2019 (4) TMI 1434 - AT - Income Tax

Tribunal upholds penalty for lack of active engagement in appeal process.

The Tribunal dismissed the Assessee's appeal challenging the penalty imposed under section 271(1)(c) of the Income Tax Act for the Assessment Year ... Non prosecution of appeal - Levy of penalty u/s 271(1)(c) - assessee filed return of income declaring loss - A.O. made addition on account of unexplained cash credit - HELD THAT:- The assessee has been notified the date of hearing through registered post. However, none appeared on behalf of the assessee at the time of hearing of the appeal. Assessee is no more interested in prosecuting the appeal. Therefore, the appeal of the assessee is liable to be dismissed as un-admitted. Having regard to Rule 19(2) of Income Tax Appellate Tribunal Rules and following various decisions of Delhi Bench of the Tribunal including that of Multiplan India Ltd., [1991 (5) TMI 120 - ITAT DELHI-D]; Estate of Late Tukojirao Holkar vs. CWT [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] and CIT vs. B. Bhattachargee & Another [1979 (5) TMI 4 - SUPREME COURT] wherein held that “the appeal does not mean, mere filing of the memo of appeal but effectively pursuing the same”. In view of the above, respectfully following the aforecited decisions, we dismiss the appeal of the assessee as un-admitted. Issues:Challenging the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961.Analysis:The appeal was filed by the Assessee against the Order of the Ld. CIT(A)-1, New Delhi, challenging the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2005-2006. The Assessing Officer (A.O.) noted that the Assessee had initially declared a loss of &8377; 9,69,924/- but made an addition of &8377; 10 lakhs due to unexplained cash credit, resulting in a total taxable income of &8377; 30,076/-. Subsequently, the penalty was initiated at the penalty stage, and notices were issued to the Assessee. However, the Assessee did not respond to any of the notices. Consequently, the A.O. levied the penalty under section 271(1)(c) of the Income Tax Act, a decision that was upheld by the Ld. CIT(A).The Assessee was duly notified of the hearing date through registered post, but no representation was made on behalf of the Assessee during the appeal hearing. The Tribunal observed that the Assessee's lack of participation indicated a lack of interest in pursuing the appeal. Citing Rule 19(2) of the Income Tax Appellate Tribunal Rules and referring to various decisions, including those of the Delhi Bench of the Tribunal and the Supreme Court, the Tribunal concluded that merely filing an appeal memo does not suffice; effective pursuit of the appeal is essential. Consequently, the Tribunal dismissed the Assessee's appeal as un-admitted, in line with the aforementioned legal precedents.In conclusion, the Tribunal dismissed the appeal of the Assessee, emphasizing the importance of actively pursuing the appeal rather than solely filing the appeal memo. The decision was pronounced in the open court, and the appeal was ultimately dismissed.