2020 (3) TMI 208 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - addition u/s 69 as the said amount was found deposited in the assessee s bank and no satisfactory explanation was furnished by the assessee - HELD THAT - CIT(A) has not considered the above aspect of the matter and merely for the reason that assessment order has been confirmed in quantum proceedings by the Tribunal, he has confirmed the levy of penalty ex-parte qua the assessee. Given the peculiar facts and circumstances of the present case, we believe that the assessee deserve one more opportunity and we accordingly deem it appropriate to set-aside the matter to the file of the ld CIT(A) to decide the same afresh taking into consideration aforesaid discussion after providing reasonable opportunity to the assessee. Needless to say, the assessee should attend to the appellate proceedings before the ld CIT(A) and cooperate in timely completion of the appellate proceedings. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Challenge to the levy of penalty under Section 271(1)(c) of the IT Act for Assessment Year 2012-13.

Detailed Analysis:

Issue 1: Challenge to the levy of penalty under Section 271(1)(c) of the IT Act for Assessment Year 2012-13

The appeal was filed by the assessee against the order of the ld. CIT(A), Ajmer for the Assessment Year 2012-13, challenging the sustenance of the penalty under Section 271(1)(c) of the IT Act. The assessment was completed under Section 143(3) where an addition of ?56,30,000 was made under Section 69 of the Act due to lack of satisfactory explanation by the assessee. The Coordinate Bench confirmed this addition. Separately, penalty proceedings under Section 271(1)(c) were initiated by the Assessing Officer, alleging concealment and furnishing of inaccurate particulars of income. The AO was not satisfied with the assessee's submissions and imposed a penalty of ?16,42,560, being 100% of the tax sought to be evaded. The AO contended that the assessee concealed and furnished inaccurate particulars of income. However, the penalty order lacked a clear finding on why the case fell under both concealment and furnishing inaccurate particulars. The Tribunal referred to relevant case laws emphasizing the need for a specific finding in the penalty order. The Tribunal set aside the penalty and remanded the matter to the ld CIT(A) for fresh consideration, stressing the importance of providing the assessee with a fair opportunity in the appellate proceedings.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the necessity of a clear and specific finding in the penalty order regarding the nature of the default under Section 271(1)(c) of the IT Act. The Tribunal emphasized the importance of providing the assessee with a fair opportunity in the penalty proceedings and appellate process, as per the principles of natural justice and legal precedents.

This comprehensive analysis highlights the key legal aspects and procedural intricacies involved in the challenge to the levy of penalty under Section 271(1)(c) of the IT Act for the specified Assessment Year.