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2016 (3) TMI 1223 - AT - Income TaxLevy of penalty under section 271(1)(c) - N.P. determination - Held that - Whole complexion of the penalty matter has changed because of the subsequent event i.e. the order passed by the Tribunal. The Assessing Officer considered the penalty matter on the basis of part addition sustained by ld. CIT(Appeals) by applying profit rate of 55%, however, Assessing Officer made specific additions on account of disallowance of various expenses by giving specific findings of fact against the assessee. Therefore, in our view the penalty matter shall have to be re-considered in the light of findings of Assessing Officer given in the assessment order because the order of the Assessing Officer have been restored by the Tribunal and as such, the penalty matter need not to be decided on the basis of findings given by the ld. CIT(Appeals) computing the income of the assessee by applying profit rate of 55%. Also here that since the finding of fact recorded by the Assessing Officer have not been considered in the penalty matter, therefore, the matter would also require re-consideration because the additions would be higher now on passing the final order passed by the Assessing Officer. Appeal of the assessee is allowed for statistical purposes.
Issues involved:
Challenge against the levy of penalty under section 271(1)(c) of the Income Tax Act for assessment year 2007-08. Analysis: Issue 1: Assessment and Penalty Proceedings The appeal was directed against the order of the ld. CIT(Appeals) challenging the penalty under section 271(1)(c) of the Income Tax Act. The case involved the individual assessee who filed a return of income, which was later selected for scrutiny. The Assessing Officer made various additions on account of disallowance of expenses, leading to the initiation of penalty proceedings separately. Issue 2: Quantum of Addition and Penalty Imposition The ld. CIT(Appeals) directed to calculate the net profit of the assessee by applying a profit rate of 55% on total commission receipts, resulting in a specific amount of addition. The Assessing Officer levied the penalty based on this addition after giving an opportunity to the assessee. The ld. CIT(Appeals) dismissed the appeal as the necessary evidence to support the claim was not produced by the assessee. Issue 3: Tribunal's Decision and Burden of Proof The ITAT Chandigarh Bench reversed the order of the ld. CIT(Appeals) and restored the order of the Assessing Officer. The Tribunal emphasized that the burden of proof lies on the assessee to support claims with cogent and corroborative evidence. The Tribunal highlighted the importance of evidence in tax proceedings and the necessity for the assessee to discharge the initial onus. Issue 4: Reconsideration of Penalty Matter The Tribunal directed a reconsideration of the penalty matter at the level of the Assessing Officer in light of the findings given in the assessment order. The Tribunal noted that the penalty matter needed to be re-evaluated based on the Assessing Officer's findings, as the order had been restored by the Tribunal. The matter was set aside for re-consideration, ensuring the assessee is given a fair opportunity to present their case. Conclusion: The appeal of the assessee was allowed for statistical purposes, and the penalty matter was remanded to the Assessing Officer for re-decision in accordance with law and the findings of the Tribunal. The detailed analysis of the issues involved in the legal judgment provides a comprehensive understanding of the case and the subsequent directions given by the Tribunal for re-consideration of the penalty matter.
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