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Facts
Two different assessees appealed against ex-parte orders passed by the CIT(A), levying penalty under section 271(1)(c) of the Income Tax Act for assessment years 2008-09 to 2011-12. The assessees' counsel argued that their non-appearance before the CIT(A) was due to circumstances beyond their control and requested another opportunity to present their cases.
Held
The Tribunal acknowledged that while the CIT(A) provided sufficient opportunities, the ex-parte orders warranted setting aside based on principles of natural justice. All impugned orders were remitted back to the CIT(A) for fresh adjudication on merits, with a direction to provide reasonable opportunity of hearing and for the assessees not to seek unjustified adjournments. Additionally, a cost of ₹5,000 per appeal (total ₹20,000) was imposed on the assessees for non-compliance and procedural delays, payable to the Maharashtra State Legal Services Authority.
Key Issues
Whether ex-parte penalty orders passed by the CIT(A) should be set aside and remitted for fresh hearing to ensure natural justice, and if costs should be imposed for procedural delays.
Sections Cited
271(1)(c) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 21/01/2025 Date of Order – 23/01/2025
O R D E R PER V. DURGA RAO, J.M.
Captioned appeals by two different assessees are against the impugned orders of even date 27/03/2024, passed by the learned Commissioner of 2 M.G. Bhangdiya And Hitbhav Engineers JV K.M. Bhangdiya (JV)
Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2008–09, 2009–10, 2010–11 and 2011–12 respectively.
In all the appeals, the only identical issue raised by the assessees is levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ("the Act") except variation in figures.
3. During the course of hearing, the learned A.R., Shri Ashok Bansal, appearing for the assessee, submitted that in all the four appeals, the learned CIT(A) passed ex-parte orders, as the assessee could not appear for the situation beyond control and prayed that one opportunity may be granted by restoring all the appeals to the file of the learned CIT(A) to enable the assessee to substantiate its cases before the learned CIT(A).
2. On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assesse, however, the assessee did not appear before the learned CIT(A) and not furnished relevant details. He strongly supported the orders passed by the learned CIT(A).
We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. We find that though the learned CIT(A) granted opportunities to the assessee to substantiate its cases, ultimately, the orders passed by him are ex-parte orders, which according to us is absolutely correct. However, since the order passed byteh learned CIT(A) is an ex–parte order, we are of the opinion that by following 3 M.G. Bhangdiya And Hitbhav Engineers JV K.M. Bhangdiya (JV) the principles of natural justice, one opportunity should be granted to the assesse to substantiate the cases before the learned CIT(A). In view of the above, the impugned orders passed by the learned CIT(A) are hereby set aside for all the years under consideration and remit these appeals back to the file of the learned CIT(A) and direct him to adjudicate the matters afresh on merit and in accordance with law and pass speaking orders after providing reasonable opportunity of being heard to the assessees. It is also directed that the assessees should not seek adjournment without there being a justified reason. Accordingly, the grounds raised by the assessees in all these appeals are allowed for statistical purposes.
Insofar as non–appearance of the assessees before the authorities below are concerned, the primary onus lies on the assessee to co-operate in the proceedings before the learned CIT(A) and the Assessing Officer. In case, the assessee does not do so, he deserves to be penalized and hence we feel that the penalty has to be imposed upon the assessee and the same should be commensurate to the default committed by him. As a result of non- compliance and procedural delays, we deem it fit and appropriate to impose a cost upon the assessees for an amount of ` 5,000 (Rupees Five Thousand Only) for each appeal aggregating to ` 20,000 (Rupees Twenty Thousand Only) payable to the Maharashtra State Legal Services Authority and adduce evidence of payment before the learned CIT(A). This cost underscores the importance of adhering to the procedural requirements and timely compliance during assessment and appellate proceedings.
4 M.G. Bhangdiya And Hitbhav Engineers JV K.M. Bhangdiya (JV)
In the result, appeals for 2008–09, 2009–10, 2010–11 and 2011–12 filed by the assessee are allowed for statistical purposes subject to the terms indicated above. Order pronounced in the open Court on 23/01/2025