Anupama Gupta, New Delhi V. ITO WARD - 1(1), Ghaziabad

ITA 8131/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1122 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-10-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Reason to believe; Reassessment proceedings; Set aside
• Section: 147; 148; 271(1)(c); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘A’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI N. K. CHOUDHRY, JUDICIAL MEMBER ITA No.8131/DEL/2019 [Assessment Year: 2009-10] Anupama Gupta A-52, Second Floor, Gurunanakpura, Laxmi Nagar, New Delhi-110092 Vs ITO, Ward-1(1), C.G.O. Complex-1, Hapur Chungi, Ghaziabad, Uttar Pradesh-201002 PAN-AHFPG5333C Assessee Revenue Assessee by None Revenue by Sh. Kanav Bali, Sr. DR Date of Hearing 12.10.2022 Date of Pronouncement 12.10.2022 ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is directed against the order of the Ld. CIT(A), Ghaziabad, dated 09.07.2019 pertaining to Assessment Year 2009-10. 2. Grounds of appeal reads as under:- 1. General & Principle of Natural Justice a. That the appellate order dated 09.07.2019 of Commissioner (Appeals) confirming the action of Ld. AO levying the penalty u/s 271(l)(c ) of Rs.2,66,300/- is contrary to law and the facts of the case, illegal and be therefore quashed outright. b. That on the facts and in the circumstances of the case, the Ld. CIT-(A) has erred in sustaining the levy of penalty U/S 271(1)(C) . He has not only failed to consider and 2 ITA NO.8131/DEL/2019 appreciate the explanation given by the assessee in respect of the addition & enhancement but has solely limited his order to the findings of appeal orders emanating from the quantum assessment. c. That on the facts and circumstances of the case Ld.AO restrict the assessee from presenting her stand at assessment proceedings by sending all notices to incorrect addresses & later on when Hon'ble CIT(A) forwarded additional evidence for verification, Hon'ble CIT(A) directed Ld. AO to send remand report without discussing & calling assessee to present her stand, thus no opportunity of being heard was ever given to the assessee which is against the principle of natural justice. d. That the Ld. Commissioner Of Income Tax (Appeals) has failed to appreciate that the grounds for initiation of penalty u/s 271(l)(c) were never given to the assessee and a blind reliance was placed on the assessment order only for levying penalty as in the impugned proceedings. 2. Penalty order passed without jurisdiction a. That Hon'ble CIT(A) has grossly erred in law and on facts and circumstances of the case by upholding the action of Ld AO of passing penalty order u/s 271(l)(c) in much hurry, without application of mind & moreover without having jurisdiction of the assessee in his ward. Therefore, the penalty order passed u/s 271(l)(c ) is bad in law invalid, illegal & void-ab-initio. 3. Non-fulfilment of jurisdictional conditions u/s 148 to 150 a. That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the reopening action of Ld AO u/s 148 made in violation of mandatory jurisdictional conditions stipulated under the Act. b. That on the facts and in the circumstances of the case and in law, Ld CIT(A) failed to appreciate that both initiation of proceedings and framing of assessment framed u/s 147 r.w.s. 144 are without satisfying the pre-conditions for invoking the provisions of section 148 of the Act and thus entire reassessment proceedings are invalid and untenable. 3 ITA NO.8131/DEL/2019 c. That Ld. AO and subsequently Hon'ble CIT (A) have erred in law and on facts and circumstances of the case in not appreciating the fact that neither reasons for issue of notice under section 148 had been provided nor notice u/s 148 had ever been served to the assessee. Therefore issue of notice under section 148 is bad in law and assessment order passed u/s 147 r.w.s 144 is liable to be quashed. 4. No reasons to believe, assessment order framed merely on suspicion a. That Ld. AO and subsequently Hon'ble CIT (A) have erred in law and on facts and circumstances of the case in not appreciating the fact that assessment or reassessment proceedings under section 147 could not be resorted to unless there was reason to believe, rather than suspect, that income had escaped assessment. Thus, reassessment order under section 147 ought to be set aside. 5. The Ld AO alleged that investment in the immovable property constituted undisclosed income a. That Hon'ble CIT(A) has grossly erred in law and on facts and circumstances of the case by upholding the action of Ld AO of invoking reassessment proceedings under section 147 of the Act merely on the basis of fallacious assumption that investment in the immovable property constituted undisclosed income and overlooked the fact that the source of purchase of the property need not be the income of the assessee. Therefore, reassessment order under section 147 ought to be set aside. 6. Non-issuance of notice u/s 143(2) before completion of assessment hence assessment order not sustainable. a. That the Ld. AO didn't issue any notice u/s 143(2) before completion of assessment, then such assessment is not sustainable in law. 7. Assessee's submission and additional evidence under rule 46A were not appreciated / considered a. That the assessee pleaded vehemently of no reasonable opportunity having been provided by the Assessing Officer at 4 ITA NO.8131/DEL/2019 the time of levying penalty u/s 271(l)(c ). The CIT-(A) didn't appreciate the assessee’s submission and additional evidence submitted during appellate proceedings while adjudicating the appeal and erred in sustaining the hurried levy of penalty without giving a reasonable opportunity to the assessee.” 