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2020 (3) TMI 537 - AT - Income TaxPenalty u/s 271(1)(c) - Directors could not represent before the first appellate authority as regards the penalty imposed u/s 271(1)(c) - information received from the Excise Authorities, AO issued notice u/s 148 and completed the assessments u/s 143 r.w.s. 147 - On quantum assessments, the appeals were preferred by the assessee before the first appellate authority, who partly allowed the appeals of the assessee - HELD THAT:- The earlier Directors of the assessee-company had resigned on 09.04.2003. After the resignation of the earlier Directors, the Central Excise Department had conducted a search at the premises of the assessee-company on 08.07.2003. The earlier Directors were not associated with the assessee-company’s matters subsequent to their retirement and were not aware of the assessments completed and consequent penalty levied. Being unaware, the ex- Directors did not represent the matters either in quantum proceedings or in penalty proceedings. The present Directors of the assessee-company has faced financial difficulties and labour unrest, and the same is evident from the documents produced before the Tribunal. Consequent to labour unrest and the financial difficulties faced by the present Directors, they also could not represent before the first appellate authority as regards the penalty imposed u/s 271(1)(c) of the I.T.Act. The penalty proceedings initiated are separate from the quantum assessments and if the assessee can prove in penalty proceedings that the additions in the quantum assessments are not warranted, necessarily, the penalty imposed has to be deleted. Since the assessee has not been represented before the first appellate authority with regard to the penalty proceedings, in the interest of justice and equity, we are of the view that as a last chance, the assessee should be granted one more opportunity of being heard. The assessee shall cooperate with the Department and furnish necessary documents and evidences to prove its case. For the above said purpose the issue is restored to the CIT(A) - Appeal allowed for statistical purposes.
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