RAJESH TYAGI,GHAZIABAD vs. ITO, WARD-2(2), GHAZIABAD

At the time of hearing, no one was present on behalf of the assessee although an adjournment application seeking time had been filed. However, considering the material available on record and after hearing the Ld. Sr. DR it was deemed appropriate to reject the adjourn application and proceed with the appeal ex parte qua the assessee appellant on merits. The said view was taken in the context of the prayer made by the assessee by way of ground no. 1 raised in the present appeal. By the remaining grounds the assessee assails the merits of the order passed wherein penalty sustained by the AO has been confirmed.

Ground no. 1 which was taken up for hearing reads as under: 1. “Because, Ld. CIT(A) grossly erred in sustaining penalty u/s 271(1)(c) being the same is imposed by non-jurisdictional AO which is based on quantum order which again is passed by non-jurisdictional AO and is beyond jurisdiction even otherwise hence imposition of penalty based on such order is inherently illegal.”

On a perusal of the impugned order it is seen that even before the CIT(A) this issue had been agitated by the assessee. It is further seen that apart from this challenge the assessee had also assailed the order in the grounds of being vague as in the notice it was alleged the AO had not struck off the relevant position not applicable i.e. penalty was being levied on the grounds of filing of inaccurate particulars or on the grounds of concealment which was alleged to be not borne out from the notice served. Reliance was placed upon the proposition of law as available in Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Karnataka).

It is evident from a reading of para 5.2 to para 5.2.3 of the impugned order that the issue was considered in the context of the position of law as considered in SSA Emerald Meadows 386 ITR 13 only. However, the challenge posed on the assumption of jurisdiction by the Assessing Officer was not addressed despite the fact that it was ground no. 2 raised before the CIT(Appeals). Accordingly, on this short point alone which goes to the very root of the matter the entire order is set aside in toto and the issues are restored back to the file of the CIT(Appeals) with the direction to first decide the jurisdictional challenge posed by the assessee and thereafter proceed to decide the issues on merits or any other ground maintainable before the said Authority in accordance with law. Needless to say that a reasonable opportunity of being heard is to be granted and the assessee before the passing of the order.

Said order was pronounced in the open court at the time of hearing itself.