Sh Parvinder Jit Singh Bindra, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 380/ASR/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9218 (ITAT-AMRITSAR)
• Duration Of Justice: 6 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2001-2002
• Appeal Filed On: 07-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 380/Asr/2016 Assessment Year: 2001-02 Sh. Parvinder Jit Singh Bindra, 232, Guru Gobind Singh Nagar, Jalandhar [PAN: AAOPB 0966C] Vs. The Income Tax Officer, Ward 3(3), Jalandhar (Appellant) (Respondent) Appellant by : J. S. Bhasin, Adv. Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 19.05.2022 Date of Pronouncement: 08.07.2022 ORDER Per Dr. M. L. Meena, AM: The appeal has been filed by the assessee against the impugned order dated 18.04.2016 passed by the Ld. Commissioner of Income Tax (Appeals)-2, Jalandhar in respect of the Assessment Year 2001-02. 2. The assessee has raised the following grounds of appeal: “1. That the ld. CIT(A) was not justified in upholding the impugned penalty order as passed by the AO, when it had jurisdictional defect of lack of satisfaction in assessment order, in as much as there was neither any direction nor any charge specified in the assessment order. ITA No. 380/Asr/2016 Parvinder Jit Singh Bindra v. ITO 2 2. That since the Id.AO had levied the penalty, without giving adequate time to assessee to file his explanation, the order thus passed, without considering assessee's explanation, was illegal being arbitrary and unreasonable. 3. That the Id.CIT(A) has grossly erred in confirming the levy of penalty, for the alleged concealment of income to the extent of Rs.26,00,000/- (Rs.10,00,000/- +Rs.26,00,000/-), simply swayed by quantum, unmindful of the most bonafide explanation filed before him, more so when this explanation could not be filed before the AO. 4. That by any reckoning, the Id.CIT(A) was not justified in rejecting the assessee's explanation supported by cogent evidence, not to treat Rs.16,00,000/-, received from one Shri Amber Nath Benerji of Delhi, against sale of Plot, as unexplained for the purpose of penalty, failure of assessee to succeed in quantum, notwithstanding.. 5. That the order of the Id. CIT(A), is wholly arbitrary, unjust and against law and facts of the case.” 3. The appellant assessee contended in the grounds that that the ld. CIT(A) grossly erred in law and on facts in sustaining the impugned penalty, as levied by the ITO u/s 271(1)(c), even when the salary paid to partners, disallowed in assessment, was within the limits prescribed u/s 40(b)(v); that the ld. CIT(A) was not justified in arbitrarily brushing aside the assessee’s most plausible explanation filed in appeal to summarily uphold the levy of penalty against law and facts of the case. 4. Per contra, the Ld. DR relied upon the impugned order and reiterated the contention of the CIT(A), but he has no objection to restoring the matter to CIT(A) for afresh adjudication. ITA No. 380/Asr/2016 Parvinder Jit Singh Bindra v. ITO 3 5. We have heard the Ld. DR and have gone through the material available on record. Admittedly, the AO made disallowance of Rs. 10,80,000/- to the income of the firm as per terms of partnership deed, by allowing allowed total salary of Rs.7,20,000/- out of Rs. 18,00,000/- to all the partners and. Accordingly, the AO has levied penalty u/s 271(l)(c) of the Income Tax Act, 1961 for furnishing inaccurate particulars of income. The appellant objected to the order of the ld. CIT(A) that he was not justified in arbitrarily brushing aside the assessee’s most plausible explanation filed in appeal to summarily uphold the levy of penalty against law and facts of the case. 6. The contention of the ld. AR that details required by the CIT(A) were available on record but the same was arbitrarily brushed aside by him though the assessee’s most plausible explanation filed in appeal ought to rebut to the assessee before summarily upholding the levy of penalty against law and facts of the case. Considering the appellant contention that it is inferred that in absence of sufficient opportunity of being heard to produce the necessary further documents if required as per principles of natural justice, we find it deem fit to restore the matter back to the file of the CIT(A) to adjudicate the issue afresh, as per provisions of law, after taking into consideration the material evidence on record and after affording sufficient opportunity of being heard to the assessee, as per principles of natural justice. Accordingly, the case is restored to the CIT(A), for afresh adjudication of the issue of penalty u/s 271(1)(c) as regards to the addition made against disallowance of salary and remuneration in terms of partnership deed. No doubt, the assessee shall cooperate in the fresh proceedings before the CIT(A). ITA No. 380/Asr/2016 Parvinder Jit Singh Bindra v. ITO 4 7. In result, the appeal stands allowed for statistical purpose. Order pronounced in the open court on 08.07.2022. Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T. True Copy By Order