Smt Vanita S. Agarwal, Hyderabad V. DCIT., Central Cirlce - 4, Hyderabad, Hyderabad

ITA 10/HYD/2015

• Counselvise Citation: 1022514 RSA 2015
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 21-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-01-2015
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: B SAI PRASAD
• Section: 143(3); 69; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 10/HYD/2015 ASSESSMENT YEAR: 2007-08 SMT. VANITA S. AGARWAL, HYDERABAD [PAN: ADCPA4929R] VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SAI PRASAD, AR FOR REVENUE : SHRI RAJAT MITRA, DR DATE OF HEARING : 21-08-2015 DATE OF PRONOUNCEMENT : 26-08-2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST CONFIRMATION OF PENALTY U/S. 271(1)(C) OF THE INCOME TAX ACT [ACT] BY THE COMMIS SIONER OF INCOME TAX(APPEALS), VIJAYAWADA VIDE ORDER DATED 27-10-20 14. 2. ASSESSING OFFICER (AO), IT SEEMS, HAS COMPLETED THE ASSESSMENT U/S. 143 (3) R.WS. 147 ON 30-12-2009, DETERMINING T HE TOTAL INCOME OF RS. 5,48,818/- AGAINST THE RETURNED INCOME OF RS. 1,47,818/-. DURING I.T.A. NO. 10/HYD/2015 SMT. VANITA S. AGARWAL :- 2 -: THE ASSESSMENT PROCEEDINGS, THE AO HAS MADE ADDITIO N OF RS. 4,15,000/- ON ACCOUNT OF UN-EXPLAINED INVESTMENT U/ S. 69 OF THE ACT. AO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) FOR THE ADDITION MADE IN THE ASSESSMENT AND LEVIED PENALTY U/S. 271(1)(C) VI DE ORDER DT. 30-06- 2010 OF RS. 1,43,500/-. WHEN THIS ORDER WAS SERVED , ASSESSEE CONTENDED BEFORE THE CIT(A) THAT NEITHER THE ORIGIN AL ASSESSMENT ORDER U/S. 143(3) NOR THE NOTICE U/S. 271(1)(C) WAS RECEI VED BY ASSESSEE AND SUBMITTED THAT THE AO DOES NOT HAVE ANY JURISDICTIO N. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS SOUGHT TRANSFER OF THE CASE TO HYDERABAD VIDE APPLICATION TO THE CIT(A)-XIV AND SO THE AO DO ES NOT HAVE ANY JURISDICTION. THE APPEAL WAS PREFERRED BEFORE THE CIT(A), HYDERABAD WHO REFERRED THE MATTER TO THE AO FOR COMMENTS. IN THE REPORT, AO HAS OBSERVED THAT THOUGH PRIMA FACIE, NO PROOF OF SERVICE OF THE ASSESSMENT ORDER AND THE PENALTY NOTICE WAS AVAILABLE ON RECOR D, ONE THING IS CLEAR THAT ASSESSEE WAS MADE AWARE OF THE FACT THAT SCRUT INY ASSESSMENT WAS COMPLETED AND PENALTY PROCEEDINGS WERE INITIATED AN D FINALILZED. THE CIT(A) RECORDS THAT THE REPORT OF THE AO AND LETTER ON ADDL. CIT WERE SENT TO ASSESSEE FOR OBJECTIONS BUT THE SAME WERE RETURN ED UN-SERVED BY THE POSTAL AUTHORITIES WITH THE REMARK THAT ASSESSEE L EFT. THEREAFTER, LD. CIT(A) WITHOUT CONSIDERING MERITS OF THE ADDITION/ ISSUE, SURPRISINGLY CONFIRMED THE PENALTY OF RS. 20,26,517/- AS AGAINST RS. 1,43,500/- LEVIED BY THE AO. ASSESSEE AGGRIEVED AND RAISED FI VE GROUNDS ON THE ISSUE OF PENALTY AS WELL AS JURISDICTION. 