DEEPAK AGARWAL,DELHI vs. ACIT, CC-13, DELHI

The roots for the levy of penalty lies in the assessment order framed U/s 153A read with Section 145(3) / 143(3) of the Act, wherein it was categorically held that the assessee was providing accommodation entries in the garb of loans and advances and therefore commission @ 2% was charged for providing the said entries.

The action of the AO was confirmed by the CIT(A). The AO initiated penalty proceedings U/s 271(1)(c) of the Act on such income of the assessee and levied penalty accordingly.

None appeared on behalf of the assessee inspite of several notices from 13.09.2022 till date, therefore, we decided to proceed ex-parte.

The DR brought to our notice that in the hands of the assessee substantive additions were made qua the appellate orders of the parties to whom assessee was providing accommodation entries. It is the say of the DR that the quantum of penalty may now be different if the appeal effect is given in respect of those parties who were the recipient of the accommodation entries. .- 1659/Del/2021 and two other appeals. Deepak Agarwal.

We find force in the contention of the DR, therefore, in the interest of justice and fair play, we restore the impugned appeals to the files of the AO. The AO is directed to decide the levy of penalty afresh after considering all the appellate decision in the cases of recipients of the accommodation entries provided by the assessee. Needless to mention, the AO should give a reasonable and adequate opportunity of being heard to the assessee.

In the result, appeals are allowed for statistical purposes.