MR. GANESH AYODHYAPRASAD JAISWAL,NANDED vs. ASSESSING OFFICER, WARD, NANDED

There is a delay of 135 days in filing of these appeals before the Tribunal, for which the assessee has filed condonation applications along with affidavits explaining the reasons for such delay. After considering the contents of the condonation applications filed along with affidavits and after hearing the Ld. DR, the delay in filing of these appeals is condoned and the appeals are admitted for adjudication.

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the CIT(A) / NFAC in confirming the penalty of Rs.10,000/- levied u/s 271(1)(b) of the Act.

Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for the year under consideration. Information was received through ITBA Multi year NMS that the assessee has deposited cash of Rs.1,45,50,000/- in Savings account maintained with State Bank of India, Mandvi Branch, Nanded and also had received interest of Rs.11,493/- during the financial year 2015-16 relevant to assessment year 2016-17. However, the assessee had not filed his return of income. Therefore, after obtaining the approval of the competent authority, the case of the assessee was reopened and notice u/s 148 of the Act was issued on 04.10.2021 and again on 16.11.2021. In response to the notice, the assessee submitted only P&L, Balance Sheet, bank statement and copy of Licence on 23.11.2021. Therefore, the Assessing Officer issued a show cause notice along with draft assessment order on 19.03.2022 asking for further details as per the notice on or before 22.03.2022. Since, there was no response from the side of the assessee, therefore, the Assessing Officer determined the income of the assessee u/s 44AD of the Act at 8% of the deposits and accordingly determined the total income from business at Rs.11,64,000/-. He further made addition of interest of Rs.11,493/-. Since the assessee did not respond to the various notices issued by the Assessing Officer, he initiated penalty proceedings u/s 271(1)(b) of the Act and levied penalty of Rs.10,000/-.

In appeal, the CIT(A) / NFAC confirmed the penalty so levied.

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

We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. It is an admitted fact that the assessee did not file the return of income in response to notice u/s 148 nor responded to the statutory notices issued by the Assessing Officer for which the assessment was completed u/s 144 of the Act. It is not a case that the assessee has not received the notices issued by the Assessing Officer. The submissions of the Ld. Counsel for the assessee that the business was run by the mother of the assessee and assessee was only joint holder of the bank account cannot absolve the assessee from the provisions of the Act, especially when despite receipt of the notices he failed to file the details before the Assessing Officer nor filed any adjournment application. Further, the assessment was also completed u/s 144 of the Act and not u/s 143(3). Under these circumstances, we do not find any infirmity in the order of the CIT(A) / NFAC confirming the penalty of Rs.10,000/- levied by the Assessing Officer u/s 271(1)(b) of the Act. Accordingly, the same is upheld and the grounds raised by the assessee are dismissed.

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the CIT(A) / NFAC in confirming the penalty of Rs.5,000/- levied u/s 271F of the Act.

After hearing both the sides, we find the Assessing Officer levied penalty of Rs.5,000/- u/s 271F of the Act on the ground that the assessee failed to furnish the return of income within the specified time allowed u/s 139(1) of the Act nor filed the return in response to the notice u/s 148 of the Act.

In appeal, the CIT(A) / NFAC sustained the penalty so levied by the Assessing Officer on the ground that the assessee could not substantiate before him that his income was below the taxable limit, for which he is not required to furnish the return of income.

We do not find any infirmity in the order of the CIT(A) / NFAC on this issue. If the income of the assessee was below the taxable limit, nothing prevented the assessee from filing the return of income in response to notice u/s 148 of the Act showing ‘nil’ income or below taxable income. However, despite service of notice u/s 148 of the Act, the assessee did not file any return in response to the same nor had filed the return u/s 139(1) of the Act. The Ld. Counsel for the assessee also could not substantiate as to why the penalty so levied u/s 271F of the Act by the Assessing Officer and sustained by the CIT(A) / NFAC should not be confirmed. In view of the above, penalty of Rs.5,000/- levied by the Assessing Officer u/s 271F of the Act and sustained by the CIT(A) / NFAC is upheld. The grounds raised by the assessee are accordingly dismissed.

Although a number of grounds have been raised by the assessee, however, these all relate to the order of the CIT(A) / NFAC in confirming the penalty of Rs.1,93,173/- levied by the Assessing Officer u/s 271(1)(c) of the Act.

The Ld. Counsel for the assessee at the outset filed a copy of the order of the Tribunal in assessee’s own case vide order dated 07.08.2024 for assessment year 2016-17 and submitted that the quantum proceedings have been restored to the file of the CIT(A) / NFAC and therefore, he has no objection if the issue is restored to the file of the CIT(A) / NFAC for adjudication of this issue afresh after quantum appeal is decided.

The Ld. DR has no objection for the above proposition.

In view of the order of the Tribunal restoring the quantum proceedings to the file of the CIT(A) / NFAC for adjudication afresh, we deem it proper to restore the issue of penalty u/s 271(1)(c) of the Act to the file of the CIT(A) / NFAC to decide the issue afresh after quantum proceedings are decided. Needless to say, the CIT(A) / NFAC shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeals filed by the assessee vide 731/PUN/2024 are dismissed and the appeal filed by the assessee vide is allowed for statistical purposes.