Case Law Details
Dr. Sankaran Sundar Vs ITO (ITAT Bangalore)
The penalty imposed u/s 271D of the I.T.Act is independent of assessment proceedings completed u/s 143(3) of the I.T.Act. Even without completion of assessment u/s 143(3) of the I.T.Act, penalty u/s 271D of the I.T.Act can be imposed for violation of provisions of section 269SS of the I.T.Act. In other words, the penalty proceedings u/s 271D of the I.T.Act is unconnected with the assessment order passed u/s 143(3) of the I.T.Act. The assessee in the instant case has only settled the matter under VSVS 2020 insofar as the issues that are raised in the appeal filed as against the assessment u/s 143(3) of the I.T.Act. the assessee has not settled the penalty imposed u/s 271D of the I.T.Act under VSVS 2020. Therefore, the CIT(A) has erred in rejecting the appeal of the assessee stating that the issue raised in the appeal has become infructuous and the same has been dismissed as infructuous. The issue is restored to the files of the CIT(A). The CIT(A) is directed to adjudicate the grounds raised before him as regards the merits of imposition of penalty u/s 271D of the I.T.Act. It is ordered accordingly.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 15.06.2022. The relevant assessment year is 2017-2018.
2. The brief facts of the case are as follows:
The assessee is a medical practitioner by profession. For the assessment year 2017-2018, the return of income was filed on 15.09.2017 declaring total income at Rs.1,00,39,030. The assessment was completed u/s 143(3) of the I.T.Act vide order dated 30.12.2019 determining total income of Rs.1,01,68,982. In the said assessment order, the Assessing Officer had made an observation that the assessee had received cash of Rs.50,00,000 on entering into a sale agreement of a property and portion of the same was deposited to the bank account of the assessee during the demonetisation period. Against the order passed u/s 143(3) of the I.T.Act, the assessee preferred an appeal before the first appellate authority. During the course of appellate proceedings, the matter was settled under Vivad Se Vishwas Scheme 2020 (VSVS 2020).
3. Subsequently, penalty proceedings u/s 271D of the I.T.Act were initiated by the A.O. vide show cause dated 22.04.2021. In response to the same, the assessee filed detailed submissions. It was stated that the assessee had settled under the VSVS Scheme 2020, the addition / disallowance made in the assessment order dated 30.12.2020 and the same has been accepted by the designated authority. It was submitted that the assessee is not liable to the imposed with penalty u/s 271D of the I.T.Act. However, the A.O. rejected the contentions of the assessee and imposed penalty of Rs.50 lakh u/s 271D of the I.T.Act for violating the provisions of section 269SS of the I.T.Act.
4. Aggrieved by the order imposing penalty u/s 271D of the I. T.Act, the assessee preferred an appeal before the first appellate authority. The CIT(A) dismissed the appeal of the assessee as withdrawn and infructuous, since, according to the CIT(A), the assessee had settled the matter under VSVS 2020.
5. Aggrieved by the order of the CIT(A), the assessee has filed the present appeal before the Tribunal raising the following grounds:-
“1. The order of the learned Commissioner of Income Tax [Appeals], NFAC, passed under Section 250 of the Act dated 15/06/2022 in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant’s case.
2. The learned Commissioner of Income Tax [Appeals] erred in dismissing the appeal of the Appellant as withdrawn and infructuous without cancelling the impugned penalty order passed by the National Faceless Assessment Centre under Section 271D of the Act dated 14.02.2022 or without giving a direction to the learned assessing officer to issue refund of penalty after considering the fact of the appellant availing the benefit of Vivad Se Vishwas Scheme-2020 and Form No.5 was granted by the designated authority in the appellate order on the facts and circumstances of the case.
3. Without Prejudice, the learned Commissioner of Income Tax [Appeals] erred in passing the appellate order without following principles of natural justice and not providing sufficient opportunity to the Appellant in making submissions in support of his case and no personal hearing was granted to the appellant and consequently, the appellate order passed under section 250 of the Act is liable to be set aside on the facts and circumstances of the case.
4. Without Further Prejudice, the learned Commissioner of Income Tax [Appeals] erred in not adjudicating all the grounds of appeal raised by the Appellant as reproduced in para No. 16 of the statement of facts filed before this Hon’ble Tribunal on the facts and circumstances of the case.
5. Without prejudice the learned Commissioner of Income Tax [Appeals] failed to adjudicate the condonation of delay application filed by the appellant on the facts and circumstances of the case.
6. Without Prejudice to the other grounds above, the Appellant denies himself liable to the penalty levied by the learned assessing officer under Section 271D of the Act amounting to Rs.50,00,000/- under the facts and circumstances of the case.
7. The Appellant craves leave of this Hon’ble Income Tax Appellate Tribunal to add, alter, delete or substitute any or all of the above grounds as may be necessary at the time of hearing of the appeal.
8. For the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice.”
6. The learned AR relied on the grounds raised.
7. The learned Departmental Representative supported the orders of the Income Tax Authorities.
8. We have heard rival submissions and perused the material on record. The penalty imposed u/s 271D of the I.T.Act is independent of assessment proceedings completed u/s 143(3) of the I.T.Act. Even without completion of assessment u/s 143(3) of the I.T.Act, penalty u/s 271D of the I.T.Act can be imposed for violation of provisions of section 269SS of the I.T.Act. In other words, the penalty proceedings u/s 271D of the I.T.Act is unconnected with the assessment order passed u/s 143(3) of the I.T.Act. The assessee in the instant case has only settled the matter under VSVS 2020 insofar as the issues that are raised in the appeal filed as against the assessment u/s 143(3) of the I.T.Act. the assessee has not settled the penalty imposed u/s 271D of the I.T.Act under VSVS 2020. Therefore, the CIT(A) has erred in rejecting the appeal of the assessee stating that the issue raised in the appeal has become infructuous and the same has been dismissed as infructuous. The issue is restored to the files of the CIT(A). The CIT(A) is directed to adjudicate the grounds raised before him as regards the merits of imposition of penalty u/s 271D of the I.T.Act. It is ordered accordingly.
9. In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced on this 21st day of September, 2022.