3. Brief facts of the case leading to the levy of penalty u/s 271(1)(c) of the Act in this case are that in the assessment order, the Assessing Officer noted that the assessee is an individual and in this case, AIR information was received regarding purchase of immovable property for a consideration of Rs.39,00,000/-. On this premise, the notice was issued to the assessee but as per the Assessing Officer, there was no response by the assessee. In absence of any response from the assessee, The Assessing Officer concluded as under:- “On the date fixed on 20.09.2016 neither the assessee nor the representative of the assessee attended the proceedings and also no reply of the notices and questionnaire have been furnished by the assessee. During the year under consideration the assessee has purchased property jointly with Shri Shiv Kumar Gupta, husband, of Rs.30,43,000/- but as per purchase deed the circle rate of the property has been shown of Rs.19,33,000/- thus the difference comes to Rs.11,10,000/-. The assessee has not shown investment made for purchase of immovable property. The assessee has not furnished documentary of investment made for purchase of this property. In the absence of any documentary evidence, it cannot be ascertain whether the investment for purchase of property made by the assessee or by her husband. Hence, it is established that the investment made for purchase of property by the assessee herself out of undisclosed sources. . The difference of the value of the property amounting to Rs.11,10,000/-, as mentioned above, is being added in the income of the assessee. The assessee has concealed the investment made for purchase of property hence penalty proceedings u/s 271(1)(c) of the Income tax Act. 1961 is being initiated separately.” 5 ITA NO.8131/DEL/2019 4. On the above addition, the penalty u/s 271(1)(c) of the Act was levied. Upon assessee’s appeal, the Ld. CIT(A) noted the assessee’s contention that the assessee has not being served with notice and the Ld. CIT(A) referred to his own appellate order, wherein, some enhancement was done and further penalty was levied. The observation in this regard of the ld. CIT(A) are as under:- “5.2.1. Examination of facts reveals that the above contention of the appellant was examined while passing the order against the substantive order u/s 147/144 of the Assessing Officer wherein the addition of Rs.11,00,000/- has been confirmed in the order passed by undersigned in appeal no.394171601120218/34/2 dt.06.05.2019. It may not be out of place to mention that after examining the appellant’s contention even during remand proceedings the undisclosed investment has been enhanced by a sum of Rs.5,58,528/- in the said order and separate proceedings for imposition of penalty u/s 271(1)(c) in respect of enhanced income has already been initiated. It is noted that appellant failed to substantiate the source of investment of Rs.11,00,000/- as determined by the Assessing Officer. Even during appellant proceedings appellant failed to substantiate as to why penalty should not be imposed on the said sum. The appellant failed to substantiate non service of notice u/s 271(1)(c) especially considering the fact that appellant disowned original address i.e. 24B Gyan Khand-IV, Indirapuram, Ghaziabad as it is the admitted address in the purchase deed of the said flat.” 4.1. Thereafter, the Ld. CIT(A) reproduced the extract of the deed scanned and held that the assessee has failed to draw similarity of facts and circumstances of appellant’s case to the case laws relied upon. Thereafter, he held that the assessee has concealed income by furnishing inaccurate particulars of income. That thus, there is no aberration in the action of the Assessing Officer in imposing the penalty. 6 ITA NO.8131/DEL/2019 5. Against the above order, the Ld. CIT(A) is in appeal before us. 6. We have heard the Ld. DR and perused the record. None has appeared on behalf of the assessee despite notice issued, which have been duly served. Upon careful consideration of the facts and circumstances of the case, we note that plea of the assessee is that the Ld. CIT(A) has not considered the assessee’s submission and has passed his order only on the basis of his finding of his order in the quantum proceeding. We note that proper opportunity of being heard has not been given to the assessee at the level of the Revenue authorities. The Assessing Officer has passed an order u/s 147/144 of the Act. In this assessment order, the Assessing Officer has made the addition despite noting that there is absence of documentary evidence and it cannot be clearly ascertained whether the investment in property was made by the assessee or by her husband. Further, the Ld. CIT(A) in his appellate order has referred to the various case laws mentioned by the assessee but has not dealt with them by observing that the assessee has failed to show the similarity of these case as compared to similarity of assessee’s case. In our considered opinion, this amounts to non-speaking order of the Ld. CIT(A). Further, it is settled law that the quantum proceeding and penalty proceedings are different and have to be examined separately. In this view of the matter of the fact that in the assessment order, the Assessing Officer has even mentioned that he is not sure who is the owner of the property and the Ld. CIT(A) has even noted that before him it is has been contended that purchase was done from housing loan, the matter have not been investigated properly. In this view of the matter, 7 ITA NO.8131/DEL/2019 we set-aside this issue to the file of the Ld. CIT(A) and the Ld. CIT(A) is directed to examine the issue afresh and decide as per law. 7. In the result, this appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 12 th October, 2022. Sd/- Sd/- [N.K.CHOUDHRY] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 12.10.2022. f{x~{tÜ? f{x~{tÜ?f{x~{tÜ? f{x~{tÜ? Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi