Loading judgment…
Facts
The assessee filed an appeal against the penalty order under Section 271AAC(1) of the Income Tax Act, 1961. The CIT(A) dismissed the appeal on grounds of limitation without deciding the quantum addition appeal, which was pending.
Held
The Tribunal condoned the delay in filing the appeal. It held that the CIT(A) prematurely dismissed the penalty appeal as it was dependent on the quantum addition appeal, which had not been decided. The order of the CIT(A) was set aside.
Key Issues
Whether the CIT(A) was justified in dismissing the penalty appeal on limitation without deciding the related quantum addition appeal, and whether principles of natural justice were violated.
Sections Cited
271AAC(1), 69A, 89C, 10(38), 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), New Delhi dated 19.11.2024, pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -
1. Because the CIT(A), NFAC, has erred on facts and in law in upholding the levy of penalty of Rs.3,55,472/- under section 271AAC(1) of the Income-tax Act, 1961, which penalty is bad in law be deleted.
2. Because the CIT(A) has erred on facts and in law in dismissing the appeal in limine, inadvertently holding the same being barred by limitation, the order passed by the CIT(A) may kindly be set aside, the penalty imposed be deleted.
3. Because the CIT(A) was not justified in dismissing the appeal for reasons that no petition for condonation of delay has been filed, without giving any opportunity, to remove the defects in filing the appeal, if any, thereby violating the principle of natural justice, the order Passed by the CIT(A) be quashed.
Page 2 of 4 4. Because on a proper consideration of the facts and Circumstances of the case, it would be found that there being no violation of the provisions of section 69A and 89C of the Income-tax Act, 1961, the quantum appeal bending adjudication, the penalty imposed under section 271AAC(1) is bad in law and be deleted.
Because the CIT(A) has failed to appreciate that the assessee has declared his income arising from Long Term Capital Gain in the return claiming it exempt under section 10(38) of the Income-tax Act, 1961, there was no non-disclosure of any material fact, but it was a case of difference of opinion only, as together the capital gain earned was taxable or not, such matter still pending in quantum appeal, the penalty imposed is bad in law be quashed.”
As per Registry report, there is delay of three (3) days in filing the appeal before the Tribunal. The assessee has not filed any application/affidavit seeking condonation of delay in filing of this appeal. Considering the facts of the present case particularly in view of the fact there are explicit mistake in the impugned order. We, therefore, condone the delay and admit the appeal for adjudication.
The facts giving rise to the present appeal are that the assessee filed his return of income for the A.Y. 2017-18, declaring total income of Rs.2,02,190/-. Thereafter, the assessment proceedings u/s 147 of the Income Tax Act, 1961 (“Act”, for short) was initiated for re-opening the assessment. Subsequently, the re-assessment proceedings were completed on 31.03.2022 at a total income of Rs.61,26,730/-. The Assessing Officer initiated penalty proceedings u/s 271AAC(1) of the Act separately. In this regard, a show cause notice dated 31.03.2022 was issued to the assessee. In response thereto, there was no compliance by the assessee. Therefore, the Assessing Officer proceeded to pass the impugned penalty order against the assessee. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal on the
At the outset, the Ld. Counsel for the assessee contended that the appeal related to quantum addition has not been disposed of by the Ld. CIT(A). He also contended that without having disposed of the quantum appeal, the Ld. CIT(A) has erroneously dismissed the appeal purely on the ground of limitation. He further contended that in the interest of justice, the impugned order may be set aside and the appeal may be restored to the file of the Ld. CIT(A) for the decisions afresh. The Ld. Departmental Representative for Revenue did not express objection to this.
5. There is no dispute that the assessee’s appeal against the assessment order in respect of quantum additions is yet to be disposed of at the level of the Ld. CIT(A). Therefore, it was pre- mature on the part of the Ld. CIT(A) to dispose of this appeal which pertains to levy of penalty u/s 271AAC(1) of the Act because amount of penalty u/s 271AAC(1) of the Act cannot be decided unless decision has been taken regarding quantum of additions to be sustained. Therefore, the impugned order of the Ld. CIT(A) is set aside with the direction to pass de novo order in accordance with law, after deciding the assessee’s appeal in respect of quantum additions and after providing reasonable opportunity to the assessee. All pleadings will be open for the assessee including pleadings on merits and on limitation issue. Grounds of appeal of the assessee are partly allowed for statistical purposes.
Order pronounced in the open Court on 31/07/2025.