Assessee having right to contest levy of penalty apart from the findings recorded in the assessesment order

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH ‘A’ NEW DELHI

BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER

AND

SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

ITA NO.3943/DEL/2011

ASSTT. YEAR: 2005-06

Shri A.S. Bindra,

80, Hardwar Road, Circle 2, Dehradun.

Dehradun.

(Appellant)

Vs

 Asstt. Commissioner of Income Tax,

(PAN/GIR No.ABGPB1415R)

 (Respondent)

Appellant by: Shri Ashwani Kumar

Respondent by: Shri Srujani Mohanty, Sr. DR

O R D E R

PER I.P. BANSAL, J.M.

This appeal filed by the assessee is directed against the order passed by the CIT(A) dated 2nd June, 2011 for Asstt. Year 2005-06. The grounds of appeal read as under:

“That order passed u/s 250(6) of the Income Tax Act, 1961 by the ld. CIT(A)-II, Dehradun is against law and facts on the file inasmuch as he was not justified to arbitrarily uphold levy of penalty u/s 271(1)(c) at Rs.50,000/-.”

2. The impugned assessment was framed vide order dated 12.12.2008 passed under section 143(3) r/w section 148 of the Act. Information from AIR was received, on the basis of which it was found that there were credit card transactions of Rs. 9,26,686/- through the credit card of the assessee. The assessee was required to explain the same. The assessee expressed his inability to get the details of the Standard Chartered Bank credit card transactions for the relevant period and the bank details as the payments were old and relevant records were not traceable. Thus, the addition was made on that account and on which the penalty has been levied.

3. Learned AR of the assessee has produced before us additional evidence vide which he has claimed that all these payments being through account payee cheques were made through M/s Hi-Tech Livestock Co. Ltd. and all the payments are made through UTI Bank. He has produced before us a copy of the account of the assessee with M/s Hi-Tech Livestock Co. Ltd., Chandigarh in which all the payments of Rs. 1,37,042/- were made through account payee cheques as credit card payments. He submitted that at the time of assessment, the assessee did not have proper details and, therefore, this evidence could not be produced. He submitted that the evidence submitted will go to the root of the matter and it will be a case where even no addition could be made. Therefore, there is no question of levy of penalty. He submitted that for verification this evidence may be sent to the file of the AO.

4. On the other hand, ld. DR has relied upon the order of the AO and the CIT(A).

5. We have carefully perused the material available on record. We admit the aforementioned evidence as the same will go to the root of the matter as it is a case of concealment penalty. Further, in the assessment order, it has been mentioned that due to non-availability of evidence, the assessee has offered this amount as his income. That fact cannot go against the assessee in penalty proceedings as the assessee will be having right to contest the levy of penalty independently, apart from the findings recorded in the assessment order. Therefore, the relevant evidence is admitted as additional evidence and the matter is restored back to the file of the AO for readjudication of the penalty proceedings after due consideration of the evidence being placed by the assessee on record. After giving a reasonable opportunity of hearing to the assessee and placing evidence on record, the AO will re-adjudicate the issue of levy of penalty or otherwise in accordance with law. We direct accordingly.

6. For statistical purposes, this appeal filed by the assessee is treated as allowed in the aforesaid manner.

Order pronounced in the open court during the course of hearing on 12.12.2011.

                 Sd/-                                                                                                 Sd/-

    (SHAMIM YAHYA )                                                                      (I.P. BANSAL)

ACCOUNTANT MEMBER                                                           JUDICIAL MEMBER

DT. 12th DECEMBER, 2011

‘GS’

Copy forwarded to:

1. Shri A.S. Bindra, Dehradun.

2. ACIT, Cir.-2, Dehradun.

3. CIT(A)-II, Dehradun.

4. CIT

5. DR

                                                                                                                                          By Order

 Dy. Registrar