HEMANT SINGH, BHOPAL,BHOPAL V. INCOME TAX OFFICER, WARD-4(1), RAIPUR, RAIPUR

ITA 420/RPR/2024

AI Insights

The case involves an appeal by Hemant Singh against a penalty imposed by the Income Tax Officer under Section 271(1)(b) of the Income Tax Act, 1961, for non-compliance with statutory notices during the assessment year 2013-14. The penalty was initially confirmed by the Commissioner of Income-Tax (Appeals), but both the assessment order and the penalty were later contested in the Tribunal. The Tribunal found that the assessment order, which led to the penalty, had been set aside in a previous appeal, and thus, the penalty proceedings could not stand independently. The matter was restored to the Assessing Officer for re-adjudication in line with the Tribunal's earlier directions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35694 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 17-09-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: KASHISH KUMAR
• Keywords: Opportunity of being heard; Principle of natural justice; Non compliance
• Section: 147; 148; 142(1); 69A

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 420/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Shri Hemant Singh 13, Aranya Enclave, Forest Colony, Baghmughaliya, Bhopal-462026 (MP) PAN: DZDPS1920N .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-4(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Ms. Kashish Kumar, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.10.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 23.10.2024 2 Hemant Singh Vs. ITO, Ward-4(1), Raipur ITA No. 420/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 10.06.2024, which in turn arises from the order passed by the A.O under Sec. 271(1)(b) of the Income- tax Act, 1961 (in short ‘the Act’) dated 19.09.2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the facts and in the circumstances of the case, the Learned A.0 has erred on facts and in law in imposing penalty of Rs.30,000/-u/s.271(1)(b) on account of alleged non compliances of statutory notices issued and the Learned CIT (Appeals), National Faceless Appeal Centre, Delhi has erred in confirming the same, as the assessee was prevented by reasonable and sufficient cause from making compliance, as such, the penalty is contrary to facts, law and legislative intent, hence, it is prayed that the penalty of Rs.30,000/- confirmed by the Learned CIT (Appeal) may kindly be cancelled. 2. Without prejudice to the above, alternatively, it is submitted that on the facts and in the circumstances of the case, the Learned CIT (Appeal) is not justified in passing the order and confirming the additions in an ex-parte order without providing sufficient opportunity of being heard to the assessee and without independently deciding the grounds on merit and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal) is liable to be declared as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal) may kindly be declared as illegal and bad- in-law on account of violation of principles of natural justice. 3. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal.” 3 Hemant Singh Vs. ITO, Ward-4(1), Raipur ITA No. 420/RPR/2024 2. Succinctly stated, the A.O. based on information that though the assessee had purchased in cash ICICI Prudential Life Insurance policy for Rs.7.50 lacs, but had not furnished details in his return of income, initiated proceedings u/s. 147 of the Act. 3. As the assessee in the course of the assessment proceedings failed to comply with the notices which were issued u/s. 142(1) of the Act, dated 02.02.2022 and 15.02.2022, therefore, the A.O after treating the investment of Rs.7.50 lacs (supra) made by the assessee as having been sourced from his unexplained money u/s. 69A of the Act was constrained to frame the assessment vide his order passed u/s. 147 r.w.s. 1444 r.w.s. 144B of the Act, dated 23.03.2022. As the assessee in the course of assessment proceedings had failed to comply with the notices issued u/s. 142(1) of the Act, therefore, the A.O. while culminating of the assessment proceedings initiated penalty proceedings u/s. 271(1)(b) of the Act. Thereafter, the A.O. vide his order passed u/s. 271(1)(b) of the Act, dated 19.09.2022 imposed a penalty of Rs.30,000/- upon the assessee. 4. Aggrieved, the assessee assailed the penalty imposed by the A.O u/s. 271(1)(b) of the Act before the CIT(Appeals) but without success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 4 Hemant Singh Vs. ITO, Ward-4(1), Raipur ITA No. 420/RPR/2024 6. Ms. Kashis Kumar, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that the order of assessment passed by the A.O u/w. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 23.03.2022, wherein the impugned penalty proceedings u/s. 271(1)(b) were initiated, had been set-aside by the Tribunal vide its order passed in ITA No.382/RPR/2024, dated 08.10.2024. 7. The Ld. Departmental Representative (for short ‘DR’) did not controvert the aforesaid factual position. 8. We have thoughtfully considered the facts involved in the present case in the backdrop of the contentions advanced by the Ld. Authorized Representatives of both the parties. 9. Admittedly, it is a matter of fact borne from the record that the assessment order passed by the A.O u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 23.03.2022, wherein the impugned penalty proceedings u/s. 271(1)(b) of the Act were initiated by the A.O, had thereafter been set-aside by the Tribunal vide its order passed in ITA No.382/RPR/2024, dated 08.10.2024 with a direction to re-adjudicate the “Ground of appeal No.1” after affording a reasonable opportunity of being heard to the assessee. For the sake of clarity, the observations of the Tribunal are culled out as under:” “13. Although, I concur with the Ld. CIT(Appeals) that as no written submissions had been filed by the assessee to dislodge the view taken by the A.O that the investment of Rs.7.50 lacs made by the 5 Hemant Singh Vs. ITO, Ward-4(1), Raipur ITA No. 420/RPR/2024 assessee towards purchase of policy of ICICI Prudential Life Insurance was sourced out of his unexplained money, which, thus, was liable to added in his hands u/s. 69A of the Act, but the assessee’s specific claim vide “Ground of appeal No.1” i.e. the absence of a valid service of notice u/s. 148 of the Act could not have been subsumed in the said adjudication and was required to be separately dealt with. As the assessee had specifically assailed the validity of the jurisdiction assumed by the A.O for framing the assessment in his case vide order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 23.03.2022 for the reason that no notice u/s. 148 of the Act dated 31.03.2021 was served upon him, therefore, the CIT(Appeals) remained under a statutory obligation to have dealt with the said grievance of the assessee and adjudicated the same after calling for the record. As the CIT(Appeals) had failed to deal with the aforesaid grievance of the assessee, therefore, I am of the view that to the said extent, the matter requires to be restored to the file of the CIT(Appeals) with a direction to adjudicate the “Ground of appeal No.1” that was raised before him qua the framing of the assessment u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 23.03.2022 de-hors a valid service of notice u/s. 148 of the Act. Accordingly, the matter is restored to the file of the CIT(Appeals) for the limited purpose of adjudicating the “Ground of appeal No.1”. Needless to say, the CIT(Appeals) in the course of set-aside proceedings shall afford a reasonable opportunity of being heard to the assessee who shall remain at a liberty to substantiate his claim on the basis of fresh documentary evidence, if any. 14. In the result, appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations.” 10. As the assessment order passed by the A.O u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 23.03.2022 which had formed the very genesis for initiating the impugned penalty proceedings, had been set-aside to the file of the A.O, therefore, the present proceedings cannot survive on a standalone basis and are destined to meet the same fate. Accordingly, the order of the CIT(Appeals) is set-aside and the matter is restored to the file of the A.O for fresh adjudication after giving effect to the directions of the 6 Hemant Singh Vs. ITO, Ward-4(1), Raipur ITA No. 420/RPR/2024 Tribunal in the quantum appeal of the assessee, i.e. ITA No.382/RPR/2024, dated 08.10.2024. 11. In the result, the appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 23rd day of October, 2024. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 23rd October, 2024. **#SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, //True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "