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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI PRASHANT MAHARISHI & SHRI KULDIP SINGH
Per : Kuldip Singh, Judicial Member:
The appellant, M/s. Covert Trading Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 09.11.2022 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2009-10 on the grounds inter-alia that :- “1. The CIT(A) dismissed the appeal without providing any cogent reason, merely relying on the penalty order passed by the AO under section 271(1)(b) of the Income Tax Act, 1961.
2 M/s. Covert Trading Pvt. Ltd.
The CIT(A) failed to consider the submissions made by the appellant, which explained the factual circumstances surrounding the tragic death of the director's brother, who passed away after a short illness.
3. The CIT(A) did not consider the extenuating circumstances provided by the appellant, which may have been material in deciding the appeal. 4. The CIT(A) failed to provide a fair and impartial hearing to the appellant before dismissing the appeal. 5. The order passed by CIT(A) is arbitrary and violative of the principles of natural justice. 6. The CIT(A) needed to have appropriately applied the provisions of section 271(1) (b) of the Income Tax Act, 1961, in the present case. 7. The CIT(A) failed to consider all the facts and evidence presented by the appellant and its effect on the case. 8. The CIT(A) should have given an opportunity for a personal hearing before passing the order. 9. The Appellant craves leave to add, amend, or modify any of the above grounds of appeal
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2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : on reopening of the assessee’s case under section 147 of the Income Tax Act, 1961 (for short ‘the Act’) on the basis of his return of income filed for A.Y. 2009-10 declaring total income of Rs.39,450/-, notice under section 148 of the Act was issued and served upon the assessee on 31.03.2016. Thereafter, notices under section 142(1) along with questionnaire dated 01.06.2016, 07.07.2016 and 20.07.2016 were also issued and served upon the assessee, but the assessee or its representative have failed to comply with the notices and consequently penalty proceedings under section 271B were initiated. On failure of the assessee to respond to the show cause notice issued nor furnishing any explanation, the Assessing Officer 3 M/s. Covert Trading Pvt. Ltd.
(AO) proceeded to levy the penalty to the tune of Rs.10,000/- under section 271B of the Act.
The assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the penalty levied by the AO by dismissing the appeal. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the assessee has come up before the Tribunal by way of filing present appeal.
The assessee has failed to put in appearance to prosecute the present appeal filed by him despite issuance of the notice sent through Registered Post with Acknowledgment Due (RPAD) which was not received back served/unserved. It being a small issue the Bench has decided to dispose of the present appeal on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue. The Ld. D.R. for the Revenue by relying upon the order passed by the AO as well as by the Ld. CIT(A) contended that since numerous opportunities were given to the assessee to respond to the notice issued under section 148 & 142(1) of the Act along with questionnaire the penalty is liable to be confirmed.
Bare perusal of the impugned order passed by the Ld. CIT(A) goes to prove that by way of filing written submissions the assessee categorically pleaded inter-alia that in response to the show cause notice issued by the AO under section 271(1)(b) of the Act reply was filed seeking adjournment on medical reasons and that due to death of the brother of director of the company on 29.11.2016 because of illness it was not possible to attend the hearing and the AO without giving any opportunity passed the penalty order. 4 M/s. Covert Trading Pvt. Ltd.
First of all penalty order has been passed at the back of the assessee who has duly applied for adjournment on ground of sickness of brother of the director namely Girish, who died subsequently and his death certificate was also brought on record before the AO, even then the order has been passed ex-parte. We are of the considered view that sickness of the brother of the director and his subsequent demise is a reasonable cause not file the reply to the show cause notices issued by the AO. However, the Ld. CIT(A) without considering these facts confirmed the penalty in mechanical manner. In these circumstances, we are of the considered view that penalty levied by the AO and confirmed by the Ld. CIT(A) under section 271(1)(b) of the Act is not sustainable in the eyes of law, hence ordered to be deleted.
Resultantly, appeal filed by the assessee is allowed. Order pronounced in the open court on 30.03.2023.