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Facts
A search and seizure operation led to an assessment under Section 143(3) read with Section 153A, which was partially allowed by CIT(A) and further remanded by the ITAT for specific directions. Following the ITAT's order, the AO passed a consequential order and initiated penalty proceedings under Section 271(1)(c). The assessee's appeal against this penalty was dismissed by the CIT(A) due to non-appearance after only one opportunity was provided.
Held
The Tribunal condoned a one-day delay in filing the appeal. It found that the Ld.CIT(A) had disposed of the penalty appeal in a hurried manner, providing inadequate opportunity for the assessee to present their case. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for reconsideration, directing that a reasonable opportunity of hearing be provided to the assessee.
Key Issues
Whether the assessee was denied a reasonable opportunity of being heard by the CIT(A) regarding the penalty imposed under Section 271(1)(c) of the Income Tax Act.
Sections Cited
132, 143(3), 153A, 254, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
(Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.A.Sai Prasad, AR रधजस् व द्वधरध/Revenue by: Shri Gurupreet Singh, DR सुिवधई की तधरीख/Date of Hearing: 26/06/2025 घोर्णध की तधरीख/Date of 30/06/2025 Pronouncement: आदेश / ORDER PER. MANJUNATHA G., A.M: These appeals filed by the assessee are directed against the orders dated 31.12.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], National Faceless Appeal Centre, Delhi pertaining to A.Y.2013-14 and 2014-15. Since the facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed of by this consolidated order.
At the outset, it is observed that the appeal is time barred by one day. The assessee filed an affidavit for condonation of delay and submitted that the delay of one day was neither intentional nor due to negligence, but solely due to the reason that the assessee had travelled out of station for unavoidable family related work during the crucial time. He therefore, pleaded to condone the delay and admit the appeal for hearing in the interest of justice, for which the Ld.DR has not raised any objection.
After hearing both the sides, we condone the delay and admit the appeal for hearing, in the interest of justice.
The brief facts of the case are that the assessee is an individual. A search and seizure operation u/s 132 of the Income Tax Act, 1961 (“the Act”) was conducted in the group cases of Sri Sri Gurhanirman India Pvt. Ltd and others on 24.12.2014. The AO passed an order u/s 143(3) r.w.s. 153A of the Act on 29.12.2016, assessing the total income at Rs.6,44,20,150/-. On being aggrieved, the assessee preferred an appeal before the Ld.CIT(A)- 12, Hyderabad and the Ld.CIT(A) passed order dated 01.06.2018 and partly allowed the appeal filed by the assessee by computing the income of the assessee at Rs.4,86,54,865/-. Aggrieved with the order of the Ld.CIT(A), assessee preferred an appeal before the Tribunal and the coordinate Bench of the Tribunal vide order dated 18.07.2022 partly allowed the appeal filed by the assessee and restored the case to the file of the AO by directing the AO (i) to adopt rate of profit at 15% as against 40% as applied by the Ld.CIT(A) (ii) to find out whether the undisclosed cash payment of Rs.3,18,00,000/ made towards the purchase of land was examined and deleted by the AO in the case of M/s Squaremile Projects or not and if the answer to the above question is yes, then no addition should be made in the hand of the assessee. In compliance with the directions of the ITAT order dated 18.07.2022, the AO passed consequential order u/s 143(3) r.w.s. 254 of the Act on 31.03.2024, assessing the total income of the assessee at Rs.21,82,400/- and initiated penalty proceedings u/s 271(1)(c) of the Act and imposed penalty of Rs.4,15,338/- being 100% of tax sought to be evaded .
Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A) the assessee had challenged the penalty levied by the AO, however, when the appeal was listed for hearing, the assessee had not responded. Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee and upheld the penalty levied by the AO.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before us.
Shri K.A.Sai Prasad, CA, Ld.Counsel for the assessee explained the reasons for not appearing before the Ld.CIT(A) and according to the assessee, the appeal was filed on 26.10.2024 and the Ld.CIT(A) disposed the appeal on 31.12.2024, within a period of two months from the date of institution, by providing only one opportunity of hearing on 18.12.2024. The assessee could not appear before the Ld.CIT(A) because of some engagements, therefore, he submitted that one more opportunity may be provided to go back to the authorities and explain his case.
Shri Gurupreet Singh, Ld.DR present for the Revenue has fairly agreed that the matter may be remanded to the file of the Ld.CIT(A).
We have heard both the parties and considered the relevant facts on record on the issue of imposition of penalty u/s 271(1)(c) of the Act. The Ld.Counsel for the assessee argued that there is no link between the assessment order and the issues considered by the AO levying penalty u/s 271(1)(c) of the Act. The assessee could not get reasonable opportunity of hearing to explain his case before the Ld.CIT(A). We find that the Ld.CIT(A) had disposed the appeal filed by the assessee in a hurried manner by providing only one opportunity of hearing on 18.12.2024, which is evident from the fact that the appeal was instituted on 25.10.2024 and was disposed on 31.12.2024, within a short span of 60 days. Therefore, in our considered view, the assessee did not get proper opportunity of hearing, to explain his case and thus, the assessee deserves one more opportunity of hearing before the authorities to explain his case. Thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the Ld.CIT(A) with a direction to reconsider the issue after providing reasonable opportunity of hearing to the assessee to explain his case.
In the result, both the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the Open Court on 30th June, 2025.