AKHAND REALITY,VADODARA vs. THE ACIT, CIRCLE-1(3), VADODARA

ITA 1914/AHD/2026Status: DisposedITAT Ahmedabad28 September 2026AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the assessee's appeal for non-compliance with notices without adjudicating the substantive issue on merits. The Tribunal referred to Section 250(6) of the Act, which mandates that an appellate order must state the points for determination, the decision thereon, and the reasons for the decision. It also cited the Bombay High Court's decision in CIT vs. Premkumar Arjun Das Luthra (HUF) (2016), which held that a CIT(A) is obliged to dispose of an appeal in accordance with Sections 250 and 251 and cannot simply dismiss it for want of prosecution. The Tribunal found that while the CIT(A) was entitled to proceed ex-parte due to non-compliance, this should still involve a decision on merits. Therefore, the order of the CIT(A) was set aside, and the appeal was restored to the CIT(A) for fresh adjudication. The assessee was directed to cooperate in the proceedings without fail, failing which the CIT(A) could decide ex-parte on merits, complying with Section 250(6). The appeal was allowed for statistical purposes.

What were the facts?

The assessee, M/s Akhand Reality, filed an appeal against the order dated 29-02-2024 passed by the CIT(A) NFAC, Delhi, concerning Assessment Year 2012-13. The appeal was filed with a delay of 748 days, attributed to non-receipt of the appeal order by post. The Tribunal condoned the delay in the interest of justice. The case originated from a survey action under Section 133 of the Income Tax Act, 1961, conducted on 10-01-2012, where the assessee disclosed Rs. 1.50 crore. This disclosure comprised Rs. 1.05 crore (difference in work-in-progress value) and Rs. 45 lakhs (cash balance). The assessee's return for AY 2012-13 declared a total income of Rs. 1,13,70,709/-, including the Rs. 1.50 crore disclosure. The Assessing Officer (AO) assessed the total income at Rs. 1.50 crore after disallowing certain claims. Subsequently, penalty proceedings under Section 271(1)(c) were initiated, leading to a penalty order dated 26-03-2018 for Rs. 39,52,000/-. The CIT(A) dismissed the assessee's appeal against the penalty order for non-compliance with notices.

What were the issues?

1. Whether the CIT(A) erred in confirming the penalty levied by the AO under Section 271(1)(c) of the Act, despite the assessee not concealing income or furnishing inaccurate particulars. 2. Whether the CIT(A) erred in confirming the penalty levied on Rs. 1.50 crore declared during survey proceedings and offered in the original return, which was assessed by the Revenue without making any addition, and whether this constitutes concealment of income. 3. Whether the CIT(A) erred in confirming the penalty levied on the rejection of set-off of carried forward losses of Rs. 15,80,813/- against undisclosed income declared during the survey, which was allowed to be carried forward to the next year in the appellate order. 4. Whether the CIT(A) erred in dismissing the appeal without appreciating that income declared during the survey, accepted by the department, and disallowing the claim of carried forward loss does not automatically lead to the levy of penalty. Assessee's Contentions: The assessee argued that it neither concealed income nor furnished inaccurate particulars. The income declared during the survey and offered in the original return, assessed without additions by the Revenue, should not be considered concealment. The penalty levied on the rejection of set-off of carried forward losses, which was allowed to be carried forward to the next year, is also erroneous. The assessee contended that the CIT(A) should have adjudicated the penalty on merits rather than dismissing the appeal for non-compliance, as income declared during survey and accepted by the department does not automatically lead to penalty. Revenue's Contentions: The revenue's contentions are not explicitly recorded in the provided judgment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250,Section 250(6),Section 251,Section 133

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: Shri Tapas Ram Misra & Shri R. Govindarajan

For Appellant: Ms. Urvashi Shodhan, A.R
For Respondent: Shri Deependra Kumar, CIT-D.R

PER R. GOVINDARAJAN, ACCOUNTANT MEMBER:

The assessee has filed the appeal against the order dated 29-02- 2024 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre NFAC, Delhi (in short, referred to as the CIT(A)) u/s. 250 of the Income Tax Act, 1961 (herein referred to as “the Act”) relating to Assessment Year 2012-13. 2. The assessee has raised following grounds of appeal:- “1. Ld. CIT (A) (NFAC) erred in law and on facts in confirming penalty levied by AO of Rs. 39, 52, 000/- invoking provisions of s. 271(1)(c) of the Act overlooking the fact that the appellant has neither concealed income nor furnished inaccurate particulars of income.

2.

Ld. CIT (A) (NFAC) erre

The order continues below.

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