2017 (5) TMI 412 - AT - Income Tax

Penalty u/s 271(l)(c) - non-deposit of tax deducted at source with the Central Government and also non disclosure of particulars of non-deposit of tax deducted at source with Central Government in the computation of income filed - Held that - In the appellate proceedings before the ld. CIT(A), the assessee did not make any appearance and the averment of the assessee as contained in Ground No. 6 filed with the tribunal was that because of the illness of its authorized representative , the assessee could not make representation before the ld. CIT(A) and it is prayed that one more opportunity be provided to the assessee to present its case on merits. Keeping in view of the factual matrix of the case and in the interest of justice, we are of the considered view that the matter needs to be set aside and restored back to the file of the ld. CIT(A) for de-novo adjudication of the issue on merits by learned CIT(A) . The ld. CIT(A) is directed to give one more opportunity to the assessee to represent the case before him

Summary

Issues:
Penalty under section 271(1)(c) of the Income Tax Act for non-payment of TDS and inaccurate particulars of income.

Analysis:
The appeal was filed against the appellate order confirming the penalty under section 271(1)(c) of the Income Tax Act for the assessment year 2011-12. The grounds of appeal included contentions that the penalty was confirmed without appreciating the accurate particulars of income, genuine expenses, financial difficulties faced by the assessee, and failure to consider the alternate plea regarding tax evasion. The appellant also requested another opportunity for a hearing due to the ill health of the authorized representative.

The assessee, a manufacturer of various products, had deductions made on account of tax deducted at source but not paid to the Central Government. The Assessing Officer (AO) initiated penalty proceedings under section 271(1)(c) for filing inaccurate particulars of income. The AO observed that although the tax was deducted at source, it was not deposited with the Central Government, leading to the penalty being levied. The penalty amount was 100% of the tax concealed, totaling to ?62,79,110.

The Commissioner of Income Tax (Appeals) confirmed the penalty in an ex-parte proceeding, stating that inaccurate particulars of income were furnished intentionally. The appellant then appealed to the Tribunal, where no representation was made on behalf of the assessee. The Tribunal considered the material on record and observed the non-deposit of TDS with the Central Government. Due to the absence of the assessee during the appellate proceedings, the Tribunal decided to set aside the order and restore the case to the Commissioner of Income Tax (Appeals) for a fresh adjudication on merits, providing the assessee with another opportunity to present its case.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the Commissioner of Income Tax (Appeals) to re-examine the case on merits after giving the assessee a chance to present its defense and evidence. The decision was made in the interest of justice and ensuring the principles of natural justice were followed.