UDAY ANANT KAMAT,PANAJI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI
Facts
The assessee filed appeals against penalty orders for four assessment years (2009-10 to 2012-13), which were levied following a search action and re-assessment under Section 153C. The National Faceless Appeal Centre (NFAC) dismissed the assessee's appeals ex-parte and confirmed the penalty, primarily based on the quantum addition being upheld by the Tribunal, without independent reasoning.
Held
The ITAT held that penalty proceedings are distinct from assessment proceedings and the NFAC erred by not passing a speaking order with independent reasoning and appreciating the facts, as mandated by Section 250(6) read with Section 251(1)(b) of the Income Tax Act. Citing judicial precedents, the ITAT found the NFAC's order irregular and set it aside, remitting the matter for fresh adjudication in accordance with law.
Key Issues
Whether the National Faceless Appeal Centre (NFAC) was justified in dismissing appeals ex-parte and confirming penalties without passing a speaking order based on independent reasoning, and if penalty proceedings are distinct from assessment proceedings.
Sections Cited
Section 253(1), Section 250, Section 250(6), Section 271AAA, Section 217(1)(c), Section 153C, Section 143(3), Section 271AA, Section 251(1)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PANAJI BENCH, GOA
Before: HON’BLE SHRI PAVAN KUMAR GADALE & SHRI G. D. PADMAHSHALI
IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, GOA BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER Sr ITA No Assessment Year Appellant Respondent PAN 1 139/PAN/2024 2011-12
2 140/PAN/2024 2012-13 Asstt. Commissioner of Uday Anant Kamat Income Tax, ADQPK0025Q Circle-1(1), Panaji, Goa 3 223/PAN/2024 2009-10
4 224/PAN/2024 2010-11 Appearances Assessee by: Mr Nishant Thakkar [‘Ld. AR’] Revenue by: Mr Capt. Pradeep Arya [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 26/06/2025 घोषणा की तारीख / Date of Pronouncement : 30/06/2025 ORDER PER G. D. PADMAHSHALI; This bunch of assessee’s appeals filed u/s 253(1) of
the Income-tax Act, 1961 [‘the Act’] challenges
respective orders passed by the National Faceless
Appeal Centre, Delhi [‘Ld. NFAC’] u/s 250 of the Act
involving four assessment years 2009-10 to 2012-13
[‘AY’] which stemmed respectively from separate
penalty orders passed u/s 271AAA/217(1)(c) of the
Act by Asstt. Commissioner of Income Tax, Circle-
1(1), Panaji [‘Ld. AO’]. ITAT-Panaji Page 1 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 2. The primary grievance in present appeals twirls around ex-parte dismissal of appeal in contravention of s/s (6) of 250 of the Act.
Since facts involved in this bunch of appeals and issue dealt therein are common & identical and since arising out of a common search, on rival party’s request these appeals for the sake of brevity & convenience are heard together for being disposed-off by this common & consolidated order.
In adjudicating these matters together, the first appeal listed at Sr No 1 viz; ITA No. 139/PAN/2024 is taken as lead case; resultantly our adjudication laid in succeeding paragraphs shall mutatis-mutandis apply to remaining appeals listed at Sr. No 2 to 4.
ITA No. 139/PAN/2024 5. As we note that, a search action on ‘M/s Kamat Construction Pvt. Ltd.’ was carried out on ITAT-Panaji Page 2 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 31/01/2012 wherein certain incriminating materials were found. On the basis of such materials re- assessment proceedings against the assessee was initiated and consequential assessment u/s 153C r.w.s. 143(3) of the Act was framed. Pursuant thereto a penalty proceedings u/s 271AAA of the Act in relation to addition made on account of ‘deemed dividend’ was initiated. The said penalty proceedings by order dt. 30/10/2017 ultimately culminated where a penalty @10% of undisclosed amount was levied.
Aggrieved by aforestated imposition of penalty, the assessee filed an appeal before Ld. NFAC on 28/11/2017, which came to be dismissed ex-parte. Aggrieved thereby the assessee came in present appeal on as many as nine grounds, which since inconsonance with rule 8 of ITAT-Rules-1963, hence reproduction thereof in verbatim is dispensed with.
