Referred Sections:
Section 271B
Section 44AB of the Income-tax
Section 251(1)(a) and (b) of I.T. Act
Section 251(2) of I.T. Act
Sections 250(4), 250(5), 251(1)(a), 251(1)(b)
Sections 250 and 251 of I.T. Act.
Referred Cases / Judgments
Commissioner of Income Tax vs. Jai Laxmi Rice Mills reported at (2015) 379 ITR 0521
Shri Ajay Sharma vs. DCIT order dated 27.04.2018
Vishnu Bhagwan vs. DCIT
Pankaj Sharma vs. DCIT, for the proposition that, the Ld. CIT(A)
Ms. Swati Pawa vs. DCIT (2019) 175 ITD 0622 (Delhi-Trib.)
CIT vs. Kanpur Coal Syndicate 53 ITR 225 (SC)
CIT vs. Rai Bahadur Hardutroy Motilal Chamaria 66 ITR 443
CIT vs. B.N. Bhattachargee 118 ITR 461 (SC)
CIT vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133
CIT vs. Jai Laxmi Rice Mills (Supra).
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: `D': NEW DELHI)
BEFORE SHRI K.N. CHARY, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA Nos:- 2531, 2533 and 2535/Del/2016
(Assessment Years: 2009-10, 2010-11 and 2011-12)
Vishnu Bhagwan, Dy. Commissioner of Income
118, Sukhi Mal, Vs. Tax,
Dasna Gate, Central Circle,
Ghaziabad. Ghaziabad.
PAN No: AKEPB0169K
APPELLANT RESPONDENT
ITA Nos:- 2538, 2540/Del/2016
(Assessment Years: 2010-11 and 2011-12)
Pankaj Sharma, Dy. Commissioner of Income
B-74, Vs. Tax,
Gagan Enclave, Central Circle,
Ghaziabad. Ghaziabad.
PAN No: AWYPS9585Q
APPELLANT RESPONDENT
ITA Nos:- 2542/Del/2016 to 2548 /Del/2016
(Assessment Years: 2005-06 to 2011-12)
Manoj Kumar Jain, Dy. Commissioner of Income
R-8/11, Flate No. 700, Vs. Tax,
Raj Nagar, Ghaziabad. Central Circle,
Ghaziabad.
PAN No: ACLPJ4982H
APPELLANT RESPONDENT
Page 1 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
Revenue by : Smt. Naina Soin Kapil, Sr. DR
Assessee by : Shri Kapil Goel, Adv.
CONSOLIDATED ORDER
PER BENCH
(A) In all these cases, the assessees have filed appeals against orders dated
07.03.2016 and 08.03.2016 of Learned Commissioner of Income Tax (Appeals)-IV,
Kanpur, ("Ld. CIT(A)", in short) pertaining to different Assessment Years. In the
aforesaid orders, the Ld. CIT(A) dismissed the assessee's appeals in limine for non-
prosecution of the appeals by the respective assessees. For the sake of convenience
these appeals are hereby disposed off through this Consolidated Order. The grounds of
all these appeals are as under:
ITA No. -2531/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 71,990/- u/s 271B of the Income-
tax Act, 1961 and therefore, penalty order deserves to be annulled.
b. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 71,990/- u/s 271B of the Act and
Page 2 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
failed to observe that assessee was not required to maintain books of
account and in case of non maintenance of books of accounts assessee
cannot be penalized for failure to get accounts audited and therefore
penalty deserves to be cancelled.
c. That Ld. Assessing Officer has erred in law as well as on facts on the
case by imposing the penalty of Rs. 71,990/- u/s 271B of the Act by
wrongly holding that entries recorded in the bank accounts also
partake the character of books of accounts and therefore penalty order
deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 71,990/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2533/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,36,680/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,36,680/- u/s 271B of the Act and
failed to observe that assessee was not required to maintain books of
account and in case of non maintenance of books of accounts assessee
cannot be penalized for failure to get accounts audited and therefore
penalty deserves to be cancelled.
c. That Ld. Assessing Officer has erred in law as well as on facts on the
case by imposing the penalty of Rs. 1,36,680/- u/s 271B of the Act by
wrongly holding that entries recorded in the bank accounts also
Page 3 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
partake the character of books of accounts and therefore penalty order
deserves to be cancelled.
d. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,36,680/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2535/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,09,800/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,09,800/- u/s 271B of the Act and
failed to observe that assessee was not required to maintain books of
account and in case of non maintenance of books of accounts assessee
cannot be penalized for failure to get accounts audited and therefore
penalty deserves to be cancelled.
c. That Ld. Assessing Officer has erred in law as well as on facts on the
case by imposing the penalty of Rs. 1,09,800/- u/s 271B of the Act by
wrongly holding that entries recorded in the bank accounts also
Page 4 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
partake the character of books of accounts and therefore penalty order
deserves to be cancelled.
d. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,09,800/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2538/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the Act and
failed to observe that assessee was not required to maintain books of
account and in case of non maintenance of books of accounts assessee
cannot be penalized for failure to get accounts audited and therefore
penalty deserves to be cancelled.
c. That Ld. Assessing Officer has erred in law as well as on facts on the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the Act by
wrongly holding that entries recorded in the bank accounts also
partake the character of books of accounts and therefore penalty order
deserves to be cancelled.
