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Facts
The assessee filed an appeal against the order of the CIT(A) regarding a penalty initiated by the AO. The original assessment order under section 144 of the Income Tax Act, 1961, was passed due to non-compliance with notices. A significant addition was made to the total income, which the assessee did not challenge before the CIT(A).
Held
The Tribunal noted that the assessee had only challenged the initiation of penalty and not the addition made in the assessment order. Since neither party appeared, the appeal was heard ex-parte based on the DR's submissions. In the interest of justice, the Tribunal remanded the case back to the Assessing Officer.
Key Issues
Whether the appeal challenging the penalty initiation is maintainable when the underlying addition has not been challenged? Whether the case should be remanded for re-examination on merits?
Sections Cited
250, 143(2), 142(1), 144, 270A, 272A(1)(d), 271B, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Sanjay Awasthi
Assessment Year: 2017-18 Om Prakash…………………….. ………...…..…………………....Appellant G. B. Road, Murarpur, Gaya – 823001. [PAN: AOCPP7508Q] vs. DC/AC, Circle-1, Gaya………………….............................…..…..... Respondent Appearances by: None appeared on behalf of the appellant. Shri Ashwani Kr. Singal, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 09, 2025 Date of pronouncing the order : January 14, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 06.05.2022 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).
At the outset, the Registry has informed that there is a delay of 215 days in filing the present appeal. The assessee filed an application for condonation of delay stating reasons for such delay. After considering the application, we find reasonable cause which was beyond the control of the assessee and the delay was not intentional.. We, therefore, condone the delay in filing the appeal and adjudicate the appeal on merits of the case.
Brief facts of the case are that the assessee is engaged in retail businesses and service sector and filed return of income on 31.03.2018 for the assessment year 2017-18 by declaring a total income of Assessment Year: 2017-18 Om Prakash rs.15,59,850/-. The case of the assessee was selected under CASS for complete scrutiny for the reason that the large turnover shown in the ITR but audit report (3CD form) was not filed. Accordingly, notices u/s 143(2) and 142(1) of the Act were issued, however, the assessee did not make any compliance in response to the notices. Accordingly, the Assessing Officer passed an order u/s 144 of the Act by making an addition of Rs.1,05,24,570/- which is 8% of the gross turnover of the assessee.
Dissatisfied with the above order, the assessee went in appeal before the ld. CIT(A) raising the following grounds of appeal:
“1. The learned A.O has not considered negligence as a matter of offence. 2. The learned A.O has not considered audit report as furnished by assessee. 3. Thus the penalty as initiated by the A.O u/s 270A, 272A(1)(d) and 271B is not justifiable and sustainable. 4. For that any other ground will be urged at the time of the hearing of the case.” 4.1 However, the ld. CIT(A) after discussing the issued involved in the appeal passed an order stating in following manner:
7.4 The appellant has not challenged the addition made by the Assessing Officer in the assessment order u/s 143(3) dated 28.11.2019. The appellant only challenged the initiation of penalty in this appeal and the ground against penalty initiation u/s 270A, 272A(1)(d) and 271B is premature and does not require adjudication at this stage.
Aggrieved, the assessee filed the present appeal. Since neither the assessee nor its representative appeared before the Bench despite issuing repeated notices on various dates, therefore, we proceeded to hear this matter with the assistance of ld. DR. The ld. DR stated that the assessee did not challenge the addition made by the Assessing Officer in the assessment order passed u/s 143(3) of the Act on 28.11.2019. The assessee only challenged the initiation of penalty u/s Assessment Year: 2017-18 Om Prakash 270A, 272A(1)(d) and 271B of the Act in his grounds of appeal. He therefore stated that the ld. CIT(A) had no other alternative but to dismiss the appeal of the assessee.
6. We, after hearing the ld. DR and perusing the materials available on record, find that the assessee did not challenge the addition made by the Assessing Officer in the assessment order passed u/s 143(3) of the Act but only challenged the initiation of penalty u/s 270A, 272A(1)(d) and 271B of the Act. Without going into any technicalities, in the interest of justice and fair play, we deem it necessary to remand the whole issue to the file of the Assessing Officer with a direction to re- examine the case on merits after giving reasonable opportunity of being heard to the assessee to represent his case. We also direct the assessee to sincerely comply with the notices issued and duly participate in the remand proceedings to avoid any further delay.
In terms of the above, the appeal of the assessee is allowed for statistical purposes.
Kolkata, the 14th January, 2025.