INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Validity - Assessee not represented before CIT(A) with regard to penalty proceedings -

Assessee was a private limited company engaged in manufacture and sale of decorative veneer, commercial plywood etc. Based on information received from Central Excise Department assessee was alleged to be indulged in under-invoicing of sales and realizing differential amount in cash. On quantum assessments, CIT(A) partly allowed appeals of assessee. Thereafter, AO imposed penalty under section 271(1)(c). Held: Consequent to labour unrest and the financial difficulties faced by Directors, they also could not represent before CIT(A) as regards penalty imposed under section 271(1)(c). Penalty proceedings initiated are separate from the quantum assessments and if assessee can prove in penalty proceedings that additions in quantum assessments are not warranted, necessarily, penalty imposed has to be deleted. Since assessee was not represented before CIT(A) with regard to penalty proceedings, in interest of justice and equity, as a last chance, assessee was granted one more opportunity of being heard. Issue was restored to CIT(A).

REFERRED :

FAVOUR : In assessee's favour by way of remand

A.Y. :

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