RAJESH SHARMA, KAILASHPURI V. ITO Ward 4 (1), JAIPUR

ITA 62/JPR/2023

AI Insights

This case involves an appeal by Shri Rajesh Sharma against the penalty levied under section 271(1)(c) of the Income Tax Act, 1961, by the ITO, Ward 4(1), Jaipur. The penalty was imposed following the reassessment of the assessee's income for the assessment year 2010-11, where it was found that the assessee had not disclosed income amounting to Rs. 3,87,93,700 from various transactions. The Income Tax Appellate Tribunal, Jaipur, noted procedural lapses in the handling of the assessee's appeal by the CIT(A) and remitted the case for de novo adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132280 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-04-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 12-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Transactions in derivatives
• Section: 147; 271(1)(c); 69C; 143(3)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 62/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2010-11 Shri Rajesh Sharma, Kailashpuri cuke Vs. ITO Ward 4(1), Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ATEPS 7542 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 26/04/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 03/05/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 14.12.2022 [here in after ld. NFAC/CIT(A) ] for assessment year 2010-11 which in turn arise from the penalty order dated 22.06.2018 passed under section 271(1)(c) of the Income Tax Act, 1961 [ here in after to as Act ] by ITO, Ward 4(1), Jaipur. 2. In this appeal, the assessee has raised following grounds: - 2 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO “1. Penalty for A.Y 2010-11 as per order passed u/s 143(3) of the I.T. Act 1961 is bad in law. 2. The learned Authority has erred in levying penalty u/s 271(1)(c) of the IT Act 1961 of Rs. 1,40,865/-. 3. The appellant craves her rights to add, delete, amend any of the grounds on or before the hearing.” 3. Succinctly, the fact as culled out from the records is that the assessee is one of the beneficiaries of obtained accommodation entries of bogus profit of Rs. 3,87,93,700/- {(-) 6170950, 21824600, 9701800, 23518200, (-) 8690150, (-) 27223600, 1333800). On sale of shares/commodities through M/s JKT Trading, Pioneer Trading, R S Enterprises, R. K. Trading, Rupam Traders, Suruchi Trading, V K Singhania & Co. and not shown the income in return of income in during the year under consideration. Therefore, after believing that the income to the tune of Rs. 3,87,93,700/- has escaped assessment, the case of the assessee was reopened by invoking the provisions of section 147 to the I.T. Act 1961 after recording the reasons. Notice 148 was issued on 29.03.2017 with prior approval of Pr. CIT-02, Jaipur. The notice was duly served upon the assessee. In response to this, the assessee attended & produced copy of e-return of income filed on 22.10.2017 in response to notice u/s 148 and declaring income of Rs. 1,20,000/-. The assessee has also requested to provide reason for issuance of notice u/s 148 of the Act. Hence, reasons for issuance of notice u/s 148 was supplied. During the year, assessee derives income from 3 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO salary of Rs. 1,20,000/- and loss on trading of commodity of Rs. 95,306/-. During the proceedings, assessee was asked to furnish complete details of transactions made with NMCE. In response, thereto, the assessee has filed details of transactions made with broker along with ledger account, global report and contract note. On perusal of details filed, it is found that assessee has made transactions with MCX & NMCE and incurred loss of Rs. 95,306/-. After analyzing the data received from the broker, a show cause notice was issued on 15.12.2017 and asked to the assessee as to why profit of Rs. 3,87,93,700/- should not be added and commission @ 2% paid in lieu of getting entry of profit should not be added. The assessee has filed replied and submitted that all the trades allegedly done by him for getting entry of profit were already considered by him before filing of return. The assessee has furnished reconciliation statement of trades entered in by him through tainted sub-brokers of counter party. The assessee has submitted that he has entered in NMCE & MCX through broker M/s Motisons commodities Pvt. Ltd. It is submitted that during the year under consideration he incurred loss of Rs. 95,306/- on commodity transactions at MCX/NMCE. Although, the assessee has shown the loss of Rs. 95,306/- in his return of income, but it is seen that the assessee has not declared any expenditure of commission for getting the entry of profit. In response to 4 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO show cause notice, the assessee has denied to pay any commission. The reply filed by the assessee has been considered by the AO but found not tenable. Looking to the facts and circumstances of the case, it is held that assessee has made of commission of Rs. 7,75,874/- i.e. 2% of Rs. 3,87,93,700/-. Thus, the amount of commission of Rs. 7,75,874/- is added to the total income of the assessee u/s 69C of the Act. 4. After the culmination of the assessment proceeding, penalty proceeding was initiated against the assessee wherein the ld. AO noted the assessee has not filed appeal against the assessment order before the ld. CIT(A). Based on that the ld. AO noted the assessee is agreed with the addition made during the assessment proceedings. The ld. AO further noted that the assessee failed to disclose true income while filling his return of income. The ld. AO also noted the assessee has concealed particulars of income his income Rs. 7,75,874/- and thereby levied a penalty of Rs. 1,40,865/- u/s. 271(1)(c). 5. Aggrieved from the order of the ld. AO levying penalty the assessee has preferred an appeal before the ld. CIT(A). In the appellate proceeding the assessee vide submission dated 26.11.2022 requested for 5 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO adjournment. Without dealing with that application of the adjournment whether the same is rejected or otherwise the appeal of the assessee decided ex-party without giving proper opportunity of being heard to the assessee. 6. The ld DR is heard who relied on the findings of the lower authorities and vehemently argued that the assessee has not filed the return of income even though he is supposed to do so and even before the bench the assessed did not appear to represent the appeal. Therefore, ld. DR prayed to dismiss the appeal of the assessee. 7. We have heard the rival contentions and perused the material placed on record. The bench noted that on the date of hearing the assessee sought an adjournment before the ld. CIT(A). The ld. CIT(A) has neither dismissed the adjournment application nor given any further date of hearing and he has proceeded ex-party which is not correct. Thus, on careful consideration of the facts of the case available on record we are of the considered we that the assessee is deprived of the just and has not been allowed proper opportunity of being heard and therefore, we are of the view that the assessee should get an opportunity of being heard by the ld. 6 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO CIT(A). We see no harm in providing one more opportunity of hearing to the assessee, In case, however, the assessee does not fully cooperate in expeditious disposal of remanded proceedings, learned CIT(A) will be at liberty to take such action, apart from disposal of appeal based on material on record, as he deems fit and proper and judicious. The matter is thus restored to the file of the learned CIT(A) for adjudication de novo after affording yet another opportunity of hearing to the assessee, by way of a speaking order, and in accordance with the law. Ordered, accordingly. As the matter is remitted to the file of the learned CIT(A) for fresh adjudication. We see no need to deal with other grievances of the assessee which deal with the merits. These aspects of the matter, as of now, are infructuous, and are dismissed as infructuous. 8. In the result the appeal is allowed for statistical purposes in the terms indicated above. Order pronounced in the open court on 03/05/2023. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur 7 ITA No. 62/JP/2023 Rajesh Sharma vs. ITO fnukad@Dated:- 03/05/2023 *Ganesh Kumar vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Rajesh Sharma, Kailashpuri 2. izR;FkhZ@ The Respondent- ITO, Ward 4(1), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 62/JP/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar