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Facts
The assessee, Trio Shopping Mall Spaces Private Limited, was assessed for AY 2010-11 and 2011-12 concerning a belated deposit of TDS for FY 2009-10. Penalty proceedings were initiated under Section 271C read with Section 274 of the Income-tax Act, 1961, and a penalty of Rs. 12,04,735/- was imposed. The CIT(A) dismissed the assessee's appeal ex-parte for failure to appear and respond to notices.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeals without adjudicating on merits, solely on procedural grounds. Natural justice demands that a party be heard. Therefore, the impugned orders of the CIT(A) were set aside.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering the merits of the case and the explanation provided by the assessee for the delay in TDS deposit.
Sections Cited
271C, 274, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO & SHRI SONJOY SARMA
BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, JUDICIAL MEMBER Assessment Years: 2010-11 & 2011-12 Trio Shopping Mall Spaces Private Limited …….………..…..….……….Appellant C6 1st Floor Nirmal Arcade, Bpassroad Eranhipalam, Kerala - 673573. [PAN:AABCH8766N] vs. JCIT, TDS, Kochi…………..……….....................……........……...…..…..Respondent Appearances by: None appeared on behalf of the assessee. Smt. Leena Lal, SNR AR, appeared on behalf of the Revenue. Date of concluding the hearing : June 04, 2025 Date of pronouncing the order : July 31, 2025 ORDER Per Sonjoy Sarma, Judicial Member: These two appeals filed by the assessee are directed against the separate orders of the Commissioner of Income-tax (Appeals), both dated 03.10.2024, passed for the assessment years 2010-11 (ITA No, 1005/Coch/ 2024) and 2011-12 ( ). Since the appeals pertain to the same assessee and involve common issues concerning levy of penalty under Section 271C (read with Section274) of the Income-tax Act, 1961, they were heard together and are being disposed of by this common order. First we take up ITA No. 1005/Coch/2024. of the Case are that the assessee, M/s. Hill Food Court Entertainment Pvt. Ltd., was engaged in the business of operating food courts and planning malls, and was originally assessed by the ACIT, Circle-1, Calicut. In respect of the assessment years under consideration, there was a belated deposit of &1006/COCH/2024 Trio Shopping Mall Spaces Private Limited TDS by the assessee for Financial Year 2009-10 relevant to Assessment year 2010-11.In this connection, penalty proceedings under Section 271C, read with Section 274, were initiated. During the proceedings, the assessee submitted its explanation along with supporting documents before the Assessing Officer/ TDS Officer citing reasonable cause for delay However, the Joint Commissioner of Income Tax (TDS) passed penalty orders imposing a penalty of Rs.12,04,735/-, alleging default in timely deposit of tax deducted at source.
Aggrieved by the order of JCIT (TDS) the assessee filed appeal before the CIT(A). In the intervening time, the business of Hill Food Court Entertainment Pvt. Ltd. was succeeded by Trio Shopping Mall Space Ltd. In the appellate proceedings, the CIT(A) dismissed appeal exparte, observing that the assessee did not file any response to the notices under Section 250 issued in the appellate proceeding, the assessee or its representatives failed to appear on the scheduled dates of hearing. Accordingly, the CIT(A) proceeded to dismiss the appeal without going into the merits of the penalty order.
Dissatisfied with order of the ld. CIT(A) assessee is in appeal before this tribunal raising various ground. However, no one turned up before this bench at the time of hearing of the matter, we therefore heard the matter with the assistance of ld. DR, from the record we find that the penalty proceedings were originally initiated in the name of Hill Food Court Entertainment Pvt Ltd. but the business had since been succeeded by Trio Shopping Mall Space Ltd. The assessee had submitted its explanation and evidence during the penalty proceedings before the TDS officer. But the ld.CIT(A)dismissed the appeals without adjudicating on merits, solely on the ground that there was no compliance with the hearing notices.
&1006/COCH/2024 Trio Shopping Mall Spaces Private Limited 5. The learned Departmental Representative (DR), however, supported the orders of the CIT(A), but did not oppose the remand if the assessee is given a fair opportunity.
We have heard the submissions of ld. DR. and carefully perused the record. It is an undisputed fact that the CIT(A) has dismissed the appeals ex-parte, without examining the grounds of appeal or merits of the explanation furnished for the delay in deposit of TDS. In our considered opinion, the interest of justice requires that the assessee be granted a reasonable opportunity to present its case. The natural justice demand that no party should be condemned unheard. particularly in penalty proceedings where the right to be heard is fundamental. In light of the above, we hereby set aside the impugned orders of the CIT(A)in for fresh adjudication; The CIT(A) shall provide the assessee a reasonable opportunity of being heard, including permitting the assessee to file any documents or explanations as necessary. The assessee is directed to comply with the notices and cooperate with the appellate proceedings without fail.
Since the facts and issues involved in for the assessment year 2011-12 are identical to those discussed in findings and directions rendered in ITA No. 1005/Coch/ 2024 shall apply mutatis mutandis to as well.