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2018 (12) TMI 313 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - non-appearance of the Assessee - no proper serving of notice - Held that:- The import of Explanation 1 to s. 271(1)(c), deeming a concealment of particulars of income when the assessee is unable to furnish an explanation or furnishes one which is found to be false or is unsubstantiated, which is applicable in respect of any facts material to the computation of income, i.e., irrespective of whether the default prima facie is for furnishing inaccurate particulars of income or concealment of particulars of income, may also have a bearing in the matter. As indicated by the Bench during hearing, considered proper that the matter be decided by the first appellate authority while considering the assessee’s appeal, which also remains to be decided by him on quantum. Under the circumstances, it may not be proper for the tribunal to proceed to decide the appeal on penalty on merits, and explains the disinclination of the tribunal to decide the penalty on merits.[Accountant Member decision] As per judicial member Judicial Member in both the appeals, the Ld. CIT(A) has passed the order ex- parte and not on merit. The stand of the assessee was that the notices for the hearing have been sent to the Kathua address where the assessee was doing work, had already been closed, however, the notices were never been served at Delhi address which is specifically mentioned by the assessee in Form No.35. The assessee has also filed an affidavit in support of its contention. The Bench even verified the appellate record of the Ld. CIT(A) and found that the notices were never been sent/served at Delhi address which is mentioned in Form No.35. As proper notices have not been served to the assessee, therefore, the assessee did not get reasonable and proper opportunities of being heard and even otherwise the Ld. CIT(A) did not pass the orders on merit, hence, proper course would be to set aside the cases to the files of the Ld. CIT(A) to decide afresh while affording reasonable and proper opportunities of being heard to the assessee. Hence ordered accordingly. Assessee's appeals allowed for statistical purposes.
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