3. LD. COUNSEL SUBMITTED THAT NO ASSESSMENT ORDER O R PENALTY NOTICE WAS SERVED EVEN AS OF NOW AND ASSESSEE COULD NOT CO NTEST THE ADDITION MADE IN ASSESSMENT AS NO ORDER WAS SERVED. THEREFO RE, ASSESSEE IS NOT IN A POSITION TO FURNISH EVEN A COPY OF THE ASSESSM ENT ORDER TO EXAMINE ON WHAT BASIS THE PENALTY WAS LEVIED. HE FURTHER S UBMITTED THAT ASSESSEE WAS ATTENDING TO THE CIT(A) AND THEREFORE, QUESTION OF NON- I.T.A. NO. 10/HYD/2015 SMT. VANITA S. AGARWAL :- 3 -: SERVICE OF NOTICES DOES NOT ARISE. FURTHER, IT WAS SUBMITTED THAT CIT(A) WRONGLY CONFIRMED A PENALTY OF RS. 20,26,517/- AS A GAINST PENALTY LEVIED BY AO OF RS. 1,43,500/- . IT WAS HIS REQUEST THAT THE ORDER OF PENALTY SHOULD BE CANCELLED. 4. LD. DR HOWEVER SUPPORTED THE ORDERS OF CIT(A). 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) CANNOT BE UPHELD. FIRST OF ALL, THERE IS NO EVIDENCE THAT ASSESSEE WAS SERVED WITH EITHER ASSES SMENT ORDER IN WHICH SO CALLED ADDITION WAS MADE OR WITH A NOTICE U/S. 2 71(1)(C). WITHOUT SERVING ANY NOTICE ON ASSESSEE AND GIVING A PROPER OPPORTUNITY TO REBUT THE CONTENTIONS, NO PENALTY CAN BE LEVIED. AO WHIL E ADMITTING THAT THERE IS NO EVIDENCE OF SERVICE, SURPRISINGLY STATES THAT ASSESSEE WAS MADE AWARE OF THE FACT THAT SCRUTINY ASSESSMENT WAS COMP LETED AND PENALTY NOTICES WERE INITIATED. HOW ASSESSEE WAS MADE AWAR E HAS NOT BEEN STATED BY THE AO. AS SEEN FROM THE REPORT OF THE A O, EXTRACTED IN PARA 5 OF THE ORDER, THE REPORT ALSO DOES NOT SEEM TO PERT AIN TO ASSESSEE AS THE AO MENTIONS PENALTY OF RS. 20,26,517/- IN THE REPOR T WHEREAS, ASSESSEE WAS LEVIED PENALTY OF RS. 1,43,500/-. THIS INDICAT ES THAT THE REPORT RELIED UPON BY THE CIT(A) ALSO MAY NOT PERTAIN TO A SSESSEE. EVEN AS SEEN FROM THE PENALTY ORDER, THE AO MENTIONS THE ASSESSM ENT YEAR AS 2004- 05, WHEREAS, PENALTY IS SUPPOSED TO HAVE BEEN IMPO SED FOR AY. 2007-08 AS MENTIONED IN THE DEMAND NOTICE U/S. 156 OF THE A CT. EVEN MORE SURPRISING IS THAT THE LD. CIT(A) CONFIRMS THE PENA LTY OF RS. 20,26,517/-. THESE INDICATE THAT THERE IS NO APPLICATION OF MIND BY ANY OF THE OFFICERS. SINCE ASSESSEE WAS NOT SERVED WITH ANY NOTICE, PENA LTY ORDER CANNOT BE SUSTAINED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND CANCEL THE PENALTY. IF THE AO SERVES THE ASSESSMENT ORDER TO ASSESSEE, ASSESSEE MAY CONTEST THE ADDITION MADE IN THE ASSESSMENT AND AFTER THAT IF ANY I.T.A. NO. 10/HYD/2015 SMT. VANITA S. AGARWAL :- 4 -: PENALTY IS LEVIABLE THE SAME CAN BE CONSIDERED BY T HE AO. TILL SUCH TIME ASSESSEE CANNOT BE VISITED WITH PENALTY. ASSESSEE S GROUNDS ARE ALLOWED. 6. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2015 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 26 TH AUGUST, 2015 TNMM COPY TO : 1. SMT. VANITA S. AGARWAL, 21-2-631, URDUGALLI, PAT HERGATTI, HYDERABAD. 2. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCL E-4 , HYDERABAD. 3. CIT(APPEALS), VIJAYAWADA. 4. CIT-II, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.