hearing .. 27-07-2016 Date of pronouncement .. 27-07-2016 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the assessee is arising out of the order of CIT (A)-13, Mumbai passed in appeal No.CIT (A)-13/I.T-20/12-13 dated 14-10-2014. Assessment was framed by the ITO 7 (1) (1), Mumbai for assessment year 2006-07 vide his order dated 24-12-2008 u/s 144 of the Income Tax Act, 1961 (hereinafter “the Act”). The penalty under dispute was levied by the DCIT, Circle-7(1), Mumbai u/s 271 (1) (c) of the Act vide his order dated 30-03-2012.
At the outset, it is noticed that the penalty under dispute levied by the AO u/s 271 (1) (c) of the Act, confirmed by the CIT (A) will not survive for the reasons that the assessment itself has been set aside by the Tribunal while hearing the quantum appeal in vide Order dated 11-03-2016 by observing in Para 4 as under:- “4. The perusal of the above referred to documents reproduction reveals that there is a gross miscarriage of justice done by the AO with the assessee. Neither any order sheet has been prepared /maintained nor the AO has given proper opportunity to the A. R. of the assessee to represent his case. From the affidavit of the A. R. of the assessee namely Shri Vinod R. Agarwal, it reveals that he has been very pertinent, not only to appear before the AO but to file the AO, but, despite that the AO proceeded to pass ex-parte assessment order under section 144 of the Act. Despite the last letter filed by the Ld. A. R. of the assessee on 17.12.08, the A. O. passed assessment order on 24.12.08 ex-parte of the assessee. The Ld. A. R. has affirmed in the affidavit that he had appeared before the AO on 22.12.08 but the AO refused to accept his submissions and hear him. We find that the act and conduct of the AO in this case is against the principles of justice and fair play. Even the Ld. CIT (A) has also not considered the above facts of non granting of proper opportunity to the assessee by the AO while deciding the appeal of the assessee. There is a gross violation of natural justice, equity and fair play in this case by the A. O. Even the AO has also not maintained the order sheet and has failed to pass the date-wise orders during the assessment proceedings which shows the lack slide and negligent attitude of the AO while framing the impugned assessment order in this case. Such an assessment order, thus, is not sustainable in the eyes of law and the same is hereby set aside. The matter is remanded back to the file of the AO to pass a fresh assessment order in this case after giving due and proper opportunity to the assessee to present its case. The AO will maintain a proper order sheet with date-wise orders mentioning the details/events/proceedings taken on each date”.
On query from the Bench, the learned Sr. DR fairly conceded to the position.
After hearing the learned Sr. DR and going through the facts of the case, we are of the view that once the quantum assessment has been set aside the matter is remanded back to the file of the AO for fresh adjudication, penalty levied by the AO u/s 271 (1) (c) of the Act and confirmed by the CIT (A) will not survive. Accordingly, we set aside the orders of the lower authorities and delete the penalty. However, in case the AO is satisfied during completion of set aside assessment proceedings, that this is a fit case for initiation of penalty proceedings, he may do so as per law.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 25/07/2016.