2004 (6) TMI 241

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.... 1989, from Union Bank of India, Adampur. Another addition of Rs. 18,500 was also made by the AO on account of loan raised from Shri Harinder Singh. The assessee went in appeal before the CIT(A) against the order of the AO, who deleted the amount of Rs. 18,500 and sustained the addition made by the AO amounting to Rs. 1,35,000 on which AO has imposed penalty of Rs. 61,470 which is equivalent to 100 per cent of the tax sought to be evaded. 3. The assessee took up the matter in appeal and it was contended before the first appellate authority that the AO has not allowed any opportunity to the assessee to prove that she had not concealed any particulars of income while filing the return. It was pointed out that the reply filed by the assesse....

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....in the office of the AO on 22nd April, 1991, and which is available on the assessment records. Thereafter, another notice was issued by the AO on 12th Aug., 1991, which was also an opportunity under s. 129 as the AO has changed and Shri P.L. Malhotra had taken over the charge of ITO, Ward 2(3). The assessee again filed reply dt. 20th April, 1991, which was received in the office of the AO on 22nd Aug., 1991, and which is available on record. Thereafter, no further proceedings were carried out by the AO till the penalty order dt. 31st Jan., 1995, was issued by Shri R.S. Chauhan, ITO, Ward. 2(3), Jalandhar. There is nothing on record that Shri R.S. Chauhan has issued any fresh notice to the assessee before levy of penalty. There is no mention....

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....dharan (1991) 190 ITR 604 (Ker) which supported the view taken by the learned CIT(A). 6. Having heard both the sides and considering the material on record in the light of the precedent relied upon, I find that the AO has passed order imposing the penalty of Rs. 61,470 under s. 271(1)(c) wholly on the basis of sustenance of addition by the learned CIT(A) with respect to Rs. 1,35,000 without establishing the charge of concealment against the assessee and even the detailed reply made and found by the learned CIT(A) on records of the AO has neither been considered nor discussed in the penalty order. Therefore, in my considered view, such order is not sustainable in the eyes of law but so far as the deletion of penalty on the ground that the....