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Facts
The Assessing Officer (AO) made additions under Section 147 and 144 based on a statement of reportable accounts and foreign remittances, and levied a penalty under Section 270A. The assessee, claiming to be a non-resident in Qatar with no Indian taxable income, failed to respond to notices, leading to ex-parte orders. The CIT(A) confirmed the additions and dismissed the penalty appeal.
Held
The Tribunal noted that the Coordinate Bench had already remitted the assessment issue back to the AO. Following judicial discipline, the penalty appeal was also remitted back to the AO for fresh adjudication after providing the appellant an opportunity to be heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal and penalty inlimine without providing adequate opportunity, and whether the penalty order should be remitted along with the assessment order.
Sections Cited
249(4), 270A, 285BA(1), 147, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “C” Bench, Mumbai.
Before: Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM)
1. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine - alleging the violation of the provision of section 249(4) (b) on the part of the Appellant - whereas the said provisions were not applicable to the Appellant for the relevant Assessment Year.
2. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine- by not providing the Appellant with sufficient and adequate opportunity to furnish submission/explanation/ clarifications.
3. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in dismissing the appeal of the Appellant inlimine by not providing the Appellant with any opportunity of being personally heard despite specific request for the same.
4. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in not considering the fact and law that the Id. Assessing Officer has erred in alleging that 2 Shaju Raman Arangath Appellant had under-reported his income and levied penalty of Rs. 2,72,288/- under section 270A of the Act.
5. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer; who has issued a defective show cause notice where the charge/specific limb for imposing penalty under section 270A is not stated.
6. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in reopening the matter for the relevant Assessment Year 2019-20 when there was complete absence of any income chargeable to tax having escaped assessment; there comes no question of any under-reporting of income.
7. In the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in upholding the action of the Ld. Assessing Officer in making addition of Rs. 23,70,438/- alleging it to be escaped taxable income; disregarding the factual and legal matrix of the case.
8. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.
2. From the assessment order, it is observed that the Ld. AO made additions based on the statement of reportable account under section 285BA(1) of the Income Tax Act, source for acquiring purchase of debentures and payment made to non-resident without deducting tax. The Ld. AO has given five opportunities to the appellant and still there was no response from him. In view of the same, the Ld. AO completed the assessment under section 147 read with section 144 of the Act making addition of Rs. 23,70,438/-. Ld. CIT(A) confirmed the addition for the reasons mentioned in his order. Subsequently, the Ld. AR of the appellant has stated before the Bench that the appellant is a non-resident living in Qatar and he does not have taxable income in India and he is not aware of the notices sent to him and hence there was no response. In view of the same, the Coordinate Bench of the ITAT has remitted the issue to the file of the Ld. AO directing him to given one more opportunity and take his explanation while completing the denovo assessment.
3 Shaju Raman Arangath
On the same issue the Ld. AO passed a penalty order under section 270A of the Act and even these penalty proceedings were completed because there is no response from the appellant. On the penalty order of the Ld. AO, an appeal was filed before Ld. CIT(A) which is the issue to be adjudicated now. After taking into submissions of the appellant, Ld. CIT(A) has dismissed the appeal of the appellant by stating that the appellant has not even filed return of income and not paid any advance tax relating to it and hence the appeal was not liable to be admitted and hence dismissed.
Aggrieved by the confirming of penalty order of Ld. CIT(A), now the appellant is in appeal before the ITAT.
During the appeal proceedings before the ITAT, the Ld. AR of the appellant has made two fold arguments :- i) Penalty order was based on the additions made in the assessment order and now that the assessment order itself was remitted back to the Ld. AO, consequent penalty order may also be remitted to the file of the Ld. AO for fresh adjudication.
ii) Ld. CIT(A) dismissed the appeal of the appellant without adjudicating on the grounds raised before him and dismissed the appeal at threshold stating that the appellant has not filed return of income nor paid any tax which is incorrect because the claim of the appellant is that he is not liable to tax in India and whatever income earned by him are only from Qatar and receipts were not taxable in India.
Anyhow, Ld. AR of the appellant has requested the Bench to send these issues back to the file of the Ld. AO because the assessment order and appeal order, both are ex-parte orders and an opportunity may be given to the appellant to explain the same before the Ld. AO on the lines of ITAT decision on the assessment order.
4 Shaju Raman Arangath
Ld. DR opposed to sending back the issues to the file of Ld. AO because before Ld.AO and Ld. CIT(A) there was no response by the appellant and argued that the additions should be confirmed as there was no response from him.
Heard both sides. In view of the fact that the Coordinate Bench has already taken a decision with regard to sending the issue back to the file of the Ld.AO with regard to assessment, consequent penalty appeal also is remitted back to the file of the Ld. AO as the penalty depends purely on the additions made in the assessment order. Following the judicial discipline, this penalty order also is remitted back to the file of the Ld. AO for fresh adjudication and after giving opportunity to the appellant.
The appeal is allowed for statistical purposes.
Order pronounced in the open Court on 11/04/2025.