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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 5/JP/2023
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Vikas Yadav jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary, Addl. CIT-DR alquokbZ dh rkjh[k@ Date of Hearing : 28/02/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 17 /03/2023 vkns'k@ ORDER
PER DR. S. SEETHALAKSHMI, JM
This appeal filed by the assessee is directed against order of the ld. CIT(A), dated 30-11-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2018-19 wherein the assessee has raised the following grounds of appeal.
‘’That the ld. CIT(A), NFAC, Delhi acted unlawfully in upholding the impugned order imposing penalty of Rs.82,256/- by the ITO, Ward-1, Alwar solely and exclusively relying upon the findings in the quantum proceedings because the appellant could not reply the penalty proceedings without going into the record available with the Department that Ld. CIR(A), Alwar has already deleted the addition of Rs.4,76,500/- out of Rs.5,76,500/- in the appeal made before him against quantum order, therefore, the order passed by ld. CIT(A) is altogether unfounded, unjustified and untenable in law. On the facts and under circumstances of the case the penalty levied u/s 271(1)© of the Act is void as the notice u/s 274 read with section 271 is bad and defective as it issued without deleting the appropriate clause under which the penalty is proposed to be imposed is either for filing of inaccurate particulars of income or concealment of income and as such the notice is not sustainable and not curable. The ld. CIT(A), NFAC Delhi has not considered the land mark decision by Apex Court in Hindustan Steel Ltd. vs State of Orissa (1972) 83 ITR 26 (SC) that penalty can be levied if assessee had acted deliberately i.e. mens rea, guilty mind is essential before penalty and in our case assessee duly explained about source of cash deposit into bank before AO, Alwar with supporting documents which shows appellant has never acted deliberately or guilty mind.’’ 2.1 During the course of hearing, the Bench noted that the ld, CIT(A), NFAC, Delhi has dismissed the appeal of the assessee ex-parte by observing as under:-
‘’7. Held:- During the course of appeal proceedings, no reply has been filed by the appellant. I have perused the order of the Assessing Officer and considered the facts of the case. The appellant has not pursued the above appeal despite being granted several opportunities as elaborated above. No details, documents or submission have been provided by the appellant substantiating its grounds of appeal. The mere facts mentioned in Form No. 35 cannot be considered in the absence of any supporting documentary evidence and submission. The AO has passed a very reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order is called for. All the grounds of appeal are therefore dismissed.
2.2 During the course of hearing, the ld. AR of the assessee prayed that it is also undisputed fact that the AO, Alwar initiated the penalty proceedings u/s 271(1)© of the Act, 1961 and imposed the penalty of Rs.82,256/- on the entire addition amount of Rs.5,76,500/- vide penalty order dated 27-05-2019 which was subsequently confirmed by ld.CIT(A) National Faceless Appeal Centre (NFAC) vide order dated 30-11-2022 ignoring the fact that ld. CIT(A), Alwar had already deleted the addition of Rs.4,76,500/- out of addition of Rs.5,76,500/- and thus the penalty should be imposed on the balance amount of addition of Rs.1.00 lac and not the full amount of addition of Rs.5,76,500/-. 2.3 On the other hand, the ld. DR did not object to the submission of the ld.AR of the assesse. 2.4 We have heard both the parties and perused the materials available on record. The Bench while disposing off the appeal of the assessee noted that the ld. CIT(A), Alwar vide his order dated 5-09-2019 has sustained the addition to the extent of Rs.1.00 lac. The relevant observation of the ld. CIT(A), Alwar at para 4.4 of his order is reproduced as under:-
‘’4.4 I have considered the above mentioned facts of the case, The appellant has file cash flow statement who shows opening cash balance of Rs.1,76,500/- as on 01-04-2010. The appellant had withdrawn cash of Rs.1 Lakh on 18-03-2010 and Rs.1,70,000/- on 20- 03- 2010 from her own bank accounts. Therefore, it is reasonable to believe that Rs.1,76,500/- shown as opening cash balance as on 01- 04-2010 is genuine. The appellant has also submitted that she received an amount of Rs.3 Lakhs from Shri Bharatmal during the year under consideration. Shri Baharatmal has filed affidavit and also given PAN details, his land holding papers and proof of agricultural produce in order to prove that he has enough liquidity to advance loan of Rs.3 lakhs. In my considered view, the appellant has discharged its onus as required u/s 678/69 of the Act so far as the advancement of loan of Rs.3 Lakhs is concerned. Accordingly, the source of Rs.3 Lakhs in my considered view is explained. The AO has accepted the source of Rs,4 lakhs received from Smt. Prem Devi as against the claim of Rs.5 lakhs. The appellant has submitted that Rs.1Lakh has not been considered as withdrawn from her other bank accounts. However, no such evidences have been produced. Accordingly, the AO is justified in accepting explanation to the extent of Rs.4 Lakhs out of claim of Rs.5 lakhs. Accordingly, the addition to the extent of Rs.1 Lakh is sustained and the appellant’s ground of appeal on the issue is partly allowed..’’ Hence, in view of the findings of the ld. CIT(A), Alwar, dated 5-09-2019, the AO is directed to recompute the penalty amount and thus the appeal of the assessee is allowed for statistical purposes.
6.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17/03/2023.