JAHAR DEB,AGARTALA vs. THE INCOME TAX OFFICER, WARD - 1, AGARTALA, AGARTALA

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ITA 243/GTY/2025Status: DisposedITAT Guwahati13 March 2026AY 2015-163 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessment was framed ex-parte because the assessee failed to furnish documentary evidence and proofs regarding cash deposits in the bank account before the AO, and similarly failed to furnish evidence before the CIT(A). Consequently, the Tribunal restored the issue to the file of the AO with a direction to re-adjudicate the same after considering the evidence and affording the assessee a reasonable opportunity of being heard. The appeal concerning the quantum of assessment (ITA No. 243/GTY/2025) was allowed for statistical purposes. Regarding the penalty appeal (ITA No. 244/GTY/2025), the Tribunal held that since the assessment order was restored, the penalty levied by the AO and confirmed by the CIT(A) would stand quashed as its foundation would no longer survive. The AO was granted liberty to re-initiate penalty proceedings afresh if required. The principle here is that a penalty levied under Section 271(1)(c) is consequential to an assessment, and if the assessment is set aside or restored for fresh adjudication, the penalty may also need to be re-examined or quashed.

What were the facts?

These are appeals by the assessee, Jahar Deb, against the order of the National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2015-16. The appeals challenge a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, by the Assessing Officer (AO) vide order dated 22.09.2022. The assessee's counsel stated that the case was proceeded ex-parte before the AO and the CIT(A), although the assessee attended the CIT(A) proceedings. The CIT(A) noted that the assessee failed to furnish evidence regarding cash deposited into the bank account. The assessee's representative requested that the appeals be restored to the AO for re-adjudication after submitting all evidence.

What were the issues?

1. Whether the appeals should be restored to the file of the Assessing Officer for re-adjudication, considering the assessee's failure to furnish evidence before the lower authorities, and if so, whether the assessee should be granted a reasonable opportunity of being heard. This issue concerns the procedural fairness and the assessee's right to present evidence. The assessee argued for restoration in the interest of justice and fair play, to allow submission of evidence regarding cash deposits and a re-adjudication on merits. The Revenue relied on the orders of the authorities below. 2. Whether the penalty levied under Section 271(1)(c) should stand, given the restoration of the assessment order. The assessee implicitly argued that if the assessment is restored, the penalty, which is consequential, should also be quashed. The Revenue relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GAUHATI BENCH, GUWAHATI

Before: SHRIDUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

These are the appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 10.06.2025 for the AY 2015-16. The penalty was levied u/s 271(1)(c) of the Act by the ld. AO vide order dated 22.09.2022.

2.

At the outset, the ld. Counsel for the assessee submitted the case of the assessee is ex-parte before the ld. AO as well as before CIT (A) though the assessee attended the proceedings before CIT(A). However, the ld. CIT (A) noted that the evidences were not furnished by the assessee. The ld. Counsel for the assessee therefore prayed that in the interest of justice and fair play, these appeals may be

3.

The ld. DR on the other hand relied heavily on the orders of the authorities below.

4.

After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessment was framed ex-parte when the assessee did not furnish before the ld. AO the documentary evidences/ proofs in respect of cash deposited during the year in the bank account. Similarly, before the ld. CIT (A) the assessee did not furnish evidences finding of which has been recorded by the ld. CIT (A) in para 6.5.3 of the appellate order. Consequently, we restore the issue to the file of the ld. AO with a direction to re-adjudicate the same after taking into account the evidences and after affording reasonable opportunity of being heard the assessee. The appeal of the assessee in is allowed for statistical purposes.

5.

In case of penalty appeal of the assessee in since we have already restored the assessment order while adjudicating the quantum appeal of the assessee in Assessing Officer and confirmed by the ld. CIT(A) would also stand quashed as the very foundation of levy of penalty in the case of the assessee would not more survive. Further, the ld. AO is at liberty to re-initiate the penalty proceeding afresh, if required.

Order pronounced on 13.03.2026.

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