NJ ASSET MANAGEMENT PRIVATE LIMITED,SURAT vs. ADDITIONAL DIRECTOR OF INCOME TAX (I AND CI), AHMEDABAD, AHMEDABAD

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ITA 64/SRT/2026Status: DisposedITAT Surat28 October 2026AY 2023-20244 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) had issued notices, but it was not recorded whether these notices were actually served on the assessee. Given this lack of clarity regarding service of notices and the potential violation of the principles of natural justice, the Tribunal decided to remand the matter back to the file of the CIT(A). The CIT(A) is directed to properly verify the facts and adjudicate the issues on their merits. The assessee must be granted an opportunity of hearing, adhering to the principles of natural justice. The appeal is allowed for statistical purposes. No specific finding was made on the merits of the penalty itself, as the case was remitted.

What were the facts?

The assessee, NJ Asset Management Private Limited, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year 2023-24. The appeal challenged an ex-parte order passed by the CIT(A) dismissing the assessee's appeal due to alleged non-compliance with hearing notices. The original penalty proceedings under Section 271FAA of the Income Tax Act, 1961, were initiated by the Joint Commissioner of Income Tax (I&CI), Ahmedabad, for alleged non-compliance in filing Forms 61B for Calendar Year 2022 (FATCA and CRS). The JCIT imposed a penalty of Rs. 50,000/-. The assessee contended that the show cause notice was vague and did not specify the exact default or cases for penalty. The JCIT passed an order imposing penalty on a charge not specified for Section 271FAA. The CIT(A) dismissed the assessee's appeal without deciding on merits.

What were the issues?

1. Whether the CIT(A) erred in law and facts by dismissing the appeal on grounds of non-compliance despite the appellant seeking adjournments, thereby violating principles of natural justice, as per Section 271FAA of the Income Tax Act, 1961. 2. Whether the CIT(A) erred in law and facts by passing an ex-parte order and dismissing the appeal without deciding the grounds on merits, as per Section 271FAA of the Income Tax Act, 1961. 3. Whether the CIT(A) erred in law and facts by upholding the JCIT's action of initiating and completing penalty proceedings under Section 271FAA based on an invalid show cause notice issued under Section 274 read with Section 271FAA, as per Section 271FAA of the Income Tax Act, 1961. 4. Whether the CIT(A) erred in law and facts by upholding the JCIT's action of levying penalty under Section 271FAA without affording a proper opportunity of being heard, as the show cause notice did not specify the exact charge of default, as per Section 271FAA of the Income Tax Act, 1961. 5. Whether the CIT(A) erred in law and facts by upholding the JCIT's action of levying penalty under Section 271FAA without affording a proper opportunity of being heard, by not specifying the exact cases for which penalty was proposed, as per Section 271FAA of the Income Tax Act, 1961. Assessee's Contentions: The assessee argued that notices were not received and the CIT(A) failed to consider the details filed and the quantum appeal. The matter should be restored to the CIT(A). Revenue's Contentions: The Ld. DR relied upon the assessment order and the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 271FAA,Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 28.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.64/SRT/2026 (िनधा�रण वष�/Assessment Year: 2023-2024) NJ ASSET MANAGEMENT ADDITIONAL/JOINT PRIVATE LIMITED DIRECTOR OF INCOME TAX (I &CI), AHMEDABAD BLOCK NO 601, 3RD FLOOR, 111, 1ST, NAVJEEVAN TRUST C TOWER, UDHNA UDHYOG NAGAR SANGH BUILDING, INCOME TAX COMMERCIAL COMPLEX, Vs. OFFICE, NR NAVJIVAN PRESS, CENTRAL ROAD 10, UDHNA, NAVRANGPURA, SURAT-394210, GUJARAT ASHRAM ROAD, AHMEDABAD-380014, GUJARAT अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AACCN2030J

अपीलाथ� �ारा/Appellant represented by: Shri Dhruvang Diwan, CA ��थ� �ारा/Respondent represented by: Shri Ashish Kumar, Sr. DR सुनवाई की तारीख / Date of conclusion of hearing: 20.08.2026 घोषणा की तारीख / Date of pronouncement: 28.10.2026 O R D E R PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 25.11.2025 for the Assessment Year (in short “AY”) 2023-24. 2. The assessee has raised the following grounds of appeal: “) The Id. CIT(A) has erred in law and on facts in dismissing the appeal on the ground of noncompliance by the appellant to his notices for hearing despite the fact that the appellant sought adjournments on each occasion.

