SAMWAT SYSTEMS PRIVATE LIMITED,PUNE vs. ITO, WARD 6(1), PUNE, PUNE

Briefly stated, the facts of the case are that the assessee is a Private Limited Company engaged in the business of generating electricity. For AY 2017-18, the assessee filed its return of income on 30.10.2017 declaring total income of Rs.3,770/-. The case of the assessee was selected for scrutiny under CASS and the assessment was completed by the Ld. AO u/s 143(3) of the Act on 24.12.2019 at an assessed income of Rs.8,76,400/- thereby making addition of Rs.8,72,628/- on account of disallowance of claim of deduction u/s 80IA of the Act in respect of interest received from the fixed deposit maintained with the Bank of Baroda during the relevant AY under consideration. Consequently, penalty proceedings were initiated by the Ld. AO vide issue of penalty notice u/s 274 r.w.s. 270A(1) of the Act dated 24.12.2019 followed by show cause notices issued on 02.03.2021 and 09.06.2021. The assessee filed its submission and requested to drop the penalty proceedings. However, the Ld. AO rejected

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC who dismissed the appeal of the assessee and confirmed the penalty of Rs.5,23,576/- levied by the Ld. AO u/s 270A of the Act by observing as under : “Decision: I have considered the submission of the appellant as filed in form 35 case records and gone through the AO's observation & decision in penalty vis-à-vis assessment order. It is observed from the penalty order that the AO has imposed penalty of Rs. 5,23,576/- is levied on the assessee, being 200% of the tax payable on the under reported income inconsequence of misreporting of income of Rs.8,72,628/-after being satisfied on completion of scrutiny assessment wherein deduction claimed on the pretext of non eligible interest income reducing in profit of Rs.8,72,628/- being disallowed and added with total income vide order dated 24-12-2019 with initiation of penalty u/s 270A for under reporting of income I find from the case records vis-à-vis assessment order that despite getting multiple opportunity of hearing the appellant miserably failed to file satisfactory compliance/explanation with supporting documents before the assessing officer (AO) in favour of its claim of entitlement of said deduction u/s 801A(4) of the Act. Resultantly the claim of the appellant, being the penalty levied under section 270A of the Income-tax Act deserves to be deleted is treated as 1 unacceptable. The appellant, despite availing multiple opportunity of hearing, has not fulfilled their responsibility or provided adequate explanations and/or supporting documents to substantiate the eligibility of deduction claimed u/s 801A(4) of the Act before the AO in course of scrutiny assessment. Therefore the contention of the appellant that beyond jurisdiction and the penalty order passed being illegal unjustified is incorrect and unacceptable. In view of above, I do not find any infirmity in the order of the AO and resultantly, I have no hesitation in holding that the impugned order of the AO dated21-09-2021isbased on apropos consideration of facts and law and hence the same does not warrant interference. Therefore I am of opinion that AO's decision of imposing penalty of Rs.8,72,628/- under section 270A of the I.T Act stand confirmed in as much as it is justified and in accordance with law. The grounds in this regard are dismissed. In the result, the appeal of the appellant is treated as dismissed.”

Dissatisfied, the assessee is in appeal before the Tribunal challenging the above order of the Ld. CIT(A)/NFAC by raising following grounds of appeal : “1. On the facts and in the circumstances of the case and as per the law, the learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre Delhi erred in dismissing the appeal ex-parte. Thus, the impugned order dated 27.01.2026 may be set aside and the matter may be remanded back before the learned Commissioner of Income Tax (Appeals) for fresh consideration.

At the outset, the Ld. AR submitted that the Co-ordinate Bench of the Pune Tribunal in ITA No.913/PUN/2026 for the same AY 2017-18 in assessee’s own case has set aside the quantum appeal of the assessee to the file of the Ld. CIT(A)/NFAC for de-novo adjudication. He has therefore submitted that the present penalty appeal being consequential may also be set aside to the file of the Ld. CIT(A)/NFAC to adjudicate the same once the quantum appeal of the assessee is decided.

The Ld. DR, on the other hand, fairly conceded with the above submission of the Ld. AR.

We have heard the Ld. Representatives of the parties and perused the material available on record. We find that the Ld. AO has passed the impugned penalty order ex-parte qua the assessee imposing the penalty of Rs.5,23,576/- u/s 270A of the Act due to misreporting of income which has been confirmed by the Ld. CIT(A)/NAFC. We have perused the order of the Co-ordinate Bench in assessee’s case in ITA No. 913/PUN/2026 for AY 2017-18, dated 18.05.2026 and find that the Tribunal has set aside the quantum appeal of the assessee to the file of the Ld. CIT(A)/NFAC for de- novo adjudication on merits of the case. The relevant observations and findings of the Tribunal are reproduced below : “3.5. In this case admittedly the assessee could not file any reply before CIT(A) as it was interested in DTVSVS. Therefore, as suggested by both the parties, the Order of CIT(A) is set aside to CIT(A) for denovo Adjudication. The CIT(A) shall provide opportunity to the assessee. 4. In the result, Ground No. 1 raised by the assessee is allowed for statistical purpose.

Thus, in view of the decision of the Co-ordinate Bench of the Tribunal (supra) and since, the quantum appeal of the assessee has been set aside to the file of the Ld. CIT(A)/NFAC for de-novo adjudication, we deem it fit, to set aside the present penalty appeal also to the file of the Ld. CIT(A)/NFAC to decide the same afresh once the quantum appeal of the assessee is decided on merits and as per fact and law, after providing reasonable opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal of assessee is allowed for statistical purposes.