Income Tax Appellate Tribunal - Amritsar
Ito vs Smt. Neeta Rani on 28 June, 2004
Equivalent citations: (2004)91TTJ(ASR)1119
ORDER
U.B.S. Bedi, J.M.:
This appeal of the department is directed against the order passed by the learned Commissioner (Appeals), Jalandhar, dated 18-12-1998, relevant to the assessment year 1990-91, whereby deletion of penalty of Rs. 61,470 imposed by the assessing officer under section 271(l)(c) has been challenged.
2. The facts indicate that assessment in this case was made at Rs. 1,76,310 vide order under section 143(3), dated 27-3-1991.The assessing officer made the addition of Rs. 1,35,000 on account of drafts purchased by the assessee on 24-9-1989, from Union Bank of India, Adampur. Another addition of Rs. 18,500 was also made by the assessing officer on account of loan raised from Shri Harinder Singh. The assessee went in appeal before the Commissioner (Appeals) against the order of the assessing officer, who deleted the amount of Rs. 18,500 and sustained the addition made by the assessing officer amounting to Rs. 1,35,000 on which assessing officer has imposed penalty of Rs. 61,470 which is equivalent to 100 per cent of the tax sought to be evaded.
3. The assessee took up the matter in appeal and it was contended before the first appellate authority that the assessing officer has not allowed any opportunity to the assessee to prove that she had not concealed any particulars of income while filing the return. It was pointed out that the reply filed by the assessee was also not considered by the assessing officer before imposing the penalty. Further, reliance was made on the decision of the Hon'ble Supreme Court in the case of Jain Brothers v. UOI (1970) 77 ITR 107 (SC) and in the case of CIT v. Anwar Ali (1970) 76 ITR 696 (SC). It was next pointed out that the assessee had purchased a draft of Rs. 1,35,000 on 24-9-1989, from Union Bank of India and that the asseesee has prepared a statement of assets and liabilities at the close of the financial year. It was also pointed out that the assessee has raised a loan of Rs. 85,000 from Union Bank of India and loan of Rs. 18,500 from one Shri Harinder Singh and that these were ignored by the assessing officer, while passing the penalty order.
4. The learned Commissioner (Appeals) while considering and accepting the plea of the assessee has concluded to delete the entire penalty as per para 1.3 of his order which is reproduced as under :
"1.3 I have considered the arguments of learned Authorised Representative and I have also perused the assessment records made available by the assessing officer. It is seen that the assessment was finalised by Shri Rattan Singh, the then Income Tax Officer, Ward 2(3), on 27-1-1991. The assessing officer had made an addition of Rs. 1,35,000 representing investment for purchase of a bank draft and Rs. 18,500 representing loan from Shri Harinder Singh. The assessing officer initiated penalty proceedings under section 271(l)(c) of the Income Tax Act. The assesseo filed reply to show-cause notice as per letter dated 20-4-1991, which was received in the office of the assessing officer on 22-4-1991, and which is available on the assessment records. Thereafter, another notice was issued by the assessing officer on 12-8-1991, which was also an opportunity under section 129 as the assessing officer has changed and Shri P.L. Malhotra had taken over the charge of Income Tax Officer, Ward 2(3). The assessee again filed reply dated 20-4-1991, which was received in the office of the assessing officer on 22-8-1991, and which is available on record. Thereafter, no further proceedings were carried out by the assessing officer till the penalty order dated 31-1-1995, was issued by Shri R.S. Chauhan, Income Tax Officer, Ward. 2(3), Jalandhar. There is nothing on record that Shri R.S. Chauhan has issued any fres notice to the assessee before levy of penalty. There is no mention of any such notice in the penalty order as well. In view of this, I agree with the contention of the learned Authorised Representative that penalty has been imposed by the assessing officer without giving opportunity of being heard. It is also seen that the reply filed by the assessee dated 20-4-1991, was als6 not considered by the assessing officer imposing the penalty. In view of this, penalty of Rs. 61,470 imposed by the assessing officer cannot be sustained and is deleted."
5. Aggrieved by this order of the learned Commissioner (Appeals), the department is in appeal and while relying upon the order of the assessing officer, it was pleaded for setting aside the impugned order and restoring that of the assessing officer, whereas the learned counsel for the assessee submitted that the assessing officer has levied the penalty without issuing any notice when there was a change of incumbent and moreover reply filed by the assessee in response to the show-cause notice, and while letter dated 20-4-1991, which was received in the office of the assessing officer on 22-4-1991, was not considered and the assessing officer has simply imposed the penalty on the ground that addition made while passing assessment order has been confirmed by the learned Commissioner (Appeals). Therefore, the order. of penalty being cryptic order and having no basis has rightly been deleted by the Commissioner (Appeals) though on the ground of not giving opportunity of being heard but, even otherwise, such order is not sustainable, and it was thus urged for confirmation of the impugned order. Reliance was also placed on the decision in CIT v. M. Sreedharan (1991) 190 ITR 604 (Ker) which supported the view taken by the learned Commissioner (Appeals).
6. Having heard both the sides and considering the material on record in the light of the precedent relied upon, I find that the assessing officer has passed order imposing the penalty of Rs. 61,470 under section 271(l)(c) wholly on the basis of sustenance of addition by the learned Commissioner (Appeals) with respect to Rs. 1,35,000 without establishing the charge of concealment against the assessee an even the detailed reply made and found by the learned Commissioner (Appeals) on records of the assessing officer has neither been considered nor discussed in the penalty order. Therefore,, in my considered view, such order is not sustainable in the eyes of law but so far as the deletion of penalty on the ground that the succeeding officer has not given opportunity to the assessee before imposing the penalty is concerned, I do not agree with such view of the learned Commissioner (Appeals) in view of the fact that earlier incumbent has issued proper notice in response to which the assessee has also filed detailed reply, therefore, there was no requirement for issuing further notice by the succeeding officer and my view finds support from the decision of the Hon'ble Supreme Court in the case of CWT v. Smt. Azizunnisa Begum (2000) 163 CTR (SC) 553. As such, I uphold the conclusion in deletion of penalty,.though on different grounds and dismiss the appeal of the revenue.
7. As a result, the appeal of the revenue gets dismissed.