Page 5 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
d. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2540/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the Act and
failed to observe that assessee was not required to maintain books of
account and in case of non maintenance of books of accounts assessee
cannot be penalized for failure to get accounts audited and therefore
penalty deserves to be cancelled.
c. That Ld. Assessing Officer has erred in law as well as on facts on the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the Act by
wrongly holding that entries recorded in the bank accounts also
partake the character of books of accounts and therefore penalty order
deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
Page 6 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2542/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
Page 7 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
ITA No. -2543/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2544/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
Page 8 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2545/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Page 9 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2546/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
Page 10 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2547/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
c. That without prejudice to above, it is well settled law that penalty law
is prospective law and in the year under appeal amount of maximum
penalty imposable was Rs. 1 Lac and amendment in section 271B of
the Act revising the penalty amount from Rs. 1 Lac to Rs. 1.50 Lac
Page 11 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
came into effect from A.Y. 2011-12, hence penalty imposed at Rs. 1.50
Lac in the year under appeal is contrary to the provision of income-tax
act and therefore, penalty order deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
ITA No. -2548/Del/2016
"1. That the Ld. CIT(A)-IV, Kanpur has erred in law and on facts in dismissing the
appeal of the appellant in limine for non attendance by the appellant.
2. That the Ld. CIT(A)-IV Kanpur had no power to dismiss the appeal is limine
for non attendance by the appellant in the facts of circumstances of the case.
3. Various observations made by the Ld. CIT(A)-IV Kanpur in the appellate order
either incorrect or are legally untenable.
4. That Ld. CIT(A)-IV Kanpur was duty bound to adjudicate the following
grounds as specifically raised before him:-
a. That Ld. Assessing Officer has erred in law as well as on facts of the
case by imposing the penalty of Rs. 1,50,000/- u/s 271B of the
Income-tax Act, 1961 and therefore, penalty order deserves to be
annulled.
b. That Ld. Assessing Officer was clearly wrong in imposing a penalty on
the assessee u/s 271B of the Act as the appellant duly complied with
the provision of section 44AB of the Income-tax and without
appreciating the facts in proper manner the Ld. Assessing Officer
passed penalty order u/s 271B of the Act and, therefore, penalty order
deserves to be cancelled.
5. That it was not a fit case for levy of penalty of Rs. 1,50,000/- under section
271B which deserves to be deleted.
6. That the Appellant reserves his right to add, amend/modify the grounds of
appeal."
(B) At the time of hearing before us, the Ld. Counsel for assessee submitted that the
Ld. CIT(A) did not decide assessee's appeals on merits. He further submitted that the
Page 12 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
Assessment Orders have been quashed by separate order dated 31.03.2015, in the case
of Shri Manoj Kumar Jain passed by Ld. CIT(A), Gaziabad. He also submitted that the
Assessment Orders have been quashed by Income Tax Appellate Tribunal ("ITAT" for
short) vide order dated 08.02.2019 in the case of Shri Pankaj Sharma. The Ld. Counsel
for assessee also referred to the order of Hon'ble Supreme Court of India, in the case of
Commissioner of Income Tax vs. Jai Laxmi Rice Mills reported at (2015) 379 ITR 0521
(SC). The Ld. Counsel for assessee filed a copy of order of Co-ordinate Bench of ITAT,
Delhi, in the case of Shri Ajay Sharma vs. DCIT order dated 27.04.2018 for the
proposition that, the Ld. CIT(A) should have disposed off the appeals on merit. One of
us (Ld. Judicial Member) is a party to the aforesaid order dated 27.04.2018 in the case
of Shri Ajay Sharma. The Ld. Counsel for assessee also filed a copy of consolidated
order dated 01/06/2018 of Co-ordinate Bench of ITAT, Delhi, in the cases of Vishnu
Bhagwan vs. DCIT and Pankaj Sharma vs. DCIT, for the proposition that, the Ld. CIT(A)
is required to pass orders on merits giving reasons for his decision in the appellate
order. On the other hand, the Ld. Departmental Representative ("DR", for short)
submitted that adverse view should be taken against the assessees because the
assessees did not appear before the Ld. CIT(A).
