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Facts
The assessee, Hooghly Urban Peoples Service Co-operative Society, filed three appeals (ITA Nos. 1409-1411/Kol/2024) for AY 2020-21. The primary (quantum) appeal concerned non-representation before the Assessing Officer and CIT(A) due to operating in a rural area, unqualified staff, and staff shortage, with the core issue being excess provident fund contribution. The other two appeals challenged penalties levied under Section 270A and Section 272A(1)(d) related to the same assessment.
Held
For the quantum appeal (ITA 1409), the Tribunal restored the matter to the Assessing Officer for fresh adjudication, finding reasonable cause for non-representation but imposing a cost of Rs. 10,000/- on the assessee for wasting departmental time. The penalty under Section 270A (ITA 1410) was dismissed as its foundation ceased to exist with the restoration of the quantum appeal. The penalty under Section 272A(1)(d) (ITA 1411) was deleted, acknowledging reasonable cause for non-representation.
Key Issues
Whether there was reasonable cause for the assessee's non-representation during assessment and first appeal proceedings, and the consequential validity of penalties levied under Sections 270A and 272A(1)(d) when the quantum appeal is restored for re-adjudication.
Sections Cited
250, 270A, 272A(1)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANAJY AWASTHI
Present for: Appellant by : Shri C. M. Roy, CA Respondent by : Shri Nicholas Murmu, Addl. CIT, DR Date of Hearing : 26.03.2025 Date of Pronouncement : 26.03.2025 O R D E R Per Bench : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] vide Appeal No. ITBA/NFAC/S/250/2024- 25/1065495100(1) dated 10.06.2024 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2020-21.
Shri C. M. Roy, CA appeared on behalf of the assessee and Shri Nicholash Murmu, Addl. CIT, DR appeared on behalf of the revenue.
First, we take up ITA No. 1409/Kol/2024. It was fairly agreed by the Ld. AR that on account of non-checking of the mail due to rural area in which the assessee is operating and the staff being not fully qualified as there have been shortage of staff, the assessment proceedings before the Assessing Officer and the appeal before the Ld. CIT(A) went unrepresented. It was the prayer that the issue in appeal was only in regard to the excess contribution towards provident fund. It was the submission that this issue can be restored before the Assessing Officer. It was the prayer that the assessee may be granted an opportunity to represent his case before the Assessing Officer.
In reply, the Ld. CIT, DR did not raise any serious objection. However, it was argued that a cost is liable to be levied as the time of the department has also been wasted.
We have considered the rival submissions. As the assessee has given reasonable ground for non-representation before the Assessing Officer and the Ld. CIT(A) and considering the fact that the assessee is operating in rural area, we are of the view that the issues in this appeal may be restored to the file of the Assessing Officer for adjudication afresh after granting reasonable opportunity of being heard to the assessee, and we do so. However, considering the arguments that the assessee was short of staff it was admittedly the duty of the assessee to appoint proper and competent staff. On this ground, we accept the claim of the revenue and levy a of cost of Rs. 10,000/- to be paid to Legal Aid Services, 3rd floor of the Centenary Building, High Court, Calcutta, 700001, within sixty days from the date of this order and receipt of the same would be produced before the Assessing Officer at the first hearing. Should the assessee not pay the abovementioned costs within the prescribed period of sixty days from the date of this order, the order of the Ld. CIT(A) shall stand confirmed.
Now, we take up ITA No. 1410/Kol/2024. In this appeal, the assessee has agitated against the levy of penalty u/s 270A of the Act in regard to the assessment against which the quantum appeal has been filed in ITA No. 1409/Kol/2024. As we have restored the issue to the file of the Assessing Officer for re-adjudication, the very foundation for the levy of penalty no more survives and consequently, the same is dismissed. However, the liberty is granted to the Assessing Officer to reinitiate the penalty proceeding in the reassessment proceedings if at all any addition is made.
Now, we take up ITA No. 1411/Kol/2024. This appeal has been filed by the assessee against the order passed by the Ld. CIT(A) arising out of the order of Assessing Officer passed u/s. 272A(1)(d) of the Act on account of non-representation and no response in respect of the notices issued in the course of assessment. As we have already found reasonable cause mentioned by the assessee in the quantum appeal in and have restored the issue to the file of the Ld. AO for re- adjudication, the non-representation is found to be on account of reasonable cause and consequently, the penalty levied u/s. 272A(1)(d) stands deleted.
In the result, appeal of the assessee in is partly allowed for statistical purpose, and ITA No. 1411/Kol/2024 stand allowed as indicated above.