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Facts
The assessee's assessment was completed under section 147 read with section 144, with an addition to the total income. Consequently, penalty proceedings under section 271(1)(c) were initiated. The assessee failed to comply with the show-cause notice and subsequent notices from the CIT(A), leading to the dismissal of the appeal by the CIT(A).
Held
The Tribunal, considering the principles of substantial justice and fair play, decided to give the assessee one more opportunity to present their case before the CIT(A). The impugned order of the CIT(A) was set aside, and the matter was restored for fresh adjudication.
Key Issues
Whether the assessee should be given another opportunity to present their case before the CIT(A) after failing to comply with previous notices, and whether the penalty initiated under section 271(1)(c) is justified.
Sections Cited
271(1)(c), 147, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SURAT BENCH “SMC” SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 26.06.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013-2014, raising following grounds:
1. The Ld AO was not justifying in initiating penalty u/s 271(1)(c) of the IT Act, 1961, and also the Ld. CIT(A) has erred in confirming the same 2. The Ld AO was not justıfying in levying penalty u/s 271(1)(c) of the I.T. Act, 1961 for Rs 9,55,042/-, also the Ld. CIT(A) has erred in confirming the same.
2. Briefly stated, the facts giving rise to the present appeal are Briefly stated, the facts giving rise to the present appeal are Briefly stated, the facts giving rise to the present appeal are that the assessment in the case of the assessee was completed that the assessment in the case of the assessee was completed that the assessment in the case of the assessee was completed under section 147 read with section 144 of the Income section 147 read with section 144 of the Income section 147 read with section 144 of the Income-tax Act, 1961(hereinafter referred to as (hereinafter referred to as “the Act”) vide order dated ) vide order dated 30.03.2022, wherein the , wherein the Assessing Officer (AO) made an addition made an addition of ₹30,90,752/- to the total income of the assessee. Consequent to the total income of the assessee. Consequent to the total income of the assessee. Consequent to such addition, the AO initiated penalty proceedings under to such addition, the AO initiated penalty proceedings under to such addition, the AO initiated penalty proceedings under section 271(1)(c) of the Act, alleging concealment of particulars of the Act, alleging concealment of particulars of the Act, alleging concealment of particulars of income and furnishing of inaccurate particulars thereof. income and furnishing of inaccurate particulars thereof. income and furnishing of inaccurate particulars thereof.
2.1 Subsequently, a Subsequently, a detailed show-cause notice was issued to was issued to 05.08.2022, providing an opportunity to explain the assessee on 05.08.2022 providing an opportunity to explain as to why penalty under s as to why penalty under section 271(1)(c) should not be levied. ection 271(1)(c) should not be levied. However, no compliance was made by the assessee to the said However, no compliance was made by the assessee to the said However, no compliance was made by the assessee to the said notice. Consequently, the AO proceeded to levy penalty vide order notice. Consequently, the AO proceeded to levy penalty vide order notice. Consequently, the AO proceeded to levy penalty vide order dated 22.09.2022.
2.2 Aggrieved, the assessee preferred an appeal before the Aggrieved, the assessee preferred an appeal before the Aggrieved, the assessee preferred an appeal before the Learned Commissioner of Income Tax (Appeals) sioner of Income Tax (Appeals) sioner of Income Tax (Appeals) [hereinafter referred to as “the CIT(A)” “the CIT(A)”]. The record reveals that during the ]. The record reveals that during the course of the appellate proceedings, the assessee did not respond course of the appellate proceedings, the assessee did not respond course of the appellate proceedings, the assessee did not respond to the multiple notices issued by the Ld. CIT(A). to the multiple notices issued by the The relevant details of such notices, as recorded in paragraph 4.1 of the tices, as recorded in paragraph 4.1 of the tices, as recorded in paragraph 4.1 of the impugned order, are reproduced below for ready reference: impugned order, are reproduced below for ready reference: impugned order, are reproduced below for ready reference:
S.No. Date of Notice Date of Remarks Notices sent to Mailids Notices sent to Mailids issued compliance 1. 13.04.2023 27.04.2023 No reply madangopalsikawat@gmail.com madangopalsikawat@gmail.com 2. 14.10.2024 21.10.2024 Adjournment -do- 3. 13.05.2024 28.05.2024 Adjournment -do- 4. 13.06.2025 20.06.2025 -do- 2.3 Despite repeated opportunities, no effective compliance was Despite repeated opportunities, no effective compliance was Despite repeated opportunities, no effective compliance was made. Accordingly, the made. Accordingly, the Ld. CIT(A) dismissed the appeal and dismissed the appeal and upheld the penalty order passed by the Assessing Officer. upheld the penalty order passed by the Assessing Officer. upheld the penalty order passed by the Assessing Officer.
