Penalty Imposed u/s 271(1)(c) of IT Act for Commission Payment without Proper Hearing: ITAT directs Re-adjudication [Read Order]

The Jaipur bench of Income Tax Appellate Tribunal (ITAT) directed the matter back to the assessing officer for re-adjudication for penalty imposed under Section 271(1)(c) of the Income Tax Act 1961for the payment of commission without proper hearing of the parties.

Shri Yogendra Khandelwal, the appellant assessee was a  proprietor of M/s. Steel Syndicate of India which was engaged in the business of trading of iron and steel materials and also engaged in wind power generation at Jaisalmer.

The assessing officer disallowed the commission paid and added it to the income of the assessee and initiated penalty proceedings for concealment and furnishing inaccurate particulars of income and the Commissioner of Income Tax (Appeals) confirmed the penalty levied under Section 271(1)(c) of the Income Tax Act 1961. Thus the assessee appealed against the order passed by the commissioner.

During the course of hearing, none appeared on behalf of the assessee to contest the case before the Bench and Mrs. Monisha Choudhary was appeared for the revenue department.

The counsel for the department strongly supported the order passed by the Commissioner of Income Tax (Appeals).

The Bench noted that the Commissioner had passed an ex-parte order without providing adequate opportunity of being heard to the parties. It was also observed that the assessee should be provided one more opportunity to contest his case before the assessing officer as the assessee could not advance his arguments as to the penalty imposed  under Section 271(1)(c) of the Income Tax Act, 1961.

The two member bench comprising of Shri Sandeep Gosain (Judicial Member) And Shri Rathod Kamlesh Jayantbhai (Accountant Member) held that the matter was restored to assessing officer to decide it afresh while allowing the appeal.

To Read the full text of the Order CLICK HERE

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