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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: Shri Sanjay Garg & Dr. Manish Borad
Appearances by: Shri Sunil Surana, AR appeared for Appellant. Shri P. P. Barman, Addl. CIT, Sr. DR appeared for Respondent. Date of concluding the hearing : 03.08.2023 Date of pronouncing the order : 09.08.2023 ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2014-15 is directed against the order passed u/s 250 of the Income Tax Act, 1961 in short the “Act”) by ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [in short ld. “CIT(A)”] dated 30.05.2023 arising out of the penalty order passed u/s 271(1)(c) of the Act by Ld. ACIT, Circle-38, Midnapore dated 28.06.2017.
Assessee has raised following grounds of appeal:
1. For that the Ld AO erred in treating the appeal as filed against the quantum assessment order u/s 143(3) when the appeal was filed against the penalty order as per Form 35 wherein all the details of penalty order were filled up except in row 2(a) wherein 143(3) was mentioned.
2. For that the Ld CIT(A) erred in dismissing the quantum appeal as withdrawn when no appeal was filed against the quantum assessment order.
3. For that the Ld CIT(A) should have quashed the penalty order since there was no specific charge in the show cause notice as to whether the penalty has been initiated for concealment of income or furnishing inaccurate particulars of income.
4. For that on the facts and circumstances of the case the penalty imposed on account of disallowance of interest and alleged undisclosed sale is liable to be cancelled.”
3. At the outset, Ld. Counsel for the assessee submitted that Ld. CIT(A) has dismissed the appeal of the assessee stating that the assessee has to withdraw this appeal. However, there was an inadvertent mistake at the end of the assessee in filing form No. 35 wherein in column no. 2(a) assessee has mentioned section 143(3) in place of sec. 271(1)(c) of the Act. The assessee was not aware about the said mistake during the course of appellate proceeding. The Ld. CIT(A) asked the assessee to reply against the addition made u/s. 143(3) of the Act. Assessee stated that it does not want to challenge the grounds on merit in the order u/s. 143(3) of the Act. Based on this reply, Ld. CIT(A) without dealing on merits dismissed the assessee’s appeal which was actually filed against levy of penalty u/s. 271(1)(c) of the Act. The Ld. Counsel for the assessee urged before the bench to restore the issue of penalty u/s. 271(1)(c) of the Act before the Ld. CIT(A) for necessary adjudication.
On the other hand, Ld. DR supported the orders of the lower authorities but did not oppose to the request made by the Ld. Counsel for the assessee.
We have heard rival submissions and perused the material available on record. We notice that assessee is a Private Limited Company and the assessment u/s. 143(3) of the Act was formed on Page 2 of 4 31.12.2016 assessing total income at Rs. NIL. There was a disallowance of excess claim of interest at Rs.10,81,785/- and addition for undisclosed sale at Rs.1,76,149/-. Ld. AO thus, made total addition of Rs.28,49,934/- but since the assessee had declared loss of Rs.34,27,940/- the income assessed at Rs. Nil. Penalty proceeding u/s. 271(1)(c) of the Act was initiated and vide order dated 28.06.2017 penalty of Rs.8,78,158/- levied u/s. 271(1)(c) of the Act.
So far as the addition made in the assessment order u/s. 143(3) of the Act is concerned, assessee did not prefer any appeal. However, against the levy of penalty u/s. 271(1)(c) of the Act, assessee filed an appeal before the Ld. CIT(A) and in Form No. 35 dated 24.08.2017 all the particulars in Form 35 are taken from the penalty order u/s. 271(1)(c) of the Act dated 28.06.2017 except that in column 2(a) of Form 35 in place of mentioning sec. 271(1)(c) of the Act assessee has mentioned section 143(3) of the Act. This inadvertent mistake did not come to the knowledge of the assessee during the course of appellate proceeding. Ld. CIT(A) asked the assessee to reply as to why the assessee appealed against u/s. 143(3) of the Act. Assessee ignorantly stated that it did not wish to contest the additions made in the assessment order framed on 31.12.2016. Based on its reply, Ld. CIT(A) dismissed the assessee’s appeal as withdrawn. 7. We, however, considering the prayer of Ld. Counsel for the assessee and in the interest of justice and fair play are of the considered view that since in Form No. 35 that particulars filled by the assessee are towards challenging the levy of penalty u/s. 271(1)(c) of the Act and due to ignorance of the assessee in giving mistaken reply, Ld. CIT(A) has dismissed the appeal and, therefore, the assessee deserves one more opportunity. We accordingly, restore the issue to the file of Ld. CIT(A) to adjudicate on merit regarding levy of penalty u/s. 271(1)(c) of the Act at Rs.8,78,158/- after giving reasonable opportunity of being heard to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 09.08.2023.