Case Law Details
Devendra Kumar Dubey Vs ITO (ITAT Agra)
The Income Tax Appellate Tribunal (ITAT) Agra has remanded the case of Devendra Kumar Dubey vs. ITO concerning a ₹34,803 penalty imposed under Section 271(1)(c) for alleged concealment of income. The penalty originated from an addition of ₹2,61,740, deemed unexplained investment, made during assessment under Section 144 due to the assessee’s non-compliance with notices. The CIT(A) upheld the penalty without considering additional evidence. However, ITAT had earlier set aside the quantum addition and directed a fresh review by CIT(A). The assessee contended that the penalty decision should align with the reassessment of quantum additions.
Observing procedural lapses, ITAT ruled that the penalty appeal should also be reconsidered in light of the fresh adjudication of quantum additions. The Tribunal restored the case to CIT(A), instructing a fair hearing with consideration of new evidence. The appeal was allowed for statistical purposes, emphasizing adherence to principles of natural justice.
FULL TEXT OF THE ORDER OF ITAT AGRA
This appeal in ITA No.50 /Agr/2023 for the assessment year 2015-16 has arisen from the appellate order dated 10.02.2023(DIN& Order No. ITBA/NFAC/S/250/2022-23/1049623622(1)) passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi wherein ld. CIT(Appeals) has confirmed the penalty of Rs.34,803/- as levied by the Assessing Officer, which appeal before ld. CIT(A) has in turn arisen from the penalty order dated 15.11.2021 passed by Assessing Officer u/s. 271(1)(c) of the Income-tax Act, 1961(DIN ITBA/PNL/F/271(1)(c)/2021-22/1036930973(1)), imposing penalty of Rs.34,803/- u/s 271(1)(c) of the 1961 Act against the assessee for concealment of his particulars of income.
2.Grounds of Appeal raised by the assessee in Memo of Appeal filed with Income Tax Appellate Tribunal, Agra Bench, Agra ,reads as under :
“1. On the facts and in the circumstances of the case, the levy of penalty of Rs.34,803/- vide order under sec. 271(1)(c) of the Income-tax Act, 1961 dated 15/11/2021 is unjustified, unwarranted, illegal, ab initio void and against the principles of natural justice.
2. On the facts and in the circumstances of the case, the NFAC erred in law and on facts in levying the penalty of Rs. 34,803/- on the basis of addition of Rs. 2,61,740/- in assessment as unexplained investment upheld by the CIT(A)’s order dated 14/12/2018 without considering the additional evidence produced before him, particularly when the Hon’ble ITAT set aside the said order and restored the matter back to the file of the Id. CIT(A) vide order in ITA No.22/Agra/2019 dated 20/09/2021.
3. On the facts and in the circumstances of the case, the Id. CIT(A) erred in confirming the levy of penalty of Rs.34,803/- levied under sec. 271(1)(c) of the Act merely on the basis of addition in assessment, which had been confirmed vide order dated 14/12/2018 without considering the evidence placed before him, particularly when the said order of the Id. CIT(A) stood set aside and restored the matter back to the file of the Id. CIT(A) vide order in ITA No.22/Agra/2019 dated 20/09/2021.
4. On the facts and in the circumstances of the case, the levy of penalty is contrary to facts and law and the same deserves to be cancelled.
