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Facts
The assessee did not file an income tax return for AY 2014-15 but made cash deposits of ₹1,53,36,418/-. The Assessing Officer reopened the assessment under Section 147 and imposed a penalty under Section 271(1)(c). The CIT(A) dismissed the assessee's appeal due to non-compliance.
Held
The Tribunal observed that the assessee failed to participate in the CIT(A) proceedings despite opportunities. To uphold natural justice, the Tribunal set aside the CIT(A)'s order and remitted the appeal back for fresh adjudication, directing the CIT(A) to provide both the assessee and the AO an opportunity of being heard and to consider Rule 46A if applicable.
Key Issues
The key issues were the condonation of a 13-day delay in filing the appeal, the validity of the penalty imposed under Section 271(1)(c), and the dismissal of the appeal by the CIT(A) without a hearing on merits due to non-compliance.
Sections Cited
250, 271(1)(c), 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SONJOY SARMA & SRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2014-15 dated 25.02.2025, which has been passed against the penalty order u/s 271(1)(c) of the Act, dated 20.09.2022. I.T.A. No.: 1020/KOL/2025 Assessment Year: 2014-15 Debabrata Chakraborty.
The Registry has informed that the appeal filed by the assessee is barred by limitation by 13 days. An affidavit seeking condonation of delay has been filed by the assessee stating as under: “I Sri DEBABRATA CHAKRABORTY, aged about 46 years. by religion Hindu, by occupation Business having place of residence at Manidaha, Medinipur Sadar, Medinipur West, WB-721102, do hereby solemnly affirm and declare as follows: 1) That I am the appellant in the instant case before I.T.A.T., Kolkata, Bench, Kolkata. 2) That I was down with severe back pain since the third week of April, 2025 and as per Doctor's advice I had taken complete bed rest since 18.04.2025 to 28.04.2025 and could not file this instant appeal petition within the due time of 60 days. 3) That after recovering from illness I made the necessary arrangements to file this instant petition after consultation with my Counsel. 4) That I am solely responsible for causing this inordinate delay in filing the appeal for which I had no control. The statements made in para No. 1 to 4 are true to the best of my knowledge and belief.
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. That your petitioner is a law-abiding Indian Citizen.
That your petitioner owns a trading business in Midnapore District of West Bengal and engaged in business activities.
That the entire amount, which was deposited into the bank account, shall not be treated as net income of your Petitioner. I.T.A. No.: 1020/KOL/2025 Assessment Year: 2014-15 Debabrata Chakraborty.
That your Petitioner has no mala fide intention to evade tax. Hence, the addition of Rs. 15336418 and subsequent imposition of 100% Penalty were unjustified, erroneous, illegal and bad in law.
That the A.O. is mi irected both in facts and law as A.O. determined total facts and as A.O. determined total income in Assessment Order, a sum of Rs 15336418.00, whereas in computation sheet, the total income has been shown (Other Sources) of Rs. 30672836. 00. So, the entire tax determination and imposition of penalty U/s 271(1)(C), both were arbitrary, illegal and bad in law.
That the Petitioner craves leave to file any further grounds of appeal and or alter any grounds of appeal in any time or at the time of hearing stage.”
Brief facts of the case are that the assessee did not file the return of income for AY 2014-15 and as per information available on records, the assessee had made cash deposits of ₹1,53,36,418/- in the savings bank account maintained with UCO Bank. The Assessing Officer (hereinafter referred to as Ld. 'AO') reopened the assessment of the assessee u/s 147 of the Act and thereafter penalty u/s 271(1)(c) of the Act was imposed. Aggrieved with the penalty order, the assessee filed an appeal before the Ld. CIT(A) who vide order dated 25.02.2025 dismissed the appeal of the assessee on the ground of non-compliance. Further, aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before this Tribunal.
In the course of appeal, the assessee sought adjournment but the same was rejected as there did not appear to be a justified ground for seeking adjournment. It is noticed that the assessee did not participate in the proceedings before the Ld. CIT(A) who dismissed the appeal by holding that the Ld. AO had imposed the penalty on merits after thoroughly analysing the facts of the case and no error was observed in the order passed by the Ld. AO. However, the Bench was of the view that since no proper compliance was made before the Ld. CIT(A) as I.T.A. No.: 1020/KOL/2025 Assessment Year: 2014-15 Debabrata Chakraborty. despite providing ample opportunities of being heard by following the principle of natural justice, the assessee did not avail the same and failed to comply with the notices of the appellate authority issued for hearing of the case. Hence, in the interest of justice, another opportunity was considered to be provided to the assessee to represent his case properly before the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and remit the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereby pass an order in accordance with law. For statistical purposes, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 5th August, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 05.08.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1020/KOL/2025 Assessment Year: 2014-15 Debabrata Chakraborty. Copy of the order forwarded to:
Debabrata Chakraborty, Manidaha, Medinipur Sadar, Paschim Medinipur, West Bengal, 721102. 2. ITO, Ward-38(1), Midnapur.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order