MADURAI TUTICORIN EXPRESSWAYS LIMITED,HYDERABAD vs. ACIT., CIRCLE - 5(1), HYDERABAD

PER LALIET KUMAR, J.M: This appeal is filed by the assessee feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19/09/2024 for the AY 2017-18. 2. The grounds raised by the assessee read as under: "1. The order of the Ld. CIT(A) passed U/s. 250 of the Act dated 19/09/2024 is erroneous both on facts and in law to the extent the order is prejudice to the interests of the appellant.

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Madurai Tuticorin Expressways limited
2. The Ld. CIT(A) erred in dismissing the appeal.
3. The Ld. CIT(A) ought to have cancelled the penalty order passed on 27/ 01/ 2022 when the quantum appeal was still pending finalization by the First Appellate Authority.
4. The Ld. CIT(A) ought to have appreciated that the penalty order passed U/s. 270A of the Act dated 27/ 01/ 2022 is in violation of the provisions of section 275 of the Act.
5. The Ld. CIT(A) ought to have appreciated the fact that penalty order was passed U/s. 270A of the Act without providing reasonable opportunity of being heard to the assessee.
6. The Ld. CIT(A) ought to have appreciated the fact that there is no willful attempt by the assessee to evade any tax and that there is no under reporting of any income.
7. Without prejudice to other grounds, the Ld. CIT(A) ought to have appreciated that there is no under reporting of any income and that the impugned reduction of loss in the assessment is on account of disallowance made U/s.
2(24)(x) r.w.s 36(1)(va) of the Act in respect of claim made towards payment of provident fund.
8. Appellant may, add or alter or amend or modify or substitute or delete and / or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal."
3. The contention of the assessee in this case is that the return of income filed by the assessee was processed U/s. 143(1) of the Act thereby quantifying the loss of Rs. 12,72,76,481/-.
Subsequently, the case was selected for scrutiny under CASS and the order U/s 143(3) of the Act was passed in the case of the assessee by the Ld. AO on 30/12/2019. In the said assessment order, the Ld. AO has also sought to impose the penalty U/s.
270A of the Act for violation of the provisions of section 270A of the Act. Accordingly, the Ld. AO, after issuing a show cause

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Madurai Tuticorin Expressways limited notice to the assessee on 30/12/2019, has decided the issue of imposing penalty of Rs. 1,29,238/- on the assessee. Feeling aggrieved, the assessee filed an appeal before the Ld. CIT(A).
4. On appeal, the Ld. CIT(A) has decided the issue against the assessee by holding as under:
"I have perused facts of the case, penalty order of the AO, submission of the appellant, and the documents available on record. On perusal of the record, it is seen that the only addition made is in respect of penalty levied of Rs. 1,29,238/- as U/ s.
270A of the Act.
On perusal of the submissions and the documents filed during appellate proceedings, it is observed that the appellant Madurai
Tuticorin Expressways Limited is engaged in the business of constructing Highways, Bridges, Tolls and Expressways. The contention of appellant is that the AO has passed penalty order
U/ s 270A without giving proper opport unity of being heard and without appreciating the fact. Relevant portion of section 270A is reproduced as under:
270A. (1) The Assessing Officer or [the Joint Commissioner
(Appeals) or] the Commissioner (Appeals) or the Principal
Commissioner or Commissioner may, during the course of any proceedings under this Act, direct that any person who has under-reported his income shall be liable to pay a penalty in addition to tax, if any, on the under-reported income.
(2) A person shall be considered to have under-reported his income, if—
(a) the income assessed is greater than the income determined in the return processed under clause (a) of sub-section (1) of section 143;
(g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income.
In the case of the appellant, the income assessed is greater than the income determined U/ s. 143(1)(a) and the income assessed has the effect of reducing the loss. This means that the case of the appellant is squarely covered by the provisions

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Madurai Tuticorin Expressways limited of section 270A. As regards the contention of the appellant is that proper opportunity was not afforded before levying the penalty, it is evident from the penalty order itself that sufficient number of opportunities have been given but the appellant choose not to furnish any reply / information.
In view of the above discussion, the submission of the appellant are not acceptable and the penalty of Rs. 1,29,238/- imposed
U/s. 270A is confirmed and these grounds of appeal are dismissed."
5. The submission of the Ld. AR is that before the Ld. CIT(A), the quantum appeal of the assessee is pending for adjudication and therefore, it would be better if the present appeal is remitted back to the file of the Ld. CIT(A) to decide the issue afresh along with the quantum appeal. Further, it was submitted that the Ld.
CIT(A) has wrongly applied the provisions of section 143(1)(a) of the Act while confirming the penalty imposed by the Ld. AO.
Therefore, the Ld. AR pleaded that in the interest of justice the matter may be remitted back to the file of the Ld. CIT(A) to decide the issue afresh.
6. Per contra, the Ld. DR has objected to the submissions of the Ld. AR and submitted that the matter may not be set-aside to the file of the Ld. CIT(A).
7. We have heard the rival contentions and perused the material available on record. We find merit in the contention of 5
Madurai Tuticarin Expressways limited the Ld. AR that when the substantive appeal is pending before the Ld. CIT(A), it would be in the interest of justice if the matter is remitted back to the file of the Ld. CIT(A). Accordingly, we hereby remit the matter back to the file of the Ld. CIT(A) with a direction to decide the issue afresh after affording a reasonable opportunity of being heard to the assessee in accordance with the principles of natural justice.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 07th January, 2025. (MADHUSUDAN SAWDIA)
ACCOUNTANT MEMBER (LALIET KUMAR)
JUDICIAL MEMBER

Hyderabad, dated 07/01/2025
OKK/sps

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Madurai Tuticorin Expressways limited
Copy to:
S.No Addresses
1
Madurai Tuticorin Expressways Limited, C/o. P. Murali & Co., Chartered
Accountants, 6-3-655/2/3, Somajiguda, Hyderabad.
2
ACIT, Circle-5(1), Hyderabad.
3
Pr.CIT, Hyderabad.
4
DR, ITAT Hyderabad Benches
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Guard File

By Order