BHIM SINGH, KOTA RAJASTHAN V. DCIT, C-2, KOTA

ITA 91/JPR/2023

AI Insights

The case involves Bhim Singh, the appellant, who contested a penalty imposed by the AO and upheld by the CIT(A) for the assessment year 2015-16. The penalty was levied for alleged concealment and furnishing of inaccurate particulars of income. The AO had initially made disallowances and additions to the assessee's declared income, which were partially reduced by the CIT(A) in the quantum appeal. However, the penalty was contested on grounds that the AO's order was ex-parte and lacked specific findings required to justify the penalty. The Tribunal's decision emphasized the need for a 'speaking order' from the AO and CIT(A), detailing the reasons for the penalty, which was absent in this case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132208 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-04-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 26-02-2023
• Other Referred Cases: Shri Vishnu Tambi vs. DCIT, CIT vs. S. Rahamat Khan Birbal Khan Badruddin & Party, ACIT vs. Bansiwala Iron & Steel Re-rolling Mills, CIT vs. Subhash Trading Co., Harigopal Singh vs. CIT, ACIT vs. Ganpat Lal Goyal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 142(1); 250; 274; 143(2)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” 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. 91/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2015-16. Bhim Singh, Brij Raj Bhawan, Civil Lsines, Kota. cuke Vs. DCIT, Circle-2, Kota. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AAAHB 7814 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj l s@ Assessee by : Shri B.V. Maheshwari, (CA) jktLo dh vksj ls@ Revenue by : Smt. Runi Pal (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 25/04/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 10/05/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 30.12.2022 of ld. CIT (A), National Faceless Appeal Centre (NFAC) Delhi passed under section 250 of the IT Act for the assessment year 2015-16. The assessee has raised the following grounds :- 2 ITA No. 91/JP/2023 Bhim Singh, Kota. 1. That the ld. AO grossly erred on law in levy of penalty, without giving opportunity to the assessee, more so the ex-parte order made on 19.03.2020 which is served on 11.06.2020. Hence the order is unlawful. The ld. CIT (A) facelsss also erred in confirming the penalty levied by ld. AO. 2. That the ld. AO grossly erred on law and facts in levy of penalty Rs. 3,51,663/- u/s 271(1)(c) of IT Act, 1961. That the ld. CIT (A) also erred in confirming the levy of penalty levied by the ld. AO. 3. That the ld. AO grossly erred on law and fact in levy of penalty when the matter is pending with Hon. CIT (A), Kota for rectification of order in appeal No. 243/2017-18 dtd. 08.03.2019. The ld. CIT (A) have also not considered the ground of assessee, hence the matter is still sub-judice. 4. That the appellant craves to leave, add, alter the grounds of appeal. 2. The brief facts of the case are that the assessee filed his return of income on 27.03.2016 declaring total income of Rs. 40,81,060/-. Subsequently, the case was selected for scrutiny. Notice under section 143(2) of the I.T. Act, 1961 was issued on 22.09.2016 by the AO and duly served upon the assessee on 26.09.2016. Thereafter, notice under section 142(1) of the Act was issued to the assessee on 09.02.2017 which was duly served upon the assessee on 13.02.2017. In compliance to the notices, the assessee filed written submissions along with books of accounts, vouchers, bills etc. The AO considered the submissions but being not satisfied with the details submitted by the assessee, completed the assessment vide order dated 31.12.2017 computing the total income at Rs. 92,71,400/- by making disallowances of expenses claimed by the assessee and thereby making additions. Aggrieved by the order of the AO, the assessee preferred appeal before ld. CIT (A). The ld. CIT (A) in quantum appeal, considering the submissions and evidences adduced in 3 ITA No. 91/JP/2023 Bhim Singh, Kota. support of the expenses, restricted the disallowance to the extent of 20% by allowing substantial relief to the assessee. Consequently, penalty proceedings were initiated and order of penalty under section 271(1)(c) read with section 274 of the Act was passed by the AO, thereby levying penalty of Rs. 3,51,663/- for furnishing inaccurate particulars of his income and for concealing the income. 3. Aggrieved by the said penalty order, the assessee preferred appeal before the ld. CIT (A), National Faceless Appeal Centre, Delhi but could not succeed. The ld. CIT (A), NFAC dismissed the appeal of the assessee. Now the assessee is in appeal before us. 4. One of the interesting facts in the present case is that the assessee felt aggrieved by the appeal effect order passed by the AO and consequently filed rectification application before the ld. CIT (A) to give proper direction to the AO which is still pending. The assessee has raised this issue in Ground No. 3 of the appeal. However, since the assessee has not pressed Ground No. 3 of the appeal at the time of hearing, the same stands dismissed as not pressed. 5. Now we take up Ground Nos. 1 & 2 of the appeal and adjudicate as under : 6. We have heard rival contentions at length, perused the material available on record and gone through the orders of the revenue authorities. On perusal and analyzing the order of imposition of penalty, we find that there is absolutely no discussion in the order of assessment as to how the assessee has furnished inaccurate particulars of income and how he has concealed the income. Absolutely no satisfaction has been recorded by the AO in this regard in the order of 4 ITA No. 91/JP/2023 Bhim Singh, Kota. assessment. Similarly, the ld. CIT (A) while passing the impugned order has also made no discussion about specific circumstances which warranted the revenue officers to impose penalty upon the assessee. We are conscious of the fact that the ld. CIT (A) and AO being the quasi judicial authorities were under the obligation to pass a speaking order mentioning the circumstances as to how penalty for filing inaccurate particulars of income and for concealing the income by the assessee is attracted. Even otherwise, it is by now settled position of law that no penalty is attracted where additions are made on estimation as has been held by the Coordinate Bench of the Tribunal, Jaipur in the case of Shri Vishnu Tambi vs. DCIT in ITA Nos. 965 to 969/JP/2018 dated 14.09.2020 and also in the cases of CIT vs. S. Rahamat Khan Birbal Khan Badruddin & Party, 240 ITR 778 (Raj.), ACIT vs. Bansiwala Iron & Steel Re-rolling Mills, 21 TW 533 (JP), CIT vs. Subhash Trading Co., 221 ITR 110 (Guj.), Harigopal Singh vs. CIT, 258 ITR 85 (P&H), ACIT vs. Ganpat Lal Goyal, 32 TW 91 (JP). Considering the totality of facts and circumstances as discussed and taking into consideration the factual aspects in the present case, since there is no specific finding by the revenue authorities as to how the assessee furnished inaccurate particulars of income and concealed his income, no penalty is attracted. The AO has simply invoked the provisions of section 271(1)(c) of the Act without recording any satisfaction and moreover the addition in the present case are made on estimation and keeping in view the decision of the Coordinate Bench of Jaipur Tribunal as well as keeping in view the decisions of Hon’ble High Courts as discussed above, we delete the penalty. 5 ITA No. 91/JP/2023 Bhim Singh, Kota. 7. In the result, this appeal of the assessee is allowed. Order pronounced in the open court on 10/05/2023. Sd/- Sd/- ¼ jkBkSM+ deys'k t;arHkkbZ ½ ¼lanhi xkslkbZ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 10/05/2023. Das/ vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Shri Bhim Singh, Kota. 2. izR;FkhZ@ The Respondent- The DCIT, Circle-2, Kota. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {ITA No. 91/JP/2023} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 6 ITA No. 91/JP/2023 Bhim Singh, Kota.