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2016 (7) TMI 839 - AT - Income TaxPenalty u/s 271(1)(c) - assessee donated to three charitable institutions and claimed exemption u/s 35AC - non opportunity to the assessee for cross examination - essee-company was in the process of winding up - Held that:- It needs to be clarified who is looking after the affairs of the assessee-company on day today basis at the relevant point of time. Whether Shri Balasubramanian or Shri Vijaysadarangani was looking after the affairs of the assessee-company at the relevant point of time. If Shri Balasubramanian was looking after the affairs of the assessee-company, then it has to be clarified whether the enquiry report filed by the Income Tax Inspector and the communication said to be received by the Dy. Commissioner of Income Tax, Chennai from the Dy. Director of Income Tax(Investigation), Jamshedpur, was communicated to the assessee. The assessee claims before this Tribunal that no opportunity was given to it to cross examine the Secretary and Treasurer of the Trust who denied the receipt of money. This Tribunal is of the considered opinion that when the Assessing Officer examined the Secretary and Treasurer of the Trust, an opportunity shall be given to the assessee to cross examine them to find out whether actually the Trust received the money or not. It is also necessary to find out who actually opened the bank account in Axis Bank at Kolkata and operated the same. If the trustees of the so called three Trusts opened the bank account in the name of some other persons with connivance of the officials of Axis Bank, the Assessing Officer has to find out what kind of action was taken against the Axis Bank officials and the trustees who are responsible for opening the bank account. Since these details are not available on record, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. Coming to the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act, as observed earlier, the assessee was not given any opportunity to cross examine the Secretary and Treasurer of the Trust. Admittedly, as observed earlier, the Secretary and the Treasurer of the Trust were examined and the copies of the statement was not furnished to the assessee and what was available on record is only enquiry report and the letter said to be received by the Dy. Commissioner of Income Tax, Chennai, from Dy. Director of Income Tax (Investigation), Jamshedpur. In those circumstances, penalty being different and distinct from assessment proceedings, the Assessing Officer ought to have given an opportunity to the assessee to cross examine the Secretary and Treasurer of the so called Trust. Since such an opportunity was not given, the matter needs to be reconsidered by the Assessing Officer by giving an opportunity to the assessee for cross examination. - Decided in favour of assessee for statistical purposes.
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