5. The appellant craves leave to add, alter or modify any ground of appeal at the time of hearing.”
3. Brief facts of the case are that the assessee had filed his return of income with Revenue for the impugned assessment year:2015-16 on 23.03.2017 electronically declaring total income of Rs. 2,94,410/-. The case of the assessee was selected by Revenue for framing limited scrutiny assessment for examining the issue ‘whether the deposition of cash had been made from disclosed sources’. The statutory notices u/s 143(2) and 142(1) were issued by the AO to the assessee during the course of assessment proceedings, but there was no compliance by the assessee. SCN u/s 144 was also issued by the AO to the assessee during the course of assessment proceedings, but again there was no compliance by the assessee. The assessment order in the case of assessee was passed u/s. 144 of the Act on 01.12.2017 (page 109 – 113 of the paper book), wherein the Assessing Officer has made addition of Rs.2,61,740/- as income in the hands of the assessee, firstly on account of cash deposits of Rs.70,000/- on 11.10.2014, 16.10.2014, 05.02.2015 and 07.02.2015, and secondly as well as addition was made by the AO on account of cash balance as cash in hand of Rs.1,91,740/- shown by the assessee, leading to total addition to the income of the assessee to the tune of Rs.2,61,740/- in the hands of the assessee, as the aforesaid amounts being unverifiable amount’s being income of the assessee from undisclosed sources. The assessee filed first appeal with ld. CIT(A) against quantum additions, and the same was dismissed by ld. CIT(A) vide appellate order dated 14.12.2018. The AO also invoked penalty proceedings u/s 271(1)(c) for concealment of income, and accordingly show cause notice dated 17.05.2021 was issued by the AO to the assessee u/s 274 read with Section 271(1)(c). The assessee participated in the penalty proceedings, but the contentions of the assessee were rejected by the AO which led to the levying of penalty of Rs. 34,803/- against the assessee for concealing of the particulars of income. The first appeal filed by assesse with ld. CIT(A) was dismissed by ld. CIT(A) vide orders dated 10.02.2023, and penalty of Rs. 34,803/- as levied by the AO u/s 271(1)(c) was confirmed by ld. CIT(A). The assessee has now filed second appeal with ITAT against the penalty confirmed by ld. CIT(A). The matter of quantum addition travelled upto Income Tax Appellate Tribunal , Agra Bench, Agra, and the ITAT was pleased to set aside the matter back to the tile of ld. CIT(Appeals) to decide the appeal afresh with the direction to pass fresh orders after admitting the additional evidences and providing sufficient opportunity to the assessee, vide appellate orders in ITA No. 22/Agr/2019 dated 20.09.2021 passed by ITAT, Agra Bench, Agra.
4. The assessee has filed second appeal with ITAT against appellate order dated 10.02.2023 passed by ld. CIT(A) confirming the penalty of Rs. 34,803/- levied by the AO. At the outset, ld. Counsel for the assessee submitted that the quantum additions have been set aside by ITAT to the file of ld. CIT(Appeals) for fresh adjudication after admission of additional evidences filed by the assessee, and it was submitted that so far as the penalty appeal is concerned, the ld. CIT(Appeals) has dismissed the appeal of the assessee without considering the appellate order of Tribunal in ITA No. 22/Agr/2019 dated 20.09.2021(page 114-117/PB), and it is prayed by ld. Counsel for the assessee that the matter can go back to the file of ld. CIT(Appeals) for fresh adjudication, as now quantum appeal has already been set aside and restored back to the file of ld. CIT(Appeals) by ITAT vide orders dated 20.09.2021, which is now pending with ld. CIT(A) for denovo adjudication.
4.2 Ld. Sr. DR, on the other hand, fairly submitted that the matter can go back to the file of ld. CIT(Appeals) for denovo adjudication, as the appeal against quantum additions was set aside by ITAT to ld. CIT(A) for fresh adjudication. The present appeal has arisen from the penalty levied by the AO u/s 271(1)(c) which was later confirmed by ld. CIT(A).
5. The brief facts are culled out in preceding para’s of this order and are not repeated again. After considering the contentions of both the parties and perusing the record, I observe that against the quantum additions, the Tribunal has set aside and restored the matter back to the file of ld. CIT(Appeals) for denovo adjudication of the appeal of the assessee, vide appellate order in ITA No. 22/Agr/2019 dated 20.09.2021 ,by holding as under :
“7. In view of the principles of natural justice, we consider it deem fit to restore back the matter to the Ld. CIT(A) to decide afresh with the direction to pass a fresh order after admitting the additional evidence and granting sufficient opportunity of being heard to the assessee. No doubt, the assessee shall cooperate in the fresh proceedings.”
5.2 I have also observed that the ld. CIT(Appeals) has dismissed the appeal of the assessee without considering the aforesaid Tribunal decision dated 20.09.2021 , and it will be fair and appropriate that this appeal which has arisen against penalty levied by the AO u/s 271(1)(c) of Rs. 34,803/- and later confirmed by ld. CIT(A), can also be restored back to the file of ld. CIT(Appeals) to decide afresh after giving sufficient opportunity to both the parties. Ld. CIT(Appeals) while adjudicating the appeal arising from penalty order shall also consider the denovo appellate order passed by ld. CIT(Appeals) against quantum addition in compliance with the directions of the ITAT vide orders dated 20.09.2021 in ITA no. 22/Agr/2019. Thus, the matter is restored back to the file of ld. CIT(Appeals) for denovo adjudication of the appeal of the assessee, after giving proper opportunity to both the parties. I clarified that I have not commented on the merits of the issues arising in the appeal. The appeal of the assessee is allowed for statistical purposes. I order accordingly.
6. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11/12/2024.
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