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Facts
The assessee filed its return of income for AY 2017-18 declaring 'Nil' income after claiming exemptions. The Assessing Officer (AO) levied a penalty of Rs. 2,49,927 under Section 270A for alleged evasion of tax. The Commissioner of Income Tax (Appeals) confirmed the penalty.
Held
The Tribunal noted that the quantum proceedings for the same assessment year were set aside by a co-ordinate bench to the file of the CIT(A) for fresh adjudication. Following this, the Tribunal also set aside the penalty order to the file of the CIT(A) for fresh decision after giving the assessee an opportunity.
Key Issues
Whether the penalty order under Section 270A was justified when the quantum addition itself was set aside and whether the assessee was granted a proper opportunity to present its case.
Sections Cited
270A, 10(23C)(iv), 11, 115BBC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, 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), Delhi dated 22.08.2024, pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: -
1. The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] has erred on facts and in law in confirming the penalty of Rs.2,49,927/- levied against the appellant by grossly ignoring the fact that the penalty order dated 24.01.2024 passed by the Learned Assessing Officer u/s 270A of the I.T.Act, 1961 [referred to as the “Act"] is barred by Limitation.
2. The Ld. CIT(A) has erred on facts and in law in confirming the levy of penalty of Rs.2,49,927/- without appreciating the fact that the Ld. A.O. has levied the penalty without pointing out any specific charge against the appellant as to whether it was for the under-reporting of income or for misreporting of income or for both.
Page 2 of 5 3. The Ld. CIT(A) has erred on facts and in law in confirming the levy of penalty of Rs.2,49,927/-by holding that the voluntary contributions made by the donors as not genuine.
4. The Ld. CIT(A) erred on facts and in law in not providing the appellant reasonable Opportunity to have his say and to make compliance of the reasons being relied upon by him while creating tax demand against the assessee.
The appellant reserves his right to advance such other grounds before or at the time of hearing which he may consider fit and appropriate, for which he craves leaves to amend, alter or otherwise modify the grounds appearing hereinabove with kind permission of the Hon'ble Bench.”
The facts giving rise to the present appeal are that the assessee filed its return of income for the assessment year 2017- 18, declaring total income at Rs.nil after having claimed exemption u/s 10(23C)(iv) and 11 of Income Tax Act, 1961 (hereinafter referred as to the “Act”). The case was taken up scrutiny assessment. The Assessing Officer after considering the materials available on record, came to conclusion that it being the fit case for levying penalty u/s 270A i.e. @ 50% of the tax sought to be evaded. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee. Now, the assessee is in appeal before this Tribunal. It is noted that the present appeal is barred by 55 days. An application seeking condonation of delay has been filed by the assessee. Ld. Counsel reiterated the submissions as made in the application. He contended that the delay in filing was not deliberate but it was caused because of the bonafide reasons as stated in the application. Ld. DR opposed these submissions and submitted that delay is due to negligence of the assessee. Heard the parties, for the reasons stated in the application delay is condoned.
At the outset, Ld. Counsel for the assessee submitted that in the quantum proceedings, the Co-ordinate Bench of this Page 3 of 5 Tribunal in in the case of assessee for the AY. 2017-18 vide order dated 25.10.2024 was pleased to set aside the impugned order and restore the matter back to the file of the Ld. CIT(A) for decision afresh. He prayed that in this case also the impugned order may be set aside and the appeal be restore to the file of the Ld. CIT(A).
On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the orders of the lower authorities. However, he could not rebut the facts that in the quantum proceedings, the Co-ordinate Bench of this Tribunal has set aside the issue of quantum addition to the file of the Ld. CIT(A). For the sake of clarity, the relevant contents of the order of the Co-ordinate Bench of this Tribunal in at para no. 7 & 8 are reproduced as under:-
“7. We have duly considered the facts and circumstances of the case. We observe that the ld. AO has not, at any point of time, stated that the funds of the society were not being spent on account of providing computer education to weaker sections or promoting educational awareness, distribution of cloths and masses etc,. The only point of addition was the fact that the ld. AO, on 24.10.2019, had asked the assessee to submit the details of donors and since the assessee was unable to submit the details within the given time frame, had added back the donations applying the provisions of section 115BBC of the Income Tax Act, 1961. We also observe that along with the grounds of appeal to the ld. CIT(A), the assessee had furnished a list of donors, along with the amounts and when was issued a notice by the ld. CIT(A) stated that it had already submitted the documents. It appears that the ld. CIT(A) did not feel it worthwhile to ask the assessee to furnish further details, which would make the information submitted by it verifiable. Instead he dismissed the appeal. In view of the assessee’s plea, that if the details were insufficient, it should have been served with a notice pointing out the insufficiency and given an opportunity to rectify the shortcoming , we restore the matter back to the file of the ld. CIT(A) with a direction to the assessee, to furnish the complete details of donations including name, PAN / Aadhar number of Page 4 of 5 donors, complete address, details of mode of receipt of donation and amount of donation received from each party, so that the ld. CIT(A) may cause enquiry on the matter and decide the issue on merits. We would like to caution the assessee that, in the event of any failure to make compliance in accordance with the aforesaid terms, the ld. CIT(A) would be justified in concluding that the assessee had no further information to offer and accordingly the donations would be liable to be brought to tax under section 115BBC of the Income Tax Act, 1961. As we have restored the matter back to the file of the ld. CIT(A) for a fresh decision in the interest of justice, the appeal of the assessee is deemed to be allowed for statistical purposes.
In the result, the appeal of the assessee is allowed statistical purposes.”
5. Since the quantum has been set aside to the file of the Ld. CIT(A). The impugned order of sustaining the penalty is also set aside to the file of the Ld. CIT(A) to decide it afresh after giving due opportunity to the assessee. Thus, grounds raised in this appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 20/02/2025.