Appeal Against Addition and Penalty Due to Non-Compliance – Burr Brown India Ltd vs ACIT Central Circle-18, New Delhi

Case Summary: Burr Brown India Ltd vs ACIT Central Circle-18, New Delhi

Case Number: ITA 6058/DEL/2019
Appellant: Burr Brown India Ltd, Sultanpur
Respondent: Assistant Commissioner of Income Tax (ACIT), Central Circle-18, New Delhi
Assessment Year: 2001-02
Case Filed On: 16th July 2019
Order Type: Final Tribunal Order
Date of Order: 28th September 2022
Pronounced On: 28th September 2022

Introduction

The case of Burr Brown India Ltd vs ACIT Central Circle-18, New Delhi, pertains to an appeal filed by the appellant challenging the assessment and penalty orders for the assessment year 2001-02. The appeal was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘A’ and was dismissed due to non-compliance by the appellant, including failure to file returns and provide necessary details regarding purchase expenses.

Background of the Case

Burr Brown India Ltd, a company based in Sultanpur, Uttar Pradesh, was subjected to a search operation on 14th February 2001, leading to a block assessment under section 158BC/143(3) of the Income Tax Act, 1961. The assessment was completed for the block period from 1st April 1990 to 14th February 2001, determining the total income for the assessment year 2001-02 up to 14th February 2001 at Rs. 3,60,09,800/-, including an additional undisclosed income of Rs. 2,00,000/-.

However, Burr Brown India Ltd did not file any return of income for the remaining period, i.e., from 15th February 2001 to 31st March 2001, relevant to the assessment year 2001-02. The Assessing Officer (AO) issued several notices requiring the appellant to furnish details of expenses debited to the Profit and Loss Account under the head “purchases.” Despite multiple opportunities, the appellant failed to provide the necessary details and requested to defer the assessment proceedings due to a pending writ petition before the Hon’ble High Court.

In the absence of any stay on the assessment proceedings by the High Court, and due to the appellant’s failure to furnish the required details, the AO proceeded with the assessment, disallowing purchase expenses to the tune of Rs. 2,05,067/- on a proportionate basis. Additionally, the AO imposed a penalty of Rs. 81,103/- under section 271(1)(c) of the Income Tax Act for concealment of income.

Appeal Before the CIT(A) and ITAT

Aggrieved by the assessment and penalty orders, Burr Brown India Ltd filed appeals before the Commissioner of Income Tax (Appeals)-27, New Delhi [CIT(A)], who upheld the AO’s orders due to the appellant’s continued non-compliance. The appellant then escalated the matter to the ITAT, filing appeals against the orders of the CIT(A).

The appeals were heard by the ITAT Delhi Bench ‘A’, comprising Shri Anil Chaturvedi, Accountant Member, and Shri N.K. Choudhry, Judicial Member. The hearings took place on 26th September 2022, and the final order was pronounced on 28th September 2022.

Despite being duly notified of the hearing dates, Burr Brown India Ltd failed to appear before the Tribunal or provide any written submissions. Notices sent to the appellant were returned unclaimed, indicating that the appellant was no longer operating from the address provided. The Tribunal decided to proceed ex parte due to the appellant’s lack of response and non-compliance throughout the proceedings.

Tribunal’s Decision

The Tribunal reviewed the material on record and noted that Burr Brown India Ltd had not filed any return of income for the period from 15th February 2001 to 31st March 2001, despite multiple notices and opportunities provided by the AO. The appellant also failed to furnish any explanation or details regarding the purchase expenses debited to the Profit and Loss Account, which led to the disallowance by the AO.

The Tribunal observed that the CIT(A) had correctly upheld the AO’s orders, as the appellant had not provided any evidence or details to support its claims. The Tribunal also noted that there was no stay order from the Hon’ble High Court that would have prevented the completion of the assessment proceedings.

Given the appellant’s continued non-compliance and failure to provide any valid explanation or supporting documents, the Tribunal found no reason to interfere with the orders of the CIT(A). The Tribunal upheld both the assessment order and the penalty imposed by the AO, leading to the dismissal of the appeals filed by Burr Brown India Ltd.

Conclusion

The appeal filed by Burr Brown India Ltd against the assessment and penalty orders for the assessment year 2001-02 was dismissed by the ITAT due to the appellant’s failure to file returns and provide the necessary details regarding purchase expenses. The Tribunal’s decision highlights the importance of compliance with tax authorities and the need for taxpayers to actively engage in the appellate process.

This case serves as a reminder to taxpayers of their responsibility to furnish accurate and complete information during tax assessments and to respond to notices from tax authorities in a timely manner. The dismissal of the appeal underscores the consequences of non-compliance and the importance of adhering to the procedural requirements of the Income Tax Act.

Order Pronounced in Open Court: 28th September 2022

Judicial Members: Shri Anil Chaturvedi and Shri N.K. Choudhry

Assistant Registrar: ITAT, New Delhi

Appeal Against Addition and Penalty Due to Non-Compliance – Burr Brown India Ltd vs ACIT Central Circle-18, New Delhi