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Facts
The assessee appealed against an ex-parte CIT(A) order confirming a penalty of Rs. 1,02,20,170 under section 271(1)(c) for bogus/excess business loss claims and interest/finance cost disallowance. The assessee attributed non-appearance to a communication gap, while the Revenue alleged non-cooperation despite opportunities.
Held
The tribunal acknowledged the possibility of a communication gap and, in the interest of justice, restored the matter to the CIT(A) for fresh adjudication. The assessee is required to present its case within three effective opportunities.
Key Issues
Validity of an ex-parte penalty under section 271(1)(c) and whether the assessee's non-appearance in lower appellate proceedings was justified by a communication gap.
Sections Cited
Section 271(1)(c) of the Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
Date of hearing 03.12.2024 Date of pronouncement 05.12.2024 ORDER
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2015-16, arises against the Commissioner of Income Tax (Appeals)-28 [in short, the “CIT(A)”], New Delhi’s order dated 16.08.2023 passed in case no. 26/10585/2014-15 involving proceedings under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that the learned CIT(A)’s impugned ex-parte lower appellate findings have affirmed the Assessing Officer’s action levying section 271(1)(c) penalty of Rs.1,02,20,170/- pertaining to quantum issue of bogus/excess claim of business loss(s) and disallowance of interest/finance cost involving varying sums.
Learned counsel submits that there was a communication gap at the assessee’s office auditor’s and arguing counsel’s level which formed the sole reason of it’s non-appearance in the lower appellate proceedings.
The Revenue on the other hand invites our attention to the CIT(A)’s ex-parte detailed discussion in para 3, pages 2 to 3 indicating the CIT(A) to have afforded three effective opportunities to the taxpayer. Mr. Yadav’s case accordingly is that the assessee has all along been non-cooperative in the lower appellate proceedings and therefore we ought to uphold the impugned penalty. 6. We have given our thoughtful consideration to the foregoing rival submissions and prima facie find merit in assessee’s
2 | P a g e submissions to the extent it explains the reasons of its non- appearance in the lower appellate proceedings as such communication gap at various levels could not be altogether ruled out. We therefore deem it appropriate in larger interest of justice to restore the assesee’s instant sole substantive grievance back to the CIT(A) for its afresh adjudication as per law. This indeed will be a subject to the rider that the assessee shall plead and prove its case within three effective opportunities at its own risk and responsibility in consequential proceedings.