2020 (9) TMI 61 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - non specification of charge - assessee was non-cooperative before the revenue authorities especially before the Ld. First Appellate Authority - HELD THAT - No doubt that the assessee remained non-cooperative before the revenue authorities especially before the Ld. First Appellate Authority. But in our view the grounds raised by the Assessee in the present Appeal are very much important to decide the issues in dispute which have not been decided by the Ld. CIT(A). As gone through the various grounds raised by the Assessee before the Ld. CIT(A) especially the initiation of penalty is fatally defective so much so, no specific charge has been mentioned which makes the whole proceedings unsustainable in law, which has not been decided by the Ld. CIT(A). We are of the view that the issues in dispute require thorough consideration at the level of the Ld. CIT(A), which have not been decided by the Ld. CIT(A). We are setting aside the issues in dispute to the Ld. CIT(A) to decided the same, afresh, as per law, after giving full opportunity to the assessee as required under the law. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Defects in initiation of penalty proceedings.
2. Defective penalty notice and subsequent proceedings.
3. Applicability of section 271(1)(c) and sustainability of penalty.
4. Adequacy of hearing opportunities provided by lower authorities.

Issue 1: Defects in initiation of penalty proceedings:
The appeal challenged the initiation of penalty, claiming it was fatally defective as no specific charge was mentioned, rendering the proceedings unsustainable in law. The Assessee's representative argued that various case laws supported the deletion of a similar penalty. However, the First Appellate Authority upheld the penalty ex parte due to the Assessee's non-cooperation and failure to file written submissions.

Issue 2: Defective penalty notice and subsequent proceedings:
The Assessee contended that the penalty notice was defective for not specifying the charge, leading to unsustainable subsequent proceedings. Despite the Assessee's claim of not receiving notices, the Senior DR argued that the penalty was rightly levied and upheld due to the Assessee's non-cooperation before the revenue authority.

Issue 3: Applicability of section 271(1)(c) and sustainability of penalty:
The Assessee argued that section 271(1)(c) was not applicable, and the penalty was unsustainable even on merits. The Senior DR opposed this, stating that the penalty was rightly imposed and upheld by the First Appellate Authority due to the Assessee's lack of cooperation.

Issue 4: Adequacy of hearing opportunities provided by lower authorities:
The Assessee claimed that no proper and reasonable opportunity of hearing was allowed by the lower authorities. However, the Senior DR contended that the Assessee remained non-cooperative, justifying the penalty imposition. The Tribunal acknowledged the non-cooperation but emphasized the importance of addressing the raised grounds for a fair decision.

In its decision, the Tribunal set aside the issues for the First Appellate Authority to reconsider, emphasizing the need for a thorough examination of the disputed matters. The Assessee was directed to appear before the First Appellate Authority for substantiating the case. Ultimately, the Assessee's appeal was allowed for statistical purposes, highlighting the importance of due process and fair consideration in tax matters.

This detailed analysis covers the various issues raised in the legal judgment before the Appellate Tribunal ITAT DELHI, providing a comprehensive overview of the arguments presented and the Tribunal's decision.