NAIMISHBHAI KANTIBHAI PATEL,AHMEDABAD vs. THE ITO, WARD-1(3)(1), AHMEDABAD

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ITA 89/AHD/2025Status: DisposedITAT Ahmedabad17 April 2025AY 2016-17Bench: DR.BRR KUMAR (Vice President), Ms SUCHITRA KAMBLE (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the quantum appeal was set aside for de-novo assessment. Consequently, the penalty levied under Section 271(1)(c) was deleted, with a direction to consider penalty proceedings at the time of passing the fresh assessment order.

What were the facts?

The assessee filed its return of income declaring Rs. 405,170/-. The assessment order added Rs. 64,46,202/- as unexplained expenditure under Section 69C, and initiated penalty proceedings under Section 271(1)(c). A quantum appeal for the same assessment year was previously restored to the Assessing Officer for de-novo assessment.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the assessment itself is set aside for de-novo assessment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 147,Section 144,Section 144B,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: DR.BRR KUMAR & Ms SUCHITRA KAMBLE

For Appellant: Shri Hersh Jani, AR
Hearing: 15.04.2025Pronounced: 17.04.2025

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR.BRR KUMAR, VICE PRESIDENT & Ms SUCHITRA KAMBLE, JUDICIAL MEMBER (Assessment Year: 2016-17 Naimishbhai Kantibhai Patel, Vs. The Income Tax Officer, 19, Vasundhra Colony, Ward-1(3)(1), Gulbaitekra, Ahmedabad. Ellisbidge, Ahmedabad-380006. [PAN No. ABDPP9965D] (Appellant) (Respondent) .. Appellant by : Shri Hersh Jani, AR Respondent by: Adjournment Application filed Date of Hearing 15.04.2025 Date of Pronouncement 17.04.2025 O R D E R DR. BRR KUMAR, VICE PRESIDENT:

Delay Condoned This appeal has been filed by the Assessee against the penalty order passed u/s.271(1)(c) by the Ld. Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi vide order dated 27.09.2022 for the Assessment Year 2016-17. 2. The Assessee has taken the following grounds of appeal:- Asst.Year 2016-17 - 2–

1. The learned CIT (A) has erred in law and on facts in confirming the penalty order passed by the Assessing Officer uls. 271(1) (c) of the Act.

2. The learned CIT(A) has erred in law and on facts in passing a penalty order by ignoring the fact that there was reasonable ground for non-compliance to notice as physically it was never served upon and the assessee was non convergent with emails. Hence the order imposing penalty is requested to be quashed.

3. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of appeal.

3.

The facts of the case are that assessee filed its return of income declaring a total income of Rs. 405,170/- The assessment order u/s 147 r.w.s 144 read with section 144B of the Income Tax Act was passed for the above referred assessment year on 26/03/2022. In the said order Rs. 64,46,202/- has been added to the assessee's income u/s 69C of the Act as unexplained expenditure. Simultaneously a penalty proceedings u/s 271(1)(c) were also initiated and an order imposing penalty was passed on 27.09.2022 by the Assessing Officer.

4.

At the outset, we noticed that quantum appeal bearing for A.Y 2016-17 dated 20.03.2025 has been restored to file of Assesssing Officer for assessment denovo. The relevant extract of the order is reproduced as below:

…3. On going through the record, we find that notices of hearing were issued on several occasions, but the assessee failed to comply with the notices and also there was a delay in filing the appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal of the assessee since the assessee failed to furnish sufficient cause for condonation of delay in filing the appeal. The Ld. Counsel for the assessee prayed that, given an opportunity, all the details/clarification/explanation would be provided to the revenue authorities. We find that assessee has not even complied before the Assessing Officer, hence in the interest of justice the matter is remanded to the Assessing Officer for conducting assessment de-novo and a cost of Rs.5000/- imposed on the assessee, the amount should be deposited into “Prime Minister Relief Fund and the receipt shall be submitted before the JAO, who shall take it on Asst.Year 2016-17 - 3– record before passing the order giving effect to the order of the ITAT. The assessee shall comply with the notices issued by the Assessing Officer without seeking any unnecessary adjournments.

5.

Since the quantum appeal stands set-aside to the Assessing Officer for framing assessment de-novo, the penalty levied u/s.271(1)(c) of the Act is hereby deleted with a direction to consider initiation of penalty proceeding at the time of passing of Assessment order.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

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