ITAT-Panaji Page 3 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 7. Without going into legal & meritorious grounds of appeal, we have heard rival party’s common submissions on the ground concerning (ground number 8) not passing a speaking order by the Ld. NFAC and subject to rule 18 (supra) perused material placed on record and considered facts in the light of settled position of law, which are forewarned to the parties for their rebuttal.
We note that, by the impugned order the Ld. NFAC confirmed the penalty levied u/s 271AA of the Act on a solitary premise that, the quantum addition made while framing the assessment u/s 153C r.w.s. 143(3) of the Act was upheld & confirmed by the Ld. Co-ordinate bench of the Tribunal. While coming to such conclusion and decision, the Ld. NFAC did neither appreciate the facts of the case independently nor could lay reasoning in support such conclusion.
ITAT-Panaji Page 4 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 9. No doubt the penalty proceeding derive its genesis from the assessment proceedings, however the proceedings for the levy of a penalty are independent and thus they are altogether distinct & separate from assessment proceedings. There is much less identity & connectivity between assessment proceedings and penalty proceedings. The latter are self-determining proceedings, that may, in some cases, follow as a consequence of the assessment proceedings. The tax authorities while dealing with later proceedings cannot base their decision merely by extrapolating their findings & observations from assessment order. Neither the imposition of penalty nor its approval in first appeal can solitarily be founded on Tribunal’s quantum adjudication, as the fate of quantum addition in second appeal per-se in our considered view could hardly form a basis for imposing a penalty or confirming such penalty in first appeal. ITAT-Panaji Page 5 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 10. Further we are also heedful to the restriction placed by clause (b) of sub-section (1) of section 251 of the Act which obligates the Ld. NFAC/CIT(A) to adjudicate the appeal against an order imposing a penalty, either to confirm or cancel such order or vary it so as either to enhance or to reduce the penalty without the right to remand the matter back except in the circumstance provided in law. While exercising the jurisdiction u/s 251(1)(b) r.w.s. 250(6) of the Act, the Ld. NFAC/CIT(A) is mandated to state point of determination, its decision thereon and clear reasons therefore. Any order to be regular & legal, it must comply with the former threefold dictates. An order passed in first appeal without adhering to former threefold stipulations de-facto, in our considered view sufferers from the compliance of s/s (6) of section 250 of the Act, therefore in limine deserves to be set-aside without going into merits. ITAT-Panaji Page 6 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 11. The Hon’ble Jurisdictional High Court in the case of ‘CIT Vs Premkumar Arjundas Luthra (HUF)’ [2016, 240 Taxman 133 (Bom)] had occasion to deal with the issue of non-speaking ex-parte order passed by the first appellate authority. Therein Hon’ble Lordships have held that; it shall be obligatory on the part of first appellate authority to deal with the merits in the manner provided in the statute even in case of non- prosecution of appeal by the assessee. While adjudicating the issue under appeal an obligation thus is on the first appellate authority to identify the issue assailed, draw a conclusion based on material with a clear reasons therefore. It is a trite law as laid down by Hon’ble Supreme Court in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ reported in 8 SCC 266 (SC), that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. ITAT-Panaji Page 7 of 8
Uday Anant Kamat Vs ACIT AY : 2009-10 to 2012-13 12. In the present case, since impugned adjudication
is merely based on Tribunal’s quantum appeal
adjudication and further since not dealt in a manner
provided in s/s (6) (supra) therefore rendered itself
irregular. For the reasons and in view of juridical
precedents (supra), we set-aside the impugned order
for its remittance to the file of Ld. NFAC with a
direction to deal therewith a fresh in accordance with
law and pass a speaking order in consonance with s/s
(6) of section 250 of the Act. The ground thus stands
allowed for statistical purposes.
These appeals in result stands partly allowed for statistical purpose in aforestated terms. In terms of rule 34 of ITAT Rules, 1963 the order pronounced in the open court on date mentioned hereinbefore.
-S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt: 30th June 2025. Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)/NFAC Concerned 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Goa 6. Guard File
By Order, Sr. Private Secretary / AR ITAT, Panaji. ITAT-Panaji Page 8 of 8
