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TMI Blog2022 (9) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... rs from violation of principle of natural justice and non-application of mind by the AO and the same cannot be allowed to stand. The AO has not exercised his power to levy penalty in a fair, reasonable and judicial manner. Therefore, penalty levied by the AO without considering the assessee s explanation is bad in law and hereby quashed. Thus, the ground raised by the assessee is allowed. - ITA No.469/RJT/2015 - - - Dated:- 31-8-2022 - Smt. Annapurna Gupta, Accountant Member And T.R. Senthil Kumar, Judicial Member For the Assessee : Written submissions For the Revenue : Shri B.D. Gupta, Sr.DR ORDER PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the Assessee against order dated 18.8.2015 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s appeal was dismissed by confirming addition of Rs.2,65,668/- under section 69C of the Act vide order dated 21.9.2012 in ITA No.386/RJT/2012. Pursuant to this order, the AO issued another show cause notice dated 14.3.2013 giving fresh opportunity to the assessee for levy penalty under section 271(1)(c) of the Act. Vide para-5 of the penalty order, the AO imposed the penalty by holding as follows: 5. On receipt of the order of the Hon. ITAT, a fresh show cause notice u/s.271(1)(c) of the Act was given to the assessee vide show cause notice dated 14/03/2013 giving him fresh opportunity of being heard in the matter. But till date no body has attended nor given any written submission in reply of the above show case notice. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der stated that nobody has attended in response to the penalty notice nor given any written submissions and thereby confirmed levy of penalty. The ld.CIT(A) also held that written reply by the assessee was nothing but same fact which have been considered and adjudicated by the appellate authorities viz. Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal, Rajkot Bench while deciding the quantum appeal. Thus, the CIT(A) confirmed levy of penalty and dismissed the assessee s appeal. Aggrieved against the same, the assessee is before the Tribunal. 5. During the course of hearing none appeared on behalf of the assessee. However, written submissions dated NIL was filed before us stating that the issue is fully covered matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, the Income-tax Officer may direct or may not direct levy of penalty considering the fact that he is required to be satisfied whether any person has committed the stipulated default without reasonable cause. Such a satisfaction can be recorded only if proper and adequate opportunity is accorded to the assessee. Therefore, before the authority can exercise discretion vested in it, it is imperative for the authority to grant reasonable opportunity and this would take within its fold the right of being heard and the explanation tendered as to the existence of reasonable cause being taken into consideration before the order to levy penalty is made. The legal position in this regard is well settled and bears no repetition. The authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exist. The exercise of discretion has to be in a judicial manner, namely, fairly and reasonably. 12. Applying the aforesaid principles to the facts of the case, it is apparent that the assessee had tendered an explanation before the Income-tax Officer in response to the show-cause notice issued by him, such explanation has been ignored by the Income-tax Officer in entirety by stating that no explanation has been tendered and in the circumstances, the order levying penalty suffers from violation of the principles of natural justice and vice of non-application of mind and cannot be allowed to stand. The Tribunal was, therefore, justified in holding that the order levying the penalty was bad in law and could not be sustained. 6. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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