SHRIKANT SHARMA, DHAMDHA,DURG V. INCOME TAX OFFICER, WARD-2(1), BHILAI, DURG

ITA 169/RPR/2025

AI Insights

The case involves an appeal by Shrikant Sharma against the penalty imposed under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2013-14. The penalty was confirmed by the Ld.CIT(Appeals)/NFAC, Delhi. The primary contention was that the quantum appeal, which was the basis for the penalty, was restored to the file of the Ld. CIT(Appeals)/NFAC by the Tribunal. Both the assessee's counsel and the Sr. Departmental Representative agreed that the penalty appeal should also be restored to maintain consistency with the quantum appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298572 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Other Referred Cases: Mohd. Mohatram Farooqui vs. CIT (SC) 2010-TIOL-23-SC-IT, Sanjay Gupta Vs. CIT (2014) 366 ITR 18 (Del)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SUNIL KUMAR AGRAWAL
• Keywords: Set aside; Principle of natural justice

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.169/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2013-14 Shrikant Sharma Village: Birjhapur, Taluka : Dhamdha, Dist. Durg-491 331 (C.G.) PAN: CAYPS4948D .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-2(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Sunil Kumar Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.04.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 21.04.2025 2 Shrikant Sharma Vs. ITO, Ward-2(1), Bhilai ITA No.169/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM This appeal preferred by the assessee emanates from the order passed by the Ld.CIT(Appeals)/NFAC, Delhi dated 14.02.2025 confirming penalty imposed by the A.O u/s.271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) for A.Y. 2013-14 as per the grounds of appeal on record. 2. At the very outset, the Ld. Counsel for the assessee submitted that as the quantum appeal of the assessee (ITA No.148/RPR/2025) based on which the impugned penalty has been imposed, was restored to the file of the Ld. CIT(Appeals)/NFAC by the Tribunal vide order dated 17.04.2025, therefore, the appeal on penalty also be restored to the file of the Ld. CIT(Appeals)/NFAC. The Ld. Counsel in support of his aforesaid contention has filed the copy of the order of the quantum appeal passed by the Tribunal dated 17.04.2025. 3. The Ld. Sr. Departmental Representative has fairly conceded to the contentions advanced by the Ld. Counsel for the assessee. 4. I have heard the parties herein and perused the material available on record as well as considered the order of the quantum appeal dated 17.04.2025. On a perusal of the order of the quantum appeal dated 3 Shrikant Sharma Vs. ITO, Ward-2(1), Bhilai ITA No.169/RPR/2025 17.04.2025, it is observed that the same has been restored to the file of the Ld. CIT(Appeals)/NFAC observing as follows: “6. In the course of proceedings before the revenue authorities, it has been pointed out by the assessee that he is an agriculturist/farmer and having agricultural income and the source of the cash deposits is from such agriculture proceeds. However, the fact remains that the assessee has neither filed return of income originally nor filed return of income in compliance to notice u/s.148 of the Act. Therefore, it was not possible for the department to determine and investigate regarding the source of such cash deposits in the bank account of the assessee. It is also the fact that during the appellate proceedings before the Ld.CIT(Appeals)/NFAC, a remand report was called for wherein the assessee made submissions before the A.O that the assessee has done transaction of shares with a SEBI registered broker and therefore, in the remand report the A.O has mentioned that there arises a doubt whether the cash deposits are from agricultural income or from income received through transaction of shares. 7. At the time of hearing, the Ld. Counsel for the assessee submitted that the earlier counsel who was dealing with the matter has wrongly reported before the A.O at the time of remand proceedings by submitting that the assessee dealt with shares through registered broker of SEBI, but the fact remains as has been disclosed in the sworn in affidavit filed by the assessee before the bench that the assessee has never ever made any transaction through any broker of SEBI. Rather, the assessee is only having agricultural income. These facts were also accepted by the Ld. Sr. DR. The Ld. Sr. DR could not provide any evidence refuting these facts or could not show that the assessee did transact in shares. 8. In my considered view, in the interest of justice, the factual matrix needs to be revisited through proper verification at the level of the Ld. CIT(Appeals)/NFAC to understand what exactly is the source of income of the assessee. That as has been claimed in the affidavit that the assesse is only having income from agriculture proceeds, these facts needs to be verified. Further, it was contented by the Ld. Counsel that the amount of Rs.26,03,750/- which was deposited in the account of the assessee was not a single transaction. Rather, it is the culmination of small amounts which was regularly deposited in the bank account of the assessee. These are the essential facts whose examination goes to the root of the matter. 4 Shrikant Sharma Vs. ITO, Ward-2(1), Bhilai ITA No.169/RPR/2025 9. In my considered view, the assessee deserves one final opportunity before the Ld. CIT(Appeals)/NFAC to properly represent the facts and if required, the Ld. CIT(Appeals)/NFAC shall also call for a remand report from the A.O to do the ground verification once again, after being appraised of the proper facts by the assessee. Therefore, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand back the matter to its file for denovo adjudication while complying with the principles of natural justice. The assessee is also directed to respond to the hearing notices and represent his case on merits. The Ld. CIT(Appeals)/NFAC shall dispose of the matter within 30 days from receipt of this order.” 5. In view of the aforesaid facts and circumstances, I am of the considered view that since the quantum appeal has been restored to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication, therefore, the present appeal on penalty should also meet the same fate for the sake of completeness regarding adjudication on issues. My aforesaid view in restoring the penalty to the Ld. CIT(Appeals)/NFAC is fortified by the judgment of the Hon’ble Supreme Court in the case of Mohd. Mohatram Farooqui vs. CIT (SC) 2010-TIOL-23-SC-IT wherein it has been held that if addition is restored to the A.O, then penalty should also be restored. Also, the Hon’ble High Court of Delhi in the case of Sanjay Gupta Vs. CIT (2014) 366 ITR 18 (Del) has also held that where the quantum has been remanded to the A.O, the question of penalty on account of the said amount being treated as undisclosed income, should also be remanded to the A.O. In the present case the concerned authority shall be Ld. 5 Shrikant Sharma Vs. ITO, Ward-2(1), Bhilai ITA No.169/RPR/2025 CIT(Appeals)/NFAC since the quantum has been remanded back to its file for denovo adjudication. 6. Accordingly, I set aside the impugned order and restore the matter to the file of the Ld. CIT(Appeals)/NFAC for determining the question of penalty after adjudication on the quantum. 7. As per the above terms grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 21st day of April, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 21st April, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur "