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Facts
The assessee filed three appeals against ex-parte orders by the CIT(A), which included penalty orders under Section 270A for A.Ys 2017-18 & 2018-19 and an assessment order under Section 144 for A.Y 2018-19. The assessee contended that the CIT(A) passed orders without providing reasonable opportunity and despite non-receipt of hearing notices.
Held
The Tribunal found that the CIT(A)'s ex-parte dismissal of appeals without considering the assessee's claims (regarding non-receipt of notices, deletion of quantum additions affecting penalty, and disallowances not falling under misreporting) was unjustified. All impugned orders were set aside, and the matters were remanded to the CIT(A) for fresh adjudication after giving the assessee a proper opportunity of hearing.
Key Issues
Whether the CIT(A) was justified in passing ex-parte orders and dismissing appeals without reasonable opportunity due to alleged non-receipt of notices, and whether penalties under Section 270A were warranted for disallowances when quantum additions were deleted or where disallowances did not constitute misreporting of income.
Sections Cited
270A, 144, 250, 14A, 270A(9)
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
ORDER
Per Vijay Pal Rao, Vice President These 3 appeals by the assessee are directed against the 3 separate orders of the learned CIT (A)-NFAC Delhi, dated 21/02/2025 and 25/02/2025 arising from the penalty orders passed u/s 270A of the I.T. Act for the A.Ys.2017-18 & 2018-19 and assessment order u/s 144 of the Act for the A.Y 2018-19 respectively.
The assessee has raised the following grounds of appeals:
Page 1 of 5 “1. The Ld CIT (A) erred in passing an ex parte order without giving reasonable opportunity to the appellant. 2. The Ld CIT (A) erred failed to appreciate that the notice of hearing which was fixed by the appellate authority was not received by the appellant. 3. The Ld CIT(A) deleted the additions of Rs.10,44,000/- in the assessment order and passed order U/s.250 of the income tax Act. 4. The Ld CIT (A) erred in considering the documents submitted at the time of filing an appeal.”
“1. The Ld CIT (A) erred in passing an ex parte order without giving reasonable opportunity to the appellant.
2. The Ld CIT (A) erred failed to appreciate that the notice of hearing which was fixed by the appellate authority was not received by the appellant.
3. The Ld CIT(A) erred in considering un reasonable disallowance, fixed percentage of salaries without specific evidences, of Rs.8,45,124/- is illegal in the eyes of the law.
4. The Ld CIT (A) erred in considering the documents submitted at the time of filing an appeal for the actual payment of EPF challans Rs.29,85,450/- and disallowance of Rs.7,03,615/- is illegal and violation of principles of natural justice.
5. The Ld CIT (A) erred in considering penalty levied on the appellant under section 270A of the income tax act,1961 for mis-reporting of income due to disallowance of expenditure on its own estimation and enhanced the Assessed income from Rs.51,600/- to Rs.16,00,340/-. I further state that disallowance under section 14A of the income tax act 1961 does not fall in any limb of "Misreporting" of income under section 270A(9) of the income tax act”
“1. The Ld CIT (A) erred in passing an ex parte order without giving reasonable opportunity to the appellant.
2. The Ld CIT (A) erred failed to appreciate that the notice of hearing which was fixed by the appellate authority was not received by the appellant.
3. The Ld CIT(A) erred in considering un reasonable disallowance, fixed percentage of salaries without specific evidences, of Rs.8,45,124/- is illegal in the eyes of the law.
The Ld CIT (A) erred in considering the documents submitted at the time of filing an appeal for the actual payment of EPF challans Rs.29,85,450/- and disallowance of Rs.7,03,615/- is illegal and violation of principles of natural justice.”
None has appeared on behalf of the assessee when these appeals were called for hearing despite repeated notices issued to the assessee. Accordingly, the Bench proposes to hear and dispose of these appeals ex-parte.
4. In the grounds of appeal, the assessee has challenged the impugned orders passed by the learned CIT (A) without giving reasonable opportunity to the assessee. It is stated that the learned CIT (A) has failed to appreciate that notice of hearing were not received by the assessee. Further, in the penalty appeal, the assessee has also stated that for the A.Y 2017-18, the learned CIT (A) has deleted the addition made by the Assessing Officer in the quantum appeal, therefore, the confirmation of the penalty u/s 270A of the Act is not justified. For the A.Y 2018-19, the assessee has stated that apart from ex-parte orders passed by the learned CIT (A) the disallowance were made by the Assessing Officer on adhoc basis towards salaries, EPF payment and disallowance u/s 14A of the Act which do not invite the penal provisions u/s 270A of the Act.
On the other hand, the learned DR has submitted that there is non-compliance on the part of the assessee to the notices issued by the Assessing Officer as well as by the learned CIT (A). He has relied upon the impugned orders of the learned CIT (A).
Having considered the grounds of appeal, submissions of the learned DR and careful perusal of the orders of the learned CIT (A), at the outset, we note that the learned CIT (A) has passed all the three impugned orders ex-parte, and the appeals of the assessee were dismissed for non-prosecution. Further, once the assessee has raised the issue of non-receipt of the notices by the assessee and also penalty confirmed by the learned CIT (A) in respect of the disallowances made by the Assessing Officer which was deleted in the quantum proceedings and some of the disallowances are also claimed to be not falling in the category of understatement of the income or concealment of the income of the assessee, then the dismissal of the appeals by the learned CIT (A) without considering all these aspects in the ex-parte order is not justified. Accordingly, in the facts and circumstances of the case, we set aside the impugned orders passed by the learned CIT (A) arising from penalty orders passed u/s 270A of the Act for the A.Ys 2017-18 and 2018-19 as well as the assessment order arising u/s 144 of the Act for the A.Y 2018-19 and remand all these 3 matters to the record of the learned CIT (A) for fresh adjudication after giving an appropriate opportunity of hearing to the assessee by passing speaking orders.
In the result, all the 3 appeals filed by the assessee are allowed for statistical purposes.