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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income-tax (Appeals)-5, Ludhiana, (in brevity ‘the CIT (A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2009-10. The impugned order was emanated from the order of the ld. DCIT, Central Circle, Jammu, (in brevity the ld. AO) order passed u/s 271(1)(c) of the Act.
The assessee has taken the following grounds:
“1. That the order of the Ld.CIT(A) is bad and against the facts & law.
2. That the Ld CIT(A) has erred in confirming the penalty amounting to Rs 316420/- u/s 271 (1)(c) read with Explanation 5A on the declared income in the return filed in response to notice u/s 153A of the Act after search and failed to appreciate the facts that there is no difference between assessed income & returned income/ declared income in response to notice u/s 153A of the Act. The Ld CIT(Central) appeals has also failed to appreciate the facts that AO has not discussed the merit a reason for levying penalty and he has passed order mechanically without application of mind.
3. That the Ld CIT(A) has erred in confirming the penalty without appreciating the facts that the Ld AO has not discussed the reasons for levying penalty & merit of additional income on which penalty has been levied.
4. That the appellant craves to added or amend the grounds of appeal before the appeal is finally heard and disposed off.”
Brief facts as culled out from the records are that the assessment was completed u/s 153A/143(3) of the Act. The demand is fixed. The assessee declared the income in the return of income u/s 139(1) amount of Rs.4,17,810/-.
In the pursuance of the notice u/s 153A the return was filed and the income was declared amount to Rs.14,01,650/-.In the assessment the ld. AO accepted the return file u/s 153A. But the penalty was initiated u/s 271(1)(c) considering the difference of tax in the return filed u/s 139(1) and 153A of the Act. The penalty was levied amount to Rs.3,16,420/- @ 100% on the difference of concealed income in two returns amount to Rs.10,24,000/-. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) during appeal accepted that there is no incriminating material in the assessee’s case. So, the assessment u/s 153A is uncalled for. But due to the difference of income in said two returns, the ld. CIT(A) accepted the observation of the ld. AO. The penalty order is upheld.
Being aggrieved assessee filed an appeal before us.
The appeal was called for hearing, none was present on behalf of the assessee. No adjournment petition was filed despite of several opportunities were allowed to the assessee but all the notices are remained unserved. Finally, on perusal of the record, we find that the notice of hearing was issued through E-mail and through the ld. DR. Considering the above fact, we proceed to adjudicate the appeal in ex parte qua for the assessee, after considering the submission of the ld. DR.
The ld. DR vehemently argued and relied on the order of the revenue authorities.
We heard the submission of the ld. DR, considered the documents available in the record and the order of the revenue authorities. The relevant para 2.3.4 of the CIT(A)’s order is reproduced as below:
“3.2.4 In the present case the AO has duly mentioned that the provisions of Explanation-5A to Section 271(l)(c) are attracted. During the appellate proceedings, the main argument of the AR was that no incriminating document was found. However, perusal of the assessment order shows that the additional income has-been declared by the assessee as a result of search. The extra income offered u/s 153A represent concealed income which was not declared in the return filed u/s 139(1) before the search and had there been no search this extra income would never have been brought to tax. Therefore, in view of the facts and circumstances of the case and in the light of the above judgment dated 31.10.2012 of the Hon'ble ITAT, Chandigarh Bench passed in the penalty imposed by the AO in this case by invoking Explanation-5A to section 271(l)(c) is found as per law and therefore upheld. Accordingly, this ground of appeal is dismissed.”
6.1 On perusal of the appeal order it is found that the appellate authority has accepted and there is no incriminating material against the assessee. So, the assessment u/s 153A is uncalled for. So, the legality of the assessment order is in question. Accordingly, the penalty order is also in question which is framed u/s 271(1)(c) of the Act. The penalty order stands on the quantum order. On existence of the quantum order the penalty order will survive. But the assessee has never challenged the validity of assessment order. On the other hand, the assessment order itself valid till date.In the appeal order the no light was through related to validity of assessment order and imposition of penalty. If, the section 153A itself does not exist, so the difference of tax is in question related imposition of penalty U/s 271(1)(c) of the Act.We set aside the order of the ld. CIT(A). The matter is remitted back to the file of the ld. CIT(A) to further adjudication considering the observation made by the ITAT-Amritsar Bench, as indicated above. Needless to say, the assessee should get a reasonable opportunity of hearing in set aside proceeding.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 01.08.2023