2018 (2) TMI 1924 - AT - Income Tax

Levy of penalty u/s. 271(1)(c) - CIT(A) disposed the appeal ex-parte without giving a reasonable opportunity - HELD THAT - Considering the fact that the order appealed is against the penalty order we are of the opinion that the assessee should be given an opportunity of being heard before the appeal is disposed off and hence we remit the issue back to the CIT(A) for giving a reasonable opportunity to assessee and then pass a speaking order.

Summary

Issues:
Appeal against penalty levied under section 271(1)(c) for assessment year 2008-09.

Analysis:
The appeal was filed against the penalty imposed by the Assessing Officer under section 271(1)(c) for the assessment year 2008-09. The case involved a search and seizure operation at the premises of an individual and his family members, during which the daughter of the individual, the assessee, was also covered. The assessee initially admitted a total income in her return but did not disclose any undisclosed income under section 132(4). However, post search and seizure, it was revealed that the assessee had made on-money payments to sellers of plots, leading to an admission of additional income. Subsequently, after a notice under section 153A, the assessee filed a return admitting a higher total income, including agricultural income not declared earlier. The Assessing Officer then levied a penalty on the concealed income, which was challenged by the assessee before the CIT(A). The CIT(A) upheld the penalty, leading to the current appeal.

The grounds of appeal filed by the assessee included contentions regarding the reinstatement of the penalty under section 271(1)(c), the ex-parte disposal of the appeal by the CIT(A), misinterpretation of the ITAT order, and failure to quash the penalty proceedings. The assessee argued that since the ITAT had allowed the assessee's appeal and dismissed the Revenue's appeal in previous orders, the penalty levied by the AO was incorrect. However, the Revenue contended that the CIT(A) had directed the AO to levy penalty under a different section, and since the ITAT held that penalty under that section cannot be imposed, the penalty under section 271(1)(c) stands confirmed.

After hearing the contentions, the Tribunal decided that since the appeal was against the penalty order, the assessee should be given a fair opportunity to be heard before the appeal is disposed of. Therefore, the Tribunal remitted the issue back to the CIT(A) for a proper hearing and a speaking order. Consequently, the assessee's appeal was treated as allowed for statistical purposes.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision to provide the assessee with a fair opportunity to be heard before finalizing the appeal against the penalty imposed under section 271(1)(c) for the assessment year 2008-09.