(C) We have heard both sides attentively and we have also perused the materials
available on record carefully. We have also considered judicial precedents brought to
our notice or referred to in the records of the ITAT. We are aware of the decision in
the case of Ms. Swati Pawa vs. DCIT (2019) 175 ITD 0622 (Delhi-Trib.) / (2019) 55
Page 13 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
CCH 0512 DelTrib / [2019] 103 taxmann.com 300 (Delhirib.) in which, on the similar
issue, it was held as under:
"(4.1) A perusal of the above provisions of law shows that U/s 250(6) of I.T. Act
the Ld. CIT(A) was obliged to dispose of the appeal in writing after stating the
points for determination and to then pass an order on each of the points which
arose for consideration; and the Ld. CIT(A) was further obliged to state the
reasons for her decision on each such points which arose for determination. The
Ld. CIT(A) is duty bound to dispose of the appeal through a speaking
order on merits, on all the points which arose for determination in the
appellate proceedings, including on all the grounds of appeal. Moreover,
the perusal of Section 251(1)(a) and (b) of I.T. Act and the further perusal of
Explanation of Section 251(2) of I.T. Act shows that the Ld. CIT(A) is required
to apply her mind to all the issues which arise from the impugned order
before her, whether or not these issues have been raised by the
Assessee before her. If the order of Ld. CIT(A) on merits is a summary
order; as we have held in foregoing paragraph (3) of this order; it amounts to
non-application of mind. This non-application of mind is a
contravention of statutory role of Ld. CIT(A) U/s 251(2) of I.T. Act.
Also, Section 251(1)(a) of I.T. Act provides that while disposing of an appeal
against Assessment Order, Commissioner (Appeals) shall have the power to
confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1)
(b) provides that in disposing of an appeal against an order imposing a penalty,
Commissioner (Appeals) may confirm or cancel such orders or vary it so as to
either to enhance or to reduce the penalty. If the order of the Ld. CIT(A) on
merits is a summary order; as we have held in the foregoing paragraph
(3) of this order; it amounts to non-application of mind to the
possibilities of reducing / enhancing / annulling the assessment, or
cancelling / varying the penalty, as the case may be. This non-
applications of mind is a contravention of statutory role of Ld. CIT(A)
U/s 251(1)(a) or 251(1)(b) of I.T. Act, as the case may be. On
cumulative consideration of the provisions U/s 250(6) read with sections 250(4),
250(5), 251(1)(a), 251(1)(b) and Explanation of Section 251(2) of I.T. Act , we
come to the conclusion that the Ld. CIT(A) is not empowered to dismiss
the appeal for non-prosecution of appeal and is obliged to dispose of
the appeal on merits.
(4.2) Once the Assessee files an appeal U/s 246A of I.T. Act, the
Assessee sets in motion the machinery designed for disposal of the
appeal under Sections 250 and 251 of I.T. Act. If the appeal filed by
the assessee fulfils the requirements of maintainability and
admissibility prescribed under Sections 246, 246A, 248 and 249 of I.T.
Act; neither the Assessee can stop the further working of that
Page 14 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
machinery as a matter of right, by withdrawing the appeal, or by not
pressing the appeal, or by non-prosecution of the appeal; nor the first
appellate authority, CIT(A) in this case, can halt this machinery by
ignoring either the procedure in appeal prescribed U/s 250 of I.T. Act
or powers of Commissioner (Appeals) prescribed U/s 251 of I.T Act.
CIT(A). The first appellate authority cannot dismiss assessee's appeal
on merits, in a summary manner, without deciding the appeal on
merits through an order in writing, stating the points of determination
in the appeal, the decision thereon and the reason for the decision. It is
well-settled that powers of Ld. CIT(A) are co-terminus with powers of the
Assessing Officer. Useful reference ma be made to order of Apex Court
decision in CIT vs. Kanpur Coal Syndicate 53 ITR 225 (SC) in which it was
held that AAC has plenary powers in disposing off an appeal; that the scope of
his power is co-terminus with that of the ITO, that he can do what the ITO can
do and also direct him to do what he failed to do. In this context, useful
reference may also be made to Apex Court's decisions in the cases of CIT vs.
Rai Bahadur Hardutroy Motilal Chamaria 66 ITR 443 and CIT vs. B.N.
Bhattachargee 118 ITR 461 (SC) for the proposition that an assessee having
once filed an appeal, cannot withdraw it and even if the assessee refuses to
appear at the hearing, the first appellate authority can proceed with the enquiry
and if he finds that there has been an under-assessment, he can enhance the
assessment. Just as, once the assessment proceedings are set in
motion, it is not open to the Assessing Officer to not complete the
Assessment Proceedings by allowing the Assessee to withdraw Return
of Income; it is similarly, by analogy, not open for Ld. CIT(A) to not
pass order on merits on account of non-prosecution of appeal by the
Assessee or if the Assessee seeks to withdraw the appeal or if the
assessee does not press the appeal. When the Commissioner (Appeals)
dismisses the appeal of assessee for non-prosecution of appeal by the assessee;
in effect, indirectly it leads to same results as withdrawal of appeal by assessee.
