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Facts
The assessee filed an appeal challenging the penalty order passed by the NFAC. The quantum appeal against the assessment order under section 143(3) was pending before the CIT(A). The penalty order was passed ex-parte.
Held
The Tribunal held that the ex-parte penalty order was incorrect. It was deemed appropriate for the CIT(A) to decide both the quantum appeal and the penalty appeal simultaneously.
Key Issues
Whether the ex-parte penalty order passed while the quantum appeal is pending before CIT(A) is valid and whether both appeals should be decided together.
Sections Cited
14, 265, 69C, 271AAC, 143(3)
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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 17/07/2024 in respect of the A.Y. 2018-19 on the following grounds of appeal:
2. At the time of hearing, the Ld.AR submitted that this appeal is against the penalty order passed by the AO and brought to our notice that the quantum appeal made u/s. 143(3) is pending before the Ld.CIT(A) and therefore the ex-parte order passed by the Ld.CIT(A) as against the penalty proceedings is not correct. The Ld.AR therefore prayed that there may be a direction given to the Ld.CIT(A) to decide both the appeals together, in the interest of justice. The Ld.DR relied on the order of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
There is no dispute with regard to the fact that the AO had made the assessment u/s. 143(3) of the Act which was challenged by the assessee before the Ld.CIT(A) and the said appeal is pending for hearing before him. In such circumstances, the penalty order passed subsequent to the quantum order was decided ex-parte which in our opinion is not correct. It will be appropriate for the Ld.CIT(A) to decide both the quantum appeal as well as the penalty appeal so that the result given by him in the quantum appeal would certainly have a bearing on the penalty appeal.
In these circumstances, we are inclined to set aside the ex party order passed by the Ld.CIT(A) and remit the issue to the file of Ld.CIT(A) with the direction to decide both the quantum and penalty appeals simultaneously together in the interest of justice.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 16th January, 2025.