2022 (4) TMI 903 - AT - Income Tax

Penalty u/s 271(1)(c) - additions made under section 68 and 69 - Assessee not appeared during the course of appellate proceedings - HELD THAT - Assessee has not appeared during the course of appellate proceedings or produced any details towards quantum additions under sections 68 and 69 of the Act as well as levy of penalty under section 271(1)(c) of the Act. The reasons given by the assessee is that the customs proceedings are pending before the Customs Excise Service Tax Appellate Tribunal (South Zonal Bench), Chennai towards levy of customs duty and therefore, the assessee could not attend during the appellate proceedings. Though the ld. CIT(A) has given as many opportunities, the assessee has not appeared or produced any material to substantiate its claim. However, the ld. CIT(A) has not discussed the merits of the case. Hence to meet the ends of natural justice, we are of the opinion that the assessee shall be afforded an opportunity of being heard to substantiate its case before the ld. CIT(A). Accordingly, we set aside the orders - Appeals filed by the assessee are allowed for statistical purposes.

Summary

Issues:
Appeals against orders of Commissioner of Income Tax (Appeals) for quantum and penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2012-13.

Analysis:

1. Quantum Additions under Section 68 and Section 69 of the Act:
The appeals challenged the addition of ?69,72,900 under section 68 and ?32,03,000 under section 69 of the Income Tax Act. The Assessing Officer noted excess credits in the bank statements compared to the total turnover, treating them as unexplained credits and unexplained investment, respectively. The ld. CIT(A) dismissed the appeal as the assessee failed to provide details or appear. The Tribunal observed that the assessee cited pending customs proceedings as the reason for non-appearance. In the interest of natural justice, the Tribunal set aside the ld. CIT(A)'s orders, remitting the matter back for fresh adjudication, granting the assessee an opportunity to substantiate its case.

2. Penalty under Section 271(1)(c) of the Act:
The Assessing Officer levied a penalty of ?31,44,353 under section 271(1)(c) of the Act, which was confirmed by the ld. CIT(A). The assessee, citing pending customs proceedings, requested an opportunity to present its case. The Tribunal, noting the absence of the assessee during appellate proceedings, directed a fresh adjudication by the ld. CIT(A) to afford the assessee a chance to substantiate its claim. Consequently, both appeals were allowed for statistical purposes.

In conclusion, the Tribunal's judgment focused on ensuring the principles of natural justice by granting the assessee an opportunity to be heard and substantiate its case before the ld. CIT(A) regarding quantum additions under sections 68 and 69 of the Act and the penalty levied under section 271(1)(c) of the Income Tax Act for the assessment year 2012-13.