SANJEEV PODDAR,KOLKATA vs. A.C.I.T-CIRCLE-34, KOLKATA

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ITA 1994/KOL/2024Status: DisposedITAT Kolkata23 June 2025AY 2013-143 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order suffered from patent illegality due to the non-issuance of a notice under Section 143(2) of the Income Tax Act, 1961, prior to its completion. The Tribunal noted that the CIT(A), in its order dated May 13, 2024, had explicitly stated in paragraph 7 that the non-issuance of the notice constituted a fatal error, making the assessment order illegal and deserving of being quashed. Consequently, the CIT(A) had allowed the ground raised by the assessee and had not adjudicated upon other grounds. Following this finding by the CIT(A), the Tribunal concluded that the order levying the penalty was rendered invalid. Therefore, the penalty order, as confirmed by the CIT(A), was set aside, and the appeal of the assessee was allowed. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Sanjeev Poddar, filed a return of income for Assessment Year 2013-14, which was selected for scrutiny. An assessment order was passed on March 11, 2016, determining a higher total income. The assessee appealed to the CIT(A), who granted partial relief. Subsequently, the assessee opted for the Vivad-se-Vishwas Scheme. The case was re-opened under Section 147, and an assessment order was passed on March 30, 2022, under Sections 144/147, making an addition of Rs. 5,00,060/- for unexplained unsecured loans under Section 69A. Penalty proceedings under Section 271(1)(b) were initiated. A penalty of Rs. 30,000/- was imposed on September 30, 2022, as no one appeared for the hearing. The assessee appealed to the CIT(A), who dismissed the appeal. The assessee then filed this appeal before the ITAT.

What were the issues?

1. Whether the assessment order suffered from patent illegality, specifically due to the non-issuance of a notice under Section 143(2) of the Income Tax Act, 1961, prior to its completion, thereby rendering the subsequent penalty order liable for cancellation. Assessee's contention: The assessee argued that the assessment order was quashed by the CIT(A) due to patent illegality because no notice under Section 143(2) was issued. Consequently, the subsequent penalty order should also be cancelled. The assessee relied on the CIT(A)'s order dated May 13, 2024. Revenue's contention: The Revenue did not raise any objection to the assessee's submissions.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 144,Section 147,Section 69A,Section 271(1)(b),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, KOLKATA

Before: SHRI PRADIP KUMAR CHOUBEY, JM & SHRI SANJAY AWASTHI, AM

For Appellant: Shri A. Kochar, AR
For Respondent: Shri Nicholas Murmu, DR
Hearing: 17.06.2025Pronounced: 23.06.2025

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.05.2024 for the AY 2013-14.

2.

Brief facts are that the assessee filed return of income on 30.09.2013 declaring total income of Rs 19,69,110/-. The case was selected for scrutiny and order u/s 143(3) of the Act was passed on 11.03.2016 determining total income at Rs. 38,30,630/-. Aggrieved, the assessee had preferred an appeal before the CIT(A), who allowed partial relief in his order dated 21.06.2019. Further aggrieved, the assessee preferred

5.

The ld. Dr did not raise any objection. 06. Upon hearing the submissions of the counsel of the respective parties, we have perused the facts of the case and order and find that present appeal is against levy of penalty of ₹30,000/- for the F.Y. 2013-14. There is no denying to this fact that assessee preferred an appeal

"Considering such facts of the case and position of law, non-issue of notice u/s 143(2) of the Act prior to completion of assessment constituted a fatal error, for which the assessment order suffered patent illegality and deserved to be quashed. Accordingly, the ground raised by the assessee is allowed. Consequently, other grounds of appeal are not adjudicated upon."

07. Keeping in view the above facts, the order levying penalty are hereby cancelled. The order passed by the ld. AO confirmed by the ld. CIT (A) are hereby set aside. The appeal of the assessee is allowed.

8.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 23.06.2025.

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