BANSIDHAR ENTERPRISES,HAZARIBAGH V. ITO WARD 1(1), HAZARIBAGH

ITA 97/RAN/2023

AI Insights

The case involves Bansidhar Enterprises, a partnership concern running a petrol pump, which appealed against a penalty order under Section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year 2014-15. The penalty of Rs. 77,250 was imposed following the addition of Rs. 31,07,310 as unexplained cash deposits during the assessment. The CIT(A) upheld the penalty, noting non-compliance by the assessee in not providing sufficient evidence or submissions to substantiate their appeal. The ITAT found procedural lapses in the handling of the case by the CIT(A) and granted a remand for a fresh evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471123 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Principle of natural justice
• Section: 250; 271(1)(c); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH,RANCHI Shri Partha Sarathi Chaudhury, Judicial Member Shri Prabhash Shankar, Accountant Member I.T.A. No. 97/RAN/2023 Assessment Year: 2014-15 Bansidhar Enterprises, Main Road, Charhi, Hazaribagh - 825336 [PAN: AAIFM1807B] ….......................…...……………....Appellant vs. ITO (1), Hazaribagh, Ravindra Path, Hazaribagh - 825301 .....…..........................…..…..... Respondent Appearances by: Assesseerepresented by : None Department represented by :Sri P.K. Koley, Sr. DR Date of concluding the hearing : 03.10.2024 Date of pronouncing the order :14.10.2024 ORDER Per Prabhash Shankar, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short ‘AY’) 2014-15is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the ‘Act’) by the Learned Commissioner of Income Tax (Appeals) [in short 'the Ld. CIT(A)],National Faceless Appeal Centre (NFAC), Delhi, dated 25.01.2023 arising out of Penalty Order dated 01.02.2022, passed under Section 271(1)(c) of the Act. 2. The Assessee has raised the following grounds of appeal: “1. That the penalty order made by CPC and confirmed by the learned CIT (Appeals) is bad in law as well as in facts and liable to be set aside. 2. That concealment of income and furnishing of inaccurate particulars of income are two limbs of Sec. 271(1)(c) The learned assessing officer failed to appreciate that show cause notice issued for furnishing inaccurate particulars of income cannot be concluded by imposing penalty for deliberate concealment of income. I.T.A. No.97/RAN/2023 Bansidhar Enterprises 2 3. That the penalty order by CPC without considering the petitioners reply in its proper perspective is illegal and arbitrary. 4. That the Hon'ble ITAT has duly mentioned the fact that the parties from whom advances were received has duly confirmed the transactions by responding to notices u/s 133(6) of the Income Tax Act proving the genuineness of the transaction. 5. That the addition sustained by the Hon'ble ITAT to the extent of Rs. 2,50,000 was made without pinpointing any specific discrepancy as cash credit u/s 68, hence no penalty is leviable on such estimated additions. 6. That no penalty can be imposed for additions made on ad-hoc or estimated basis. 7. For that the appellant assessee craves indulgence to add, modify/delete any grounds to appeal on or before the time of hearing 8. That other grounds shall be urged at the time of hearing. Relief claimed: 1. That the penalty of Rs. 77,250/- be deleted. 2. Any other relief which the appellant is entitled to.\" 3. At the time of hearing, none appeared on behalf of the assessee. The ld. Sr. DR supported and relied on the orders of the lower authorities. 4. At the time of hearing, it was noticed that there is a delay of 44 days in filing the appeal before the Tribunal. On this aspect petition had filed on behalf of the assessee praying for condonation of such delay. We after perusing application filed on behalf of the assessee, find that there is a reasonable cause for the delay in filing the appeal. Considering the same, condone such delay in filing the appeal on behalf of the assessee. 5. Brief facts of the case are that the assessee is a partnership concern running a business of Petrol Pump. The return of income for A.Y 14-15 was duly filed. The case was selected for scrutiny and certain additions to the tune of Rs. 31,07,310/- was made during the course of assessment as unexplained cash deposits. The case was finally disposed of by Hon'ble ITAT, Ranchi Bench restricting the additions to Rs. 2,50,000/- only keeping the larger interest of justice. The penalty proceedings which was initiated after completion of assessment was passed demanding Rs. 77,250/- u/s 271(1)(c) of the Act, being 100% of tax sought to be evaded. I.T.A. No.97/RAN/2023 Bansidhar Enterprises 3 6. The assessee filed appeal before the Learned CIT (A) against the order of penalty in which the penalty u/s 271(1)(c) Rs. 77,250/- was confirmed. As per para 6.1 of the appellate order on pages-7 and 8,the ld.CIT(A) has pointed out that two notices dated 22.12.2022 and 09..021.2023 were issued through ITBA portal. However, on the respective dates of compliance, neither the assessee requested for any adjournment nor filed any written submission in support of the grounds of appeal which clearly showed that the assessee did not have any evidence to substantiate the grounds taken. The statement of facts and the grounds filed alongwith the appeal papers were therefore, rejected by him. Accordingly, he dismissed he appeal. 7. We have carefully considered all the relevant aspects of the case,non- compliance of the assessee and the conclusions drawn by the lower authorities. The assessee has contented that that its submissions made were not considered in proper perspective and the addition made on estimate basis could not be considered justified for levying penalty. It is apparent from the records that in the present case, no substantive hearing could take place owning to non-compliance on part of the assessee. Moreover, the ld.CIT(A) has not adjudicated at length on the issues involved and appears to have more or less relied on the penalty order without making an independent analysis of the case himself.Although the assessee did not appear before us also, it is in the fitness of things to allow one last opportunity of hearing to the assessee to explain the matter before lower authorities in the interests of justice and fair play. We are adopting this approach consistently in all such cases as we find in quite a few cases that there is some degree of lack of proper communication wherever notices are sent through e-portal. Besides, we hold that as per the provisions of Section 250(6) of the 1961 Act, ld.CIT(A) is obligated to state points for determination in appeal before him, the decision thereon and the reasons for determination. He has no power to dismiss appeal of assessee on account of non-prosecution and without deciding on the merits of the case. 7.1 During the hearing, the Bench proposed for restoration of the matter to the ld.CIT(A) for a de novo consideration. The Revenue did not I.T.A. No.97/RAN/2023 Bansidhar Enterprises 4 vehemently oppose this plea. Thus, in the in the interest of justice, we deemed it appropriate to allow the appeal for statistical purposes, emphasizing the need for a thorough and compliant adjudication process. The ld. CIT(A) shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in the set aside remand proceedings for de novo adjudication of the appeal of the assessee filed before him. Needles to state that the assessee will comply with notices and any details sought by the appellate authority. 8. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 14/10/2024. Sd/- Sd/- [Partha Sarathi Chaudhury] [Prabhash Shankar] Judicial Member Accountant Member Dated: 14.10.2024. AK, PS (on tour) Copy of the order forwarded to: 1. Bansidhar Enterprises, Hazaribagh 2.ITO (1), Hazaribagh 3. CIT(A)-NFAC, Delhi 4. Pr. CIT, Hazaribagh 5. CIT(DR) 6. Guard File //True copy// BY ORDER, (Senior Private Secretary) (On Tour), ITAT, Ranchi "