SH. PRABHJIT SINGH SIDHU,MOHALI vs. DCIT, CIRCLE (INTL. TAXATION), CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘SMD’, CHANDIGARH

BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.1601/Chd/2017 (Assessment Year : 2009-10) Shri Prabhjit Singh Sidhu, Vs. The D.C.I.T., F-502, Rishi Apartment, Circle-Chandigarh Sector 70, Mohali. (International Taxation), Chandigarh. PAN: BIPPS2213D (Appellant) (Respondent)

Appellant by : Shri Tej Mohan Singh, Adv. Respondent by : Shri Manoj Kumar, Sr. DR Date of hearing : 03.07.2018 Date of Pronouncement : 11.07.2018

ORDER PER ANNAPURNA GUPTA, A.M. :

This appeal has been preferred by the assessee against

the order of learned Commissioner of Income Tax (Appeals)-

43, New Delhi (hereinafter referred to as CIT(Appeals))

dated 11.9.2017, upholding penalty levied u/s 271(1)(c) of

the Income Tax Act,1961, (hereinafter referred to as “Act”)

relating to assessment year 2009-10.

appeal:

“1. That the Ld. Commissioner of Income Tax(Appeals) has erred in law in holding that the penalty proceedings initiated were valid even though the assessing officer had failed to mention whether notice under section 271(l)(c) issued was for concealment of income or for furnishing inaccurate particulars of income in utter disregard of decisions of and as such penalty upheld in pursuance of an invalid notice is illegal, arbitrary & unjustified.

2 ITA No.1601/Chd/2017 A.Y. 2009-10

2., Without prejudice to the above, the Ld. Commissioner of Income Tax has erred in law as well as on facts in upholding the imposition of penalty of Rs.1,52,960/- under section 271(l)(c) of the Act without any reasoning on merits of the case which is illegal, arbitrary & unjustified. 3. That the penalty imposed under section 271(l)(c) of the Act is not imposable in as much as there is neither any concealment of income nor furnishing of any inaccurate particulars of income and as such the order passed under section 271(l)(c) of the Act is illegal, arbitrary & unjustified. 4. That the order of the Ld. Commissioner of Income Tax (Appeals) passed under section 271(l)(c) of the Act is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.” 3. Ground No.1 was not pressed before us and the same

is, therefore, dismissed as not pressed.

the Ld. counsel for assessee pointed out that the said

grounds related to the merits of the case wherein the

contention of the assessee was that the assessee could not

be charged to have either concealed or furnished any

inaccurate particulars of income in the facts of the case.

The Ld. counsel for assessee at the outset pointed out that

the Ld.CIT(Appeals) had failed to adjudicate the issue on

merits raised before it. The Ld. counsel for assessee pointed

out that penalty in the present case had been levied on the

addition made on account of cash deposits of Rs.4,50,000/-

remaining unexplained. It was pointed out that before the

Ld.CIT(Appeals) the assessee had raised both the legal

grounds and had also argued the case on merits. Drawing

our attention to the submissions made on merits before the

CIT(A), reproduced in para 3, page 3 &4 of the

3 ITA No.1601/Chd/2017 A.Y. 2009-10

CIT(Appeals)’s order, the Ld. counsel for assessee pointed

out that it was explained to the CIT(A) that the cash had

been deposited by the first cousin of the assessee who was

a man of means and since he had expired, no evidence in

this regard could be gathered. It was pointed out that on

account of the same, the addition had been upheld in

appeal also. The Ld. counsel for assessee pointed out that

copy of reply ,death certificate etc. had all been filed before

the CIT(A) and it had been explained to the CIT(Appeals),

that merely because addition had been upheld did not lead

to automatic levy of penalty. The Ld. counsel for assessee

thereafter pointed out from the order of the CIT(Appeals)

that the CIT(Appeals) had only dealt with the legal ground

raised by the assessee and had not dealt with the

contentions raised on merits of the case. The Ld. counsel

for assessee, thereafter, pleaded that the issue be restored

back to the CIT(Appeals) to adjudicate the issue on the

merits of the case.

failed to adjudicate the issue on merits.

issue back to the file of the CIT(Appeals) to adjudicate the

issue of levy of penalty on the merits of the case. It is

further directed that the assessee be given due opportunity

of hearing and is free to adduce all evidences in support of

its contentions.

4 ITA No.1601/Chd/2017 A.Y. 2009-10

Ground of appeal Nos.2, 3 & 4 are therefore allowed for

statistical purposes.

allowed for statistical purposes.

Order pronounced in the Open Court.

Sd/- Sd/-

(SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 11th July, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR

Assistant Registrar, ITAT, Chandigarh