2019 (6) TMI 789 - AT - Income Tax

Penalty u/s 271(1)(c) - quantum additions not adequately substantiated - HELD THAT - From the above observations of CIT(A) it is clear that he has not decided the issue relating to the levy of penalty u/s 271(1)(c) rather he has considered the submissions relating to the quantum addition. He had also not discussed the alternate explanation given by the assessee which was directed to be considered vide earlier order 2017 (11) TMI 1831 - ITAT CHANDIGARH . We deem it appropriate to set aside the impugned order to the file of the CIT(A) to be decided afresh in accordance with law and as per the directions given by the ITAT in above mentioned order. - Appeal of the Assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Confirmation of penalty under section 271(1)(c) by CIT(A) without considering replies properly.
2. Lack of jurisdiction in confirming penalty under section 271(1)(c) without specifying whether for concealing income or furnishing inaccurate particulars.
3. Absence of notice under section 271(1)(c) specifying the reason for penalty imposition.
4. Passing penalty order beyond the limitation period.
5. Levying penalty without specifying the grounds of concealment or inaccuracies.
6. Allegation of not affording adequate opportunity for being heard.
7. Levying penalty at 300% without citing special circumstances.

Analysis:
1. The Assessee appealed against the CIT(A)'s order confirming the penalty under section 271(1)(c) without considering the replies properly. The Assessee contended that the penalty was confirmed without due consideration of their explanations, leading to an erroneous decision.

2. The Assessee also argued that the penalty order lacked jurisdiction as it did not specify whether it was for concealing income or furnishing inaccurate particulars. The absence of clarity in the penalty order regarding the grounds for imposition was highlighted as a legal flaw.

3. Another issue raised was the absence of a notice under section 271(1)(c) specifying the reason for the penalty imposition. The Assessee pointed out that the lack of a clear notice detailing the grounds for the penalty rendered the penalty order liable to be quashed.

4. The Assessee contended that the penalty order was passed beyond the limitation period as the quantum order was confirmed earlier, raising concerns about the legality of the penalty imposition timeline.

5. Furthermore, the Assessee challenged the penalty imposition citing that it was not based on grounds of concealing income or furnishing inaccurate particulars. The absence of specific grounds for the penalty imposition was argued to be a legal flaw warranting the quashing of the penalty order.

6. Allegations were made regarding the CIT(A) confirming the penalty without affording adequate opportunity for being heard. The Assessee claimed that the order lacked proper consideration of their submissions, leading to a violation of procedural fairness.

7. The Assessee also contested the penalty levied at 300% without any special circumstances being brought on record. The lack of justification for imposing the maximum penalty percentage was highlighted as a legal flaw in the penalty order.

In conclusion, the ITAT set aside the CIT(A)'s order and remanded the case for a fresh decision in accordance with the directions given by the ITAT in a previous order. The appeal of the Assessee was allowed for statistical purposes, emphasizing the need for a proper consideration of all legal aspects in penalty imposition cases.