2019 (5) TMI 776 - AT - Income Tax

Admission of additional grounds -as alleged Penalty u/s 271(l)(c) levied without jurisdiction, illegal and bad in law - HELD THAT - We are of the considered view that in view of the decision of NTPC Limited 1996 (12) TMI 7 - SUPREME COURT the additional grounds raised by the assessee are purely legal ground and did not require fresh facts which is to be investigated and goes to the root of the matter. In the interest of justice, we admit the aforesaid additional grounds. We find that since these additional ground were not raised before the Ld. CIT(A), hence, the same requires adjudication by the Ld. CIT(A), therefore, in the interest of justice, we remit back the aforesaid additional grounds to the file of the Ld. CIT(A) with the directions to decide the same afresh under the law, after giving adequate opportunity of being heard to the assessee.

Summary

Issues:
1. Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 based on presumptions and suspicions.
2. Upholding the penalty under section 271(1)(c) due to lack of convincing explanation and failure to prove no fraud or neglect in filing the return.
3. Admission of additional legal grounds in appeal regarding the jurisdiction and legality of the penalty.

Analysis:
1. The appeal challenged the Order of the Ld. Commissioner of Income Tax (Appeals) upholding the penalty of ?47,43,320 under section 271(1)(c) of the Income Tax Act, 1961. The Assessee contended that the penalty was imposed solely on presumptions and suspicions, disregarding judicial pronouncements and evidence on record. The Tribunal considered this argument and admitted additional legal grounds raised by the Assessee for further review.

2. The Assessee also argued that the penalty was unjust as no satisfactory explanation was provided and failed to establish the absence of fraud or neglect in filing the return. The Tribunal acknowledged the legal nature of the additional grounds and directed the Ld. CIT(A) to reconsider these aspects after granting the Assessee a fair opportunity to present their case. This decision was influenced by the precedent set by the Hon'ble Supreme Court in the case of NTPC Limited 229 ITR 383.

3. The Assessee's request to admit and decide on the additional legal grounds was initially opposed by the Ld. DR. However, the Tribunal, after evaluating the arguments and relevant legal principles, allowed the appeal for statistical purposes. The Tribunal emphasized the importance of addressing the legal aspects raised by the Assessee and ensuring a fair adjudication process, leading to the remittance of the additional grounds back to the Ld. CIT(A) for a fresh determination under the law.

In conclusion, the Tribunal's judgment in this case highlighted the significance of legal grounds, the need for a thorough review based on established principles, and the importance of providing a fair opportunity for the Assessee to present their case. The decision to allow the appeal for statistical purposes and remit the additional grounds for reconsideration demonstrated a commitment to upholding justice and ensuring a comprehensive evaluation of the penalty imposition under the Income Tax Act, 1961.