When the assessee is not permitted to withdraw the appeal filed before
the first appellate authority, the first appellate authority is duty bound
to not allow a situation to arise, through dismissal of appeal in a
summary manner; in which, in effect, indirectly the same results are
obtained as arise from withdrawal of appeal by the assessee. What
cannot be permitted in law to be done directly, cannot be permitted to
be done indirectly either. In view of the foregoing discussion; and on careful
perusal of Section 250(6) r.w.s. 250(4), 250(5), 251(1)(a), 251(1)(b) and
Explanation to Section 251(2) of I.T. Act; it is amply clear that Ld. CIT(A) has no
power to dismiss appeal in limine for non-prosecution of appeal by the assessee.
We draw support from order of Hon'ble Bombay High Court in the case of CIT
vs. Premkumar Arjundas Luthra (HUF) [2016] 240 taxman 133 for the
propositions that Ld. CIT(A) is required to apply his mind to all issues which arise
from impugned order before him whether or not same had been raised by
Page 15 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
appellant before him; and that CIT(A) is obliged to dispose of the appeal on
merits. In this case, it was held as under:
"8...... it is very clear once an appeal is preferred before the CIT(A), then in disposing of
the appeal, he is obliged to make such further inquiry that he thinks fit or direct the
Assessing Officer to make further inquiry and report the result of the same to him as
found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A)
to dispose of an appeal in writing after stating the points for determination and then
render a decision on each of the points which arise for consideration with reasons in
support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the
CIT(A) would have the power to confirm, reduce, enhance or annul an assessment
and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also
makes it clear that while considering the appeal, the CIT(A) would be entitled to
consider and decide any issue arising in the proceedings before him in appeal filed for
its consideration, even if the issue is not raised by the appellant in its appeal before the
CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not
open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged
to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of
the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing
Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that
the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do
all that Assessing Officer could do. Therefore just as it is not open to the Assessing
Officer to not complete the assessment by allowing the assessee to withdraw its return
of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to
dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is
amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the
Act which requires the CIT(A) to apply his mind to all the issues which arise from the
impugned order before him whether or not the same has been raised by the appellant
before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for
non-prosecution as is evident from the provisions of the Act."
(5) Whether the assessee attended the appellate proceedings
before the Ld. CIT(A), or not; whether the assessee complied with the
notices of the Ld. CIT(A)or not; whether the assessee participated in
the appellate proceedings before the Ld. CIT(A) or not; whether the
assessee complied with the directions of the Ld. CIT(A) or not;
provisions of Section 250(6) and Section 251 of I.T. Act continue to
have application; and the Ld. CIT(A) cannot disregard her statutory
role under these provisions. Thus, the discussion in the foregoing
paragraphs (4), (4.1) and (4.2) of this order have relevance even in a case,
like the case before us, in which the assessee neither attended the hearings
before the Ld. CIT(A) nor filed written submissions before the Ld. CIT(A) and
showed indifferent approach, leading the Ld. CIT(A) to pass ex-parte order on
the ground of non-appearance of the appellant."
Page 16 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
(C.1) Following the aforesaid precedents in the cases of Shri Ajay Sharma (Supra), Shri
Vishnu Bhagwan (Supra), Shri Pankaj Sharma (Supra) and Ms. Swati Pawa (Supra); we
set aside the orders of the Ld. CIT(A) and remand the issues in dispute to the Ld.
CIT(A) for fresh orders on merits. The Ld. CIT(A) is directed to consider aforesaid
order dated 08.02.2019 in the case of Pankaj Sharma and order dated 31.03.2015 in
the case of Manoj Kumar Jain and in the case of CIT vs. Jai Laxmi Rice Mills (Supra).
The Ld. CIT(A) is also directed to provide opportunity of being heard to the assessee
and to also, opportunity make submissions, before he passes the fresh orders.
(D) For statistical purposes all the appeals are treated as partly allowed. The order
was already pronounced orally in the open court on 04.06.2019 after conclusion of the
hearing.
Sd/- Sd/-
(K.N. CHARY) (ANADEE NATH MISSHRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 04.06.2019
Pooja/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
Page 17 of 18
ITA No.2531/Del/2016 and other appeals.
Sh. Vishnu Bhagwan, Sh. Pankaj Sharma and Sh. Manoj Kumar Jain
Date of dictation
Date on which the typed draft is placed before the
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr.
PS/PS
Date on which the final order is uploaded on the
website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
Page 18 of 18
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