PROCESSIA PLM PRIVATE LIMITED,PUNE vs. NATIONAL FACELESS ASSESSMENT CENTER, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2006/PUN/2025 िनधा�रण वष� / Assessment Year : 2017-18 Processia Plm Private Vs. ITO, Ward-4(5), Pune. Limited, First Floor, Office No.102, Amar Apex Building, Amar Apex Condominium Baner, Pune- 411045. PAN : AAACT6811H Appellant Respondent Assessee by : Shri Hardik Nirmal (Virtual) Revenue by : Smt. Neha Thakur (Virtual) Date of hearing : 05.05.2026 Date of pronouncement : 30.06.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 13.06.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “Ground No. 1: On the facts and in the circumstances of the case and in law, the order under section 250 of the Act passed by the learned Commissioner of Income Tax (Appeals) ['Ld. CIT(A)'] on 13 June

2 ITA No.2006/PUN/2025 2025, upholding the penalty imposed by the National Faceless Assessment Centre, Delhi ('Learned AO') vide the order dated 11 November 2021 passed under section 270A of the Act, is bad in law. Ground No. 2: On the facts and circumstances of the case and in law, the Ld. AO and Ld. CIT(A) has erred in imposing and confirming the penalty of INR 10,99,462 under section 270A of the Act, alleging underreporting of income as a consequence of misreporting of income by the Appellant without having, regard to the provision of section 270A(9) and 270A(6) of the Act. Ground No. 3: On the facts and circumstances of the case and in law, the Ld. AO and Ld. CIT(A) has erred in imposing and confirming the penalty of INR 7,02,716 under section 270A of the Act in relation to the disallowance of depreciation of INR 11,37,081 without appreciating that the penalty under section 271(1)(c) of the Act on the similar disallowance of depreciation was dropped by the learned Assistant Commissioner of Income Tax Circle 2, Pune in the case of the Appellant for the assessment year 2016-17. Ground No 4: On the facts and circumstances of the case and in law, the Ld. AO and Ld. CIT(A) has erred in imposing and confirming the penalty of INR 3,90,731 in relation to the disallowance of INR 6,32,251 under section 43B of the Act without appreciating that said amount was disallowed under section 43B of the Act in the preceding previous year and paid during the assessment year under consideration thus, allowable under section 43B of the Act. Ground No 5: The Appellant craves leave to add to and/or to alter, amend, rescind, modify the grounds herein below or produce further documents before or at the time of hearing of this Appeal.” 3. The appellant has also raised the following additional ground of appeal :- “6. On the facts and in the circumstances of the case and in law, the order levying penalty under section 270A of the Income-tax Act, 1961 (‘the Act’) is illegal and bad in law as neither the notice under section 270A of the Act issued for initiating penalty proceedings nor the order passed thereon specify the specific/relevant limb for initiating or levying penalty under section 270A of the Act for under-reporting of income as a consequence of misreportings.”

3 ITA No.2006/PUN/2025 4. Facts of the case, in brief, are that the assessee is a company engaged in the business of software development and manufacturing prototypes and has filed original return of income on 29.11.2017 declaring income of Rs.36,56,910/- and subsequently revised its return of income on 08.01.2018 declaring total income at Rs.1,16,260/-. The case was selected for scrutiny and vide order dated 27.12.2019 assessment proceeding was completed u/s 143(3) of the IT Act by determining total income at Rs.1,16,256/-. Income as per 115JB of the IT Act was calculated at Rs.35,96,677/- which is higher than normal income, therefore, taxed as per the provisions of section 115JB of the IT Act. The Assessing Officer initiated penalty proceedings u/s 270A of the IT Act for under-reporting of income in consequence of mis-reporting on the ground of claim of excess depreciation of Rs.11,37,081/- and on the ground of disallowance of Rs.6,32,251/- u/s 43B of the IT Act and on the ground of disallowance of foreign travel expenses of Rs.9,734/- being prior period expenses. After considering the reply and submissions of the assessee, the Assessing Officer vide order dated 11.11.2021 levied penalty of Rs.10,99,462/- u/s 270A of the IT Act

4 ITA No.2006/PUN/2025 for under-reporting of income in consequence of mis-reporting to the extent of income of Rs.17,79,066/- (11,37,081 + 6,32,251 + 9,734). 5. Being aggrieved with the above penalty order dated 11.11.2021, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee & consequently confirmed the penalty of Rs.10,99,462/- u/s 270A of the IT Act imposed by the Assessing Officer for under-reporting of income in consequence of mis-reporting. 6. It is the above order against which the assessee is in appeal before this Tribunal. 7. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee has raised as many as four grounds of appeal on merits of the case and also raised an additional ground which is technical in nature which was not raised before Ld. CIT(A)/NFAC. We further find that Ld. CIT(A)/NFAC has not adjudicated on merits of the case since the

5 ITA No.2006/PUN/2025 assessee failed to appear before him which resulted in ex-parte order by Ld. CIT(A)/NFAC. 8. Considering the totality of the facts of the case and in the light of order passed by Hon’ble High Court of Bombay in the case of Commissioner of Income-tax (Central) Nagpur vs. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) wherein it was held that “law does not empower Commissioner (Appeals) to dismiss appeal for non-prosecution”, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to him with a direction to decide the appeal afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant documents, submissions, evidences in support of grounds of appeal and also permitted to raise additional ground before Ld. CIT(A)/NFAC which is raised before us without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate

6 ITA No.2006/PUN/2025 orders as per law. Thus, the grounds of appeal/additional ground raised by the assessee are allowed for statistical purposes. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 30th day of June, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 30th June, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.06.30 14:36:40 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr.CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 4. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.