2020 (9) TMI 537 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - absence of satisfaction so recorded - HELD THAT - Where the assessee has carried the matter in appeal before the Tribunal in the quantum proceedings and the quantum additions as so claimed by the assessee have been reduced and which forms the basis for levy of penalty, the consequent quantum of penalty will also undergo a change, however, we find that there is no finding recorded by the CIT(A) in this regard. Assessee has raised contentions regarding lack of satisfaction for initiating the penalty proceedings while completing the assessment proceedings, to our mind, there are relevant considerations which needs to be examined and disposed off before the levy of penalty is confirmed. We accordingly set-aside the matter to the file of the ld CIT(A) to examine the various contentions so raised by the assessee and decide the matter afresh after providing reasonable opportunity to the assessee. The assessee is also directed to appear before the ld. CIT(A) and file the necessary information and documentation in support of its contentions, as so advised and ensure in timely completion of the appellate proceedings. This will not prejudice the right of the assessee in availing of the aforesaid settlement scheme and where the assessee so decides finally to opt for the scheme and has taken necessary steps as so specified therein, it can bring the same to the notice of the ld CIT(A) who shall then decide and take appropriate action as per law.

Summary

Issues:
Appeal against levy of penalty under section 271(1)(c) of the Income Tax Act.

Analysis:
1. The appeal was filed by the assessee against the order of the ld. CIT(A)- 22, Alwar regarding the confirmation of the penalty amounting to ?12,94,565/- imposed by the Assessing Officer under section 271(1)(c) of the Act. The hearing was conducted via video conferencing due to the Covid-19 pandemic situation.

2. The assessee did not appear for the hearing, and an adjournment request was made stating the intention to opt for the Vivad Se Vishwas Scheme. Since no specific timeline was provided, and the appeal had been pending for a significant period, the Tribunal decided to proceed with the hearing based on the available record without further adjournment.

3. The penalty was imposed based on the findings during a survey where undisclosed income was identified from unrecorded transactions in a diary named "Geeta Dayanandini." The Assessing Officer concluded that the assessee concealed income by not disclosing these transactions, justifying the penalty under section 271(1)(c) of the Act.

4. The assessee contended that the penalty was levied without considering the Tribunal's order reducing the assessed income, lack of satisfaction recorded by the Assessing Officer for initiating penalty proceedings, and absence of corroborative evidence for the alleged concealed income. The CIT(A) affirmed the penalty, stating that the unrecorded transactions indicated inaccurate particulars of income, justifying the penalty.

5. The Tribunal noted that the CIT(A) did not adequately address the assessee's contentions, including the impact of reduced quantum additions on the penalty and the lack of satisfaction for initiating penalty proceedings. The matter was remanded back to the CIT(A) for a fresh examination of the contentions raised by the assessee, providing an opportunity for submission of necessary information and documentation.

6. The assessee was directed to appear before the CIT(A) to present supporting evidence and ensure timely completion of the appellate proceedings. The decision did not prejudice the assessee's right to opt for the settlement scheme, allowing for appropriate action based on the final decision regarding the scheme.

In conclusion, the appeal was disposed of, and the matter was remanded to the CIT(A) for reevaluation in light of the directions provided, ensuring a fair consideration of the assessee's contentions and supporting evidence.