The Agra Bench of Income Tax Appellate Tribunal(ITAT) restored the penalty for concealment of income related to quantum additions to the Commissioner of Income Tax (Appeals) [CIT(A)] for fresh adjudication.
Devendra Kumar Dubey,appellant-assessee,filed his income tax return for the assessment year 2015-16 on March 23, 2017, declaring a total income of ₹2,94,410. The case was selected for limited scrutiny to verify the source of cash deposits. Despite being issued statutory notices under Sections 143(2) and 142(1), there was no response. A show cause notice under Section 144 also went unanswered.
The Assessing Officer (AO) passed an ex-parte order under Section 144 on December 1, 2017, adding ₹2,61,740 to the income, which included ₹70,000 for unexplained cash deposits and ₹1,91,740 for unverified cash in hand, treating the amounts as income from undisclosed sources.
Law and Procedure for Filing of Appeals
The assessee’s appeal against these additions was dismissed by the CIT(A) on December 14, 2018. The AO also imposed a penalty of ₹34,803 under Section 271(1)(c) for concealment of income, which was upheld by the CIT(A) on February 10, 2023.
Meanwhile, the ITAT, in a separate appeal, set aside the quantum additions on September 20, 2021, directing the CIT(A) to reconsider the matter after admitting additional evidence. The appellant, in the current appeal before the ITAT, requested that the penalty matter also be sent back to the CIT(A) for fresh adjudication, as it was tied to the pending quantum proceedings.
A single member bench comprising Ramit Kochar(Accountant Member) observed that the quantum additions had already been set aside and sent back to the CIT(A) for fresh adjudication, with instructions to admit additional evidence and provide the appellant an opportunity to present their case.
It further noted that the CIT(A) had dismissed the penalty appeal without considering the tribunal’s earlier order regarding the quantum additions. To ensure fairness, the appellate tribunal restored the penalty appeal to the CIT(A) for fresh adjudication, directing the CIT(A) to consider the revised order on quantum additions and give both parties a proper opportunity to be heard. No comments were made on the merits of the case.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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