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Facts
The assessee's penalty order for AY 2015-16 was passed by the Additional CIT under sections 271C, 272A(2)(k), and 272A(2)(g). The assessee appealed to the CIT(A), raising the legal issue that the penalty order was time-barred and also challenging the merits. However, the CIT(A) dismissed the appeal in-limine for non-prosecution without addressing these contentions.
Held
The Income Tax Appellate Tribunal (ITAT) found that the CIT(A) had dismissed the appeal solely due to non-prosecution, without deliberating on the merits or the crucial legal issue of limitation. The ITAT held that the CIT(A) has a duty to decide the appeal on merits, including the issue of limitation. Consequently, the ITAT remanded the matter back to the CIT(A) with directions to first adjudicate on the limitation aspect and then on the exigibility of penalties.
Key Issues
Whether the penalty order passed by the Additional CIT was barred by limitation under Section 275(1)(c); and whether the CIT(A) erred in dismissing the appeal in-limine for non-prosecution without adjudicating on merits or legal issues.
Sections Cited
Section 143(3), Section 271C, Section 272A(2)(k), Section 272A(2)(g), Section 275(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI MAHAVIR SINGH SHRI MAHAVIR SINGH, , , , VICE SHRI MAHAVIR SINGH & SHRI BRAJESH KUMAR SINGH, ACCOUNTANT SHRI BRAJESH KUMAR SINGH SHRI BRAJESH KUMAR SINGH
Per Mahavir Singh Per Mahavir Singh, Vice Per Mahavir Singh Per Mahavir Singh , Vice , Vice President , Vice President President : President
This appeal by the assessee is arising out of the order of learned Commissioner of Income-tax (Appeals), NFAC in appeal No.41/10528/2019-20 dated 21st March, 2024 for the assessment year 2015-16.
2. The assessment was framed by the Assessing Officer for the relevant assessment year 2015-16 under Section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). The penalty order under Section 271C, 272A(2)(k) and 272A(2)(g) of the Act was passed by Additional CIT, Range-75, New Delhi vide order dated 24th December, 2019.
3. At the outset, learned counsel for the assessee stated that there is a legal issue that the penalty order under Section 271C, 272A(2)(k) and 272A(2)(g) is barred by limitation. He also raised the issue that the CIT(A) has erred in dismissing the appeal in-limine for non-prosecution without going into the merits of the case and simplicitor for non-prosecution. For this, the assessee has raised the relevant grounds as under :-
“1. That, on facts and circumstances of the case, the order dated 24.12.2019 made by Addl. Commissioner of Income tax, Range-75, is barred by limitation having been passed after the expiry of time limit laid down u/s 275(1)(c) of the Income Tax Act, 1961; That, the date of initiation of penalty is to be reckoned from the date of making reference by the ITO Ward 75(2) (i.e. from 24.05.2018) to the prescribed authority;
That, on facts and circumstances of the case, the order passed by Ld. CIT(A) is bad both in the eyes of law and on the facts of the case.
2.1 That, on facts and circumstances of the case, Ld. CIT(A) erred in dismissing the appeal in limine for non-prosecution without going either into the merits of the case or discussing the various grounds of appeal filed by the appellant.
That, on facts and circumstances of the case, the order made by Addl. Commissioner of Income Tax, Range-75, is non- est; That, the manual order dated 24.12.2019 made without complying with the mandate of CBDT Circular No.19/2019 dated 14.08.2019 (Para 3) is not valid in law;”
Learned counsel for the assessee drew our attention to the assessee’s paper book consisting of 43 pages and, he particularly drew our attention to page 4 wherein the relevant chronology of events is given, the relevant portion of which reads as under :-
Factors In Mahesh Wood Case Case of the Assessee Assessment/Original Order 30.12.2011 17.04.2018 made on Whether penalty was initiated No Recommended under the assessment/original order? Date of making reference to 23.07.2012 24.05.2018 Addl CIT Date of issuance of SHOW 28.08.2012 06.06.2019 CAUSE NOTICE for levying penalty Penalty Order 26.02.2013 24.12.2019 Whether penalty order held Yes Case before Your Honour as barred by limitation?
Learned counsel for the assessee also took us through the order of learned CIT(A) and noticing the order of learned CIT(A), we find that the appeal is dismissed simplicitor for non-prosecution. The CIT(A) also noted that the Revenue has issued three notices for compliance on 08.02.2021, 13.03.2024 and 23.03.2024 but, there was no compliance. When these facts were confronted to the learned Senior DR, he could not controvert the same.
We have heard rival contentions and gone through the facts and circumstances of the case. After going through the facts and circumstances of the case, we notice that the order of learned CIT(A) is simplicitor for non- prosecution and there is no discussion on merits at all. As there is no adjudication by the learned CIT(A) on merits, we are left with no alternative but to remand the matter back to him. Learned CIT(A) is duty-bound to decide the issue on merits instead of passing order for non-prosecution simplicitor. Hence, we remand this appeal to the file of the learned CIT(A) with a direction that he will adjudicate first the issue of limitation and thereafter, he will also adjudicate the issue on merits, whether the assessee is exigible to penalties under Section 271C, 272A(2)(k) and 272A(2)(g) or not. In terms of the above, the matter is restored back to the file of the learned CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes. Above decision was pronounced in the open Court on 13th November, 2024.