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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
O R D E R
Per Shri Duvvuru RL Reddy, Judicial Member:
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1044219637(1) dated 28.07.2022 arising out of the orders passed u/s 271(1)(c) of the Income Tax Act, 1961 (in short “Act”) dated 26.03.2022 for the Assessment Year (A.Y.) 2013-14. Vijay Spinning Mills Ltd., Penamaluru
Brief facts of the case are that the assessee is a company, engaged in the business of manufacture and sale of cotton yarn, filed revised return of income admitting total income of Rs.5,32,900/- and book profit of Rs. (-)84,99,492/- u/s 115JB of the Income Tax Act, 1961 (in short “Act”). During the A.Y.2013-14, the assessee received compensation of Rs;3,53,20,44/- towards compulsory acquisition of land of 9505.20 sq.mtrs for road widening of NH9 from National Highways Authorities of India. Assessment order u/s 143(3) was passed on 30.03.2016 at a total income of Rs.3,58,09,210/-. The appeal against order u/s 143(3) was decided by the Ld.CIT(A) on 18.03.2019, based on which AO has passed consequential order dated 10.05.2019. An application was made u/s 154 for rectification of mistake which was rectified by order u/s 154 dated 03.09.2021. Show cause notices were issued to the company u/s 271(1)(c) to show cause regarding levy of penalty in respect of additions made in the order passed u/s 143(3) dated 30.03.2016. The assessee had furnished a reply vide letter dated 15.03.2022, but the AO rejected the submissions of the assessee and has passed an order u/s 271(1)(c) dated 26.03.2022 levying penalty @100% of tax sought to be evaded of Rs.68,38,430/-. Aggrieved by the order levying penalty u/s 271(1)(c), the assessee preferred an appeal before the Ld.CIT(A), claiming that the Vijay Spinning Mills Ltd., Penamaluru action of the AO is not supported by tax laws and that it is in violation of it’s constitutional rights. The Ld.CIT(A) had issued notices and served on the assessee, however, no written submissions were made by the assessee in response to the notices issued by the Ld.CIT(A). Therefore, the Ld.CIT(A) held that the onus is on the assessee to furnish submissions with relevant evidence(s), case laws, if any, in support of it’s claim but the assessee did not prosecute the appeal. The burden of proof is always on the person who makes the claim. In the instant case, since the assessee has not availed any opportunity to support it’s claim by responding to the notices issued by the Ld.CIT(A), by furnishing written submissions with relevant evidences, the Ld.CIT(A) upheld the additions made by the AO and dismissed the appeal of the assessee.
On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following grounds :
1. The order of the Hon’ble CIT(A) under section 250 of the Income Tax Act, 1961 (“the Act”) is passed without considering the request of the appellant to grant an additional time and thus bad in law.
2. The Hon’ble CIT(A) has erred in stating that the Appellant has not filed any reply despite of the fact that the Appellant has filed a request for the Adjournment. 3. That the order of the Hon’ble CIT(A) in dismissing appeal of the Appellant without giving sufficient opportunity of being heard is Vijay Spinning Mills Ltd., Penamaluru totally wrong, bad in law and needs to be quashed. The CIT(Appeal) disposed off the appeal in a hurry. 4. The order of the Learned Assessing Officer [“the Ld.AO”] under section 271(1)(c) of the Act dated 26th March, 2022 is contrary to Law, weight of evidence and probabilities of the case. 5. The order of the Ld.AO is passed after the limitation of time under section 275(1)(a) of the Act and therefore, barred by limitation. 6. The Ld.AO has erred by levying penalty on the additions arising out of difference in opinions. 7. The Ld.AO has erred by levying penalty on the addition of Rs.1,86,98,968/- despite of the fact the addition is made merely due to difference in opinion. 8. The Ld.AO has erred by levying penalty on the addition of Rs.23,78,022 which is merely a reclassification from revenue expenditure to capital expenditure. 9. Without prejudice to the above grounds, the Ld.AO erred by not considering the Indexed cost of acquisition in computing the penalty on the long term capital gain of Rs.1,86,98,968/-. 10. Without prejudice to the above grounds, the Ld.AO erred in computing the penalty by considering the tax rate of 32.45% on the long term capital gain instead of 20%. 11. The Appellant craves leave to add, alter, amend or withdraw all or any of the above Grounds of Appeal
at or before the time of hearing of the appeal.
4. All the grounds of appeal are related to levy of penalty. None appeared on behalf of the assessee either before the Ld.CIT(A) or before us to represent it’s case. However, in order to meet the ends of justice, we remit the matter back to the file of the Ld.CIT(A) to dispose the case on merits by giving opportunity of being heard to the assessee. We also Vijay Spinning Mills Ltd., Penamaluru direct the assessee to appear before the Ld.CIT(A) and cooperate with the proceedings.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 21st April, 2023. (एस बालाकृष्णन) (दुव्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 21.04.2023 L.Rama, SPS