SUSHMA PRADIP POWAR,KOLHAPUR vs. INCOME-TAX OFFICER, WARD - 2(2), KOLHAPUR

These three appeals filed by the assessee against the common order dated 11-01-2018 passed by the Commissioner of Income Tax (Appeals)-2, Kolhapur [„CIT(A)‟] for assessment year 2008-09.

The only issue is to be decided is as to whether the CIT(A) justified in confirming the penalty of Rs.10,000/- levied u/s. 271(1)(b) of the Act in the facts and circumstances of the case.

We find no representation on behalf of the assessee nor any application filed seeking adjournment. Thus, the assessee called absent and set ex-parte. Therefore, we proceed to dispose of the case by hearing the ld. DR and examining the material available on record.

Heard ld. DR and perused the material available on record. We note that the assessee is an individual. The AO, on an information received, on verification found the assessee has two accounts in M/s. Parshwanath Co- operative Bank Ltd. at Rajarampuri Branch, Kohapur which is as under : Sr. No. Type of Bank Account Cash deposit/Credit entries (Rs.) 1 Loan Account No. 003060900000057 3,96,770/- 2 Saving Account No. 003020000002231 56,424/- Total 4,53,194/-

In the light of the above, we note that the AO issued notice u/s. 148 of the Act and consequently notice u/s. 142(1) of the Act seeking explanation. According to the AO, the assessee having receipt of the said notices no return of income was filed in response to notice u/s. 148 of the Act and no explanation was furnished in respect of source of cash deposits in loan account and as well as in saving account in the above said bank. Thereby, the AO treating an amount of Rs.4,53,194/- as undisclosed income for A.Y. 2008-09 completed the assessment to the best of his judgment u/s. 144 of the Act. As matter stood thus, the AO initiated penalty proceedings also u/s. 271(1)(b) of the Act for failure to comply notices u/s. 142(1) of the Act and imposed penalty of Rs.10,000/- u/s. 271(1)(b) of the Act.

The said penalty order was challenged before the CIT(A). We note that the CIT(A) in the impugned order at Para No. 5 by holding that the assessee did not indicate any reasonable cause for non-appearance before the AO and confirmed the penalty imposed by the AO. We note that, it was submitted by the assessee before the CIT(A) that there was no intention of the assessee to conceal any information from the AO. The AO did not give repeated reminders by any mode to the assessee as well as no proper time was given to submit evidences. It was also contended that all the information relating to the said loan account and saving account furnished along with explanation but however the AO with prejudice manner neither took the submissions nor took the attendance sign on the proceedings. Further, it was stated that the said proofs are with the inward register maintained by the Security Officer of the Income Tax Officer, Kolhapur. Further, we note that the AO observed in Para No. 8 of its order that no return of income filed in response to notice u/s. 148 of the Act but however we note that it was stated before the CIT(A) vide statement of facts that return of income was filed by the assessee for A.Y. 2008-09 which was also enclosed along with the submissions furnished to the AO in the assessment proceedings and we find no contrary statement brought on record by the respondent-revenue before us. Therefore, taking into consideration the submissions of the assessee made through statement of facts before the CIT(A), we consider the assessee is able to show reasonable cause for non-appearance before the AO, which itself, in our opinion, no penalty could be imposed u/s. 271(1)(b) of the Act. Thus, the order of CIT(A) is not justified and penalty imposed by the AO as confirmed by the CIT(A) is deleted. Accordingly, the sole ground raised by the assessee is allowed.

The ld. DR stating that the issues raised in the appeal and the facts in & 699/PUN/2018 are identical to ITA No. 697/PUN/2018. Since, the facts in ITA Nos. 698 & 699/PUN/2018 are similar to ITA No. ITA No. 697/PUN/2018, the findings given by us while deciding the appeal of assessee in ITA No. 697/PUN/2018 would mutatis mutandis apply to ITA Nos. 698 & 699/PUN/2018, as well. Thus, sole ground raised by the assessee is allowed.

In the result, all the three appeals of the assessee are allowed.