2) The Id. CIT(A) has erred in law and on facts in passing the ex parte order and dismissing the appeal without deciding the grounds raised before him on the basis of merits and facts of appellant's case. 3) The CIT(A) has erred in law and on facts in upholding the action of the Id. JCIT (I & CI), Ahmedabad ("ld. JCIT") of initiating and completing penal proceedings u/s. 271FAA of the Act on the basis of invalid and improper show cause notice issued under section 274 read with section 271FAA of the Act. 4) The CIT(A) has erred in law and on facts in upholding the action of the Id. JCIT of levying the penalty u/s. 271FAA of the Act without affording a proper and valid opportunity of being heard to the Appellant since in the relevant show cause notice, the Id. JCIT has not specified the exact charge of default levied against the Appellant. 5) The CIT(A) has erred in law and on facts in upholding the action of the Id. JCIT of levying the penalty u/s. 271FAA of the Act without affording a proper and valid opportunity of being heard to the Appellant by specifying the exact cases in the relevant show cause notice in respect of which he proposed to levy penalty u/s. 271FAA of the Act. 6) The CIT(A) has erred in law and on facts in confirming the action of the Id. JCIT of imposing a penalty of Rs.50,000/- u/s. 271FAA of the Act. 7) The appellant craves leave to add, amend, alter, modify, substitute, delete, change or vary all or any of the Ground or Grounds of Appeal.” 3. The assessee filed Forms 61B for Calendar Year 2022 on 31-05-2022 for both CRS and FATCA. The JCIT (I & CI), Ahmedabad initiated penalty proceedings u/s. 271FAA of the Income Tax Act, 1961 (in short “the Act”) by issuing a show cause notice dated 18-03-2024 for A.Y. 2023-2024 for the alleged non-compliances of section 271FAA of the Act in filing above forms. The JCIT (I & CI), Ahmedabad neither through the show cause notice nor through any communication / letter / notice specified the cases in respect of which he proposed to levy penalty u/s. 271FAA of the Act. By the date of issue of above notice, the assessee carried out and completed the corrections in all the reports in respect of Form 61B filed for FATCA; whereas in respect of Form 61B filed for CRS, only 5 reports were pending to be corrected. The assessee filed its detailed submission on 27-08-2024 submitting the facts representing the most genuine and reasonable cause for not submitting the accurate information or not being able to carry out the corrections in information in time and requesting to drop the penal proceedings initiated u/s. 271FAA of the Act. However, the JCIT (I & CI), Ahmedabad passed an order dated 27-09-2024 u/s. 271FAA of the Act imposing a penalty of Rs.50,000/-. The JCIT (I & CI), Ahmedabad imposed the above penalty, inter alia, on the charge that the assessee "failed to furnish statement of accurate statement reportable account" whereas no such charge is specified for levy of penalty u/s. 271FAA of the Act. The JCIT (I & CI), Ahmedabad passed the order dt. 27.09.2024.

4.

Being aggrieved by the penalty order passed u/s 271FAA of the Act, the assessee filed appeal before the CIT(A). The CIT(A) passed ex-parte order and dismissed the appeal of the assessee.

5.

The Ld. Authorised Representative (in short “the Ld. AR”) submitted that the notices were not received by the assessee and the details filed by the assessee before the AO and the quantum appeal was not considered by the CIT(A). Therefore, the Ld. AR submitted that the matter may be restored back to the file of the CIT(A).

6.

The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the CIT(A), despite issuing notices, has not given the details whether those notices were served to the assessee or not. Therefore, it will be appropriate to remand back this matter to the file of the CIT(A) for proper verification and adjudication of the issues on merit. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice.

8.

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

Order pronounced in the open court on 28.10.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER //True Copy// Surat; Dated: 28.10.2026 * Kishore, Sr. P.S.

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat 5. Guard File By order, Digitally signed by HEMA KISHORE HEMA KISHORE JAKKA JAKKA Date: 2026.10.30 11:52:19 +05'30' Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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