TMI Blog2005 (4) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... rrying on business of bricks kiln. For the assessment year under reference, the assessee received an amount of Rs. 1,87,786 from Lining Department (Government Department) for bricks to be supplied. Since bricks could not be supplied in the accounting year under reference, the assessee had shown such amount as liability in the balance sheet. The assessment was completed by the AO under s. 144. The AO observed that Government Department would not make an advance payment without receiving the bricks from the assessee. Thus, the AO held that assessee had indeed supplied the bricks and liability shown in the balance sheet was bogus. Accordingly, he made an addition of Rs. 1,87,786 which was upheld in appeal by Tribunal, Amritsar, though the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made before the AO. The learned CIT(A) rejected such submissions and upheld the order of AO by referring to finding recorded by the Tribunal in quantum appeal. The relevant findings recorded by the CIT(A) in last para on p. 2 are as under: "I have given careful consideration to the views expressed by both the sides and do not find any force in the arguments of the learned counsel of the appellant. I have also gone through the order of penalty. It is a factual position that the Hon'ble Tribunal has confirmed the addition of Rs. 1,87,787 made by the AO on account of bogus liability shown in the name of Lining Division, Faridkot. With due deference and regards to the findings of the Hon'ble Tribunal, it is held that the fact remains that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drew our attention to Annexs. II and III submitted before AO along with reply to notice for penalty. He also submitted that these have been reproduced on pp. 1-2 of the penalty order. He submitted that these were totally ignored by the authorities below. He submitted that merely because addition has been made and sustained in appeal does not justify imposition of penalty under s. 271(1)(c). He submitted (that) levy of penalty is not automatic He also relied on the following judgments: (i) Hindustan Steel Ltd vs. State of Orissa (1972) 83 ITR 26 (SC) (ii) CIT vs. Anwar Ali (1970) 76 ITR 696 (SC) (iii) Narainbhai Veerabhai Co. vs. CIT (1993) 109 CTR (Guj) 443 : (1993) 203 ITR 1017 (Guj) (iv) CIT vs. H. Abdul Bakshi Bros (1986) 58 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and evidence in the course of penalty proceedings before levying a penalty. He cannot brush aside such explanation and evidence merely because the addition made by the AO was upheld in appeal. If it were so, the levy of penalty under s. 271(1)(c) would be automatic in all the cases where addition has been sustained in appeal. This is contrary to the letter and spirit of law. Sec. 273B mandates an opportunity to be allowed to the assessee before levying penalty. 8. Now when we see the present case in the light of above legal position that during the course of penalty proceedings, the assessee furnished certificate from the concerned Department that against the amounts received by the assessee no bricks were pending (sic-supplied). Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was not produced during the course of assessment proceedings and the assessment was completed ex parte. Therefore, Tribunal had no occasion to refer to the same and the finding of Tribunal requires to be seen in this context. Taking into account these facts and in the interest of justice, we consider it fair and appropriate to set aside the order of CIT(A) and restore the matter to the file of AO for deciding the same afresh as per law and after allowing reasonable opportunity to assessee for producing evidence from the concerned Department that against such payments bricks were supplied and accounted for in the subsequent period. We order accordingly. The grounds of appeal are allowed for statistical purposes. 9. Now we take up appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us to justify interference with the order of CIT(A). Thus, the order of CIT(A) being fair and reasonable, the same is upheld. The appeal filed by the assessee is dismissed. 14. Now we take up appeal in ITA No. 154/Asr/2000 which relates to sustaining a penalty of Rs. 8,514 under s. 273(1)(b) for assessees failure to furnish statement of advance tax under s. 209A(1)(a). The facts are that the assessee was an existing assessee and AO observed that it failed to furnish statement of advance tax under s. 209A(1)(a). Accordingly, the AO held the assessee in default and imposed penalty of Rs. 8,514 @ 10 per cent. On appeal, the learned CIT(A) upheld the penalty on the ground that assessee did not furnish any plausible explanation or evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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