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Facts
The assessee filed four appeals against orders of the CIT(A) for assessment year 2015-16. One appeal (ITA 925/CHD/2025) was related to a quantum assessment order, while the others were related to penalty proceedings. A notice under Section 148 was issued on 01.04.2022 for assessment year 2015-16, which the assessee failed to respond to, leading to an ex-parte assessment order.
Held
The Tribunal held that the notice issued under Section 148 on 01.04.2022 was without jurisdiction as it was issued after the time limit prescribed by law, especially in light of Supreme Court judgments. Consequently, the assessment order was quashed, and the related penalty appeals were also allowed. However, one penalty appeal was dismissed due to lack of merit.
Key Issues
Whether a notice issued under Section 148 after the prescribed time limit, as per Supreme Court rulings, is without jurisdiction, and consequently, whether penalty orders arising from such an assessment are valid.
Sections Cited
147, 144, 144B, 271(1)(b), 271(1)(c), 271F, 148, 142(1)
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Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI MANOJ KUMAR AGGARWAL
emerges out of a quantum proceeding against an assessment order dated 05.01.2024 passed u/s 147 read with Section 144/144B of the Income Tax Act, emerges out of a penalty proceeding u/s 271(1)(b) and emerges out from a penalty proceeding u/s 271(1)(c) of the Income Tax Act, whereas ITA No.928/CHD/2025 emerges out from penalty proceeding u/s 271F of the Income Tax Act.
First, we take the quantum appeal. The brief facts of the case are that a notice u/s 148 of the Income Tax Act was issued on 01.04.2022 in assessment year 2015-16. The assessee did not appear in response to the notice issued by the AO, accordingly, an ex-parte assessment order was passed on 05.01.2024. The copy of this notice u/s 148 is available on page No. 36 of the Paper Book.
Dissatisfied with the assessment order, assessee carried the matter in appeal before the ld.CIT (Appeals) who has dismissed the appeal on the ground that it was time barred by 120 days. The assessee has filed an application for to 928/CHD/2025 A.Y.2015-16 3 condonation of delay but ld.CIT (Appeals) did not condone the delay.
Before us, ld. counsel for the assessee, at the very outset submitted that Hon'ble Supreme Court in the case of Union of India Vs Rajeev Bansal reported in 167 taxmann.com 70 has held that notice u/s 148 in assessment year 2015-16 could have not been issued with the help of TOLA after 01.04.2021, rather Revenue has conceded before the Hon'ble Supreme Court that such notices would be dropped as they will not fall within the legal jurisdiction of time limit prescribed under TOLA. He placed on record copy of an order passed by ITAT Chandigarh in ITA No. 505/CHD/2024. In this case, both of us have quashed the re-opening of an assessment in assessment year 2015-16 on the ground that notice u/s 148 was issued on 28.07.2022. It was issued after 01.04.2021 and as per the judgement of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), this notice is without jurisdiction.
5.1 Ld. DR, on the other hand submitted that assessee did not appear before the AO and did not submit any detail before to 928/CHD/2025 A.Y.2015-16 4 the AO. It did not file its appeal well in time before the CIT (Appeals), hence, merit cannot be entertained.
We have duly considered the rival contentions and gone through the record carefully. The very notice issued u/s 148 of the Income Tax Act by the AO on 01.04.2022 is without jurisdiction. The ld.CIT (Appeals) ought to have appreciated this fact and in this situation ought to have condoned the delay, if any, happened on account of bonafide error of the assessee. We cannot legalize the illegality on account of minor irregularity, if any, at the end of the assessee. Therefore, we condone the delay in filing the appeal before the CIT (Appeals). The one angle to look to the situation could be to set aside the issues to the file of CIT (Appeals) for fresh adjudication after condonation of delay because CIT (Appeals) has not adjudicated the issue on merit but that would unnecessarily multiply the litigation. Once it is observed that assumption of jurisdiction by the AO is not valid and his action is time barred, then there is no need to relegate the issues to the file of CIT (Appeals) and enhance the multiplicity of the litigation. Accordingly, following the judgement of Hon'ble Supreme to 928/CHD/2025 A.Y.2015-16 5 Court and looking to the copy of notice available on page No. 36 of the Paper Book as well as the facts mentioned by the AO in paragraph No. 1.3 of the assessment order, we observe that notice issued on 01.04.2022 is without jurisdiction, hence no assessment proceeding could have taken place on this time barred notice. Accordingly, we quash the assessment order and allow the appeal of the assessee.
Now we take ITA No. 927/CHD/2025. The appeal is time barred by 138 days before the ld.CIT (Appeals). Since we have condoned the delay in filing appeal before CIT (Appeals) in the quantum appeal, i.e. ITA 925/CHD/2025, therefore, following our finding in that appeal, we condone the delay in the present appeal also.
As observed earlier, this appeal arises out of a penalty proceedings initiated u/s 271(1)(b) of the Income Tax Act. In other words, penalty has been levied by the AO on account of non compliance of the statutory notice u/s 142(1) of the Act. Since we have quashed the assessment order, therefore, it is to be construed that no notice was required to be complied with by the assessee. The simple reason for this is that notice to 928/CHD/2025 A.Y.2015-16 6 issued for re-opening of the assessment was without jurisdiction, as held above. Accordingly, we allow this appeal and quash the penalty imposed upon the assessee.
In the result, appeal is allowed.
This appeal emerges out from levy of penalty u/s 271(1)(c) of the Income Tax Act on account of concealment of income.
The appeal is time barred by 138 days before the ld.CIT (Appeals). Since we have condoned the delay in filing appeal before CIT (Appeals) in the quantum appeal, i.e. ITA 925/CHD/2025, therefore, following our finding in that appeal, we condone the delay in the present appeal also.
There is no income assessable in the hands of the assessee. We have already quashed the assessment order. Consequently, no penalty is imposable upon the assessee u/s 271(1)(c) of the Act. Accordingly, we allow this appeal of the to 928/CHD/2025 A.Y.2015-16 7 assessee and quash levy of penalty imposed u/s 271(1)(c) of the Income Tax Act.
In the result, appeal is allowed.
This appeal is directed at the instance of the assessee against the order of ld.CIT (Appeals) dated 01.07.2025 in assessment year 2015-16. It arises from a penalty proceeding u/s 271F of the Income Tax Act. The AO has imposed a penalty of Rs.5000/- on account of non-filing of the return within due date. This order of the penalty dated 19.06.2024 has been challenged by the assessee before the ld.CIT (Appeals) which has been upheld by the First Appellate Authority by not condoning the delay in filing the appeal.
We have condoned similar delay in the quantum appeal, therefore, following our observation in the quantum appeal, we condone the delay in filing the appeal against the penalty order before the CIT (Appeals). However, we find that there is no plausible explanation with the assessee for not filing the to 928/CHD/2025 A.Y.2015-16 8 return well in time. Accordingly, we do not find any merit in this appeal. It is dismissed.