We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant material on record. rial on record. Before us, the Ld. Counsel for Ld. Counsel for the assessee submitted that the assessee could not respond to submitted that the assessee could not respond to submitted that the assessee could not respond to the notices earlier due to certain genuine and unavoidable the notices earlier due to certain genuine and unavoidable the notices earlier due to certain genuine and unavoidable circumstances. It was further submitted that the assessee is now circumstances. It was further submitted that the assessee is now circumstances. It was further submitted that the assessee is now willing and prepared to willing and prepared to furnish all necessary documents, furnish all necessary documents, explanations, and evidences to substantiate that the penalty explanations, and evidences to substantiate that the penalty explanations, and evidences to substantiate that the penalty levied under section 271(1)(c) is not sustainable in law. levied under section 271(1)(c) is not sustainable in law. levied under section 271(1)(c) is not sustainable in law.
3.1 The Ld. Counsel Ld. Counsel also stated that the assessee wishes to also stated that the assessee wishes to raise additional legal grounds challenging raise additional legal grounds challenging the jurisdiction of the jurisdiction of the Assessing Officer in initiating penalty proceedings and, therefore, in initiating penalty proceedings and, therefore, in initiating penalty proceedings and, therefore, prayed that one more opportunity be granted by remitting the prayed that one more opportunity be granted by remitting the prayed that one more opportunity be granted by remitting the matter to the Ld. CIT(A) Ld. CIT(A) for fresh adjudication.
Ld. Departmental Representative (DR), 3.2 The Ld. Departmental Representative (DR) on the other hand, supported the orders of the lower authorities, contending hand, supported the orders of the lower authorities, contending hand, supported the orders of the lower authorities, contending that adequate opportunities were already granted and that the that adequate opportunities were already granted and that the that adequate opportunities were already granted and that the assessee failed to avail the same. assessee failed to avail the same.
We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and perused the material placed on perused the material placed on record. It is an undisputed record. It is an undisputed position that the Ld. CIT(A) Ld. CIT(A) has dismissed the appeal for non has dismissed the appeal for non- compliance without examining the co compliance without examining the contentions or merits of the ntentions or merits of the case due to non compliance on the part of assessee. case due to non compliance on the part of assessee. case due to non compliance on the part of assessee.
4.1 Having regard to the totality of facts and guid Having regard to the totality of facts and guid Having regard to the totality of facts and guided by the principles of substantial justice substantial justice, we are of the considered view , we are of the considered view that the ends of justice would be best served if the assessee is that the ends of justice would be best served if the assessee is that the ends of justice would be best served if the assessee is afforded one more opportunity to present her case before the afforded one more opportunity to present her case before the afforded one more opportunity to present her case before the Ld. CIT(A).
4.2 In the light of the foregoing discussio In the light of the foregoing discussion, and in the interest of n, and in the interest of justice and fair play, we deem it appropriate to justice and fair play, we deem it appropriate to set aside set aside the impugned order of the impugned order of the Ld. CIT(A)andrestore the matter to his file restore the matter to his file with a direction to decide the appeal with a direction to decide the appeal de novo, after taking into , after taking into consideration the submissions and evidences that may be consideration the submissions and evidences that may be consideration the submissions and evidences that may be furnished by the assessee and after affording her an furnished by the assessee and after affording her an furnished by the assessee and after affording her an adequate opportunity of being heard opportunity of being heard in accordance with law.
4.3 We clarify that the assessee shall cooperate in the We clarify that the assessee shall cooperate in the We clarify that the assessee shall cooperate in the proceedings before the before the Ld. CIT(A) and shall not seek unwarranted and shall not seek unwarranted CIT(A), in turn, shall pass a reasoned and adjournments. The CIT(A) in turn, shall pass a reasoned and speaking order, dealing with all contentions raised, including any speaking order, dealing with all contentions raised, including any speaking order, dealing with all contentions raised, including any legal grounds that the assessee may raise. legal grounds that the assessee may raise.
4.4 Accordingly, the Accordingly, the grounds of appeal raised by the assessee raised by the assessee are allowed for statistical purposes allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced ounced under Rule 34(4) of ITAT Rule under Rule 34(4) of ITAT Rule, 1963 on 30/10/2025.