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Facts
The assessee filed two appeals against ex-parte orders of the CIT(A) confirming penalties under Section 271(1)(c) for AY 2016-17 and Section 271AAB for AY 2017-18. The assessee contended inability to appear before lower authorities due to blood cancer treatment, submitting medical records and an affidavit. The Departmental Representative argued that since quantum additions were upheld by the Tribunal, the penalties should also stand.
Held
The Tribunal held that assessment and penalty proceedings are distinct and the upholding of quantum additions does not automatically mean penalties are leviable. Considering the assessee's medical condition and the ex-parte nature of previous proceedings, the appeals were restored to the Assessing Officer for fresh adjudication with directions to provide a reasonable opportunity of hearing to the assessee.
Key Issues
Whether penalties confirmed ex-parte by the CIT(A) were justified, considering the assessee's medical condition and the independent nature of penalty proceedings from assessment proceedings.
Sections Cited
271(1)(c), 271AAB
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Income Tax Appellate Tribunal, DELHI BENCH “E”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI NAVEEN CHANDRA
अपीलाथ� �ारा/ Appellant by : Shri Salil Kapoor, Advocate �ितवादी�ारा/Respondent by : Shri S.L. Verma Sr. DR सुनवाई क� ितिथ/ Date of hearing : 19/06/2024 घोषणा क� ितिथ/ Date of pronouncement : 19/06/2024 आदेश/ORDER PER VIKAS AWASTHY, JM: These two appeals by the assessee are directed against the orders of Commissioner of Income Tax (Appeals)-28, Delhi [in short ‘the CIT(A)’], for Assessment Year 2016-17 confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and for AY 2017-18 upholding levy of penalty u/s. 271AAB of the Act in an ex-parte proceedings. Both the impugned orders are of even date i.e. 18.07.2023.
Shri Salil Kapoor, appearing on behalf of the assessee submitted that the assessee could not appear before the Assessing Officer and the CIT(A) on account of medical exigency. The assessee is suffering from blood cancer and was under treatment when penalty proceedings were initiated against the assessee. The ld. Counsel pointed that the assessee has furnished an affidavit citing reasons for non appearance before the Lower Authorities. The said affidavit is accompanied by medical records of the assessee. He further, stated that the assessee has prima facie good case in his favour on merits, if these appeals are restored to the file of Assessing Officer, the assessee would make submissions on merits before the AO.
Per contra, Shri S.L. Verma representing the Department vehemently defending the impugned orders stated that quantum appeals of the assessee have been decided by the Tribunal upholding the additions, therefore, no useful purpose would be served for restoring these penalty appeals to the AO. Thus, he prayed for dismissing both the appeals of the assessee. 4. We have heard the submissions made by rival sides, these two appeals are against ex-parte orders passed by the First Appellate Authority confirming levy of penalty u/s. 271 (1)(c) of the Act in AY 2016-17 and u/s. 271 AAB of the Act in AY 2017-18, respectively. The ld. Counsel for the assesseee pointed that the assessee is a cancer patient and hence, could neither defend his case before the Assessing Officer nor before the CIT(A). The assessee has filed an affidavit alongwith medical treatment records to substantiate that assessee was undergoing treatment for blood cancer. The ld. DR has asserted that the Tribunal has upheld quantum additions arising out of assessment proceedings in the respective