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Facts
The assessee challenged a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year 2015-16. The penalty was imposed due to the disallowance of Rs. 52,05,828/- under "weight deduction" and foreign travel expenses. The assessee's appeal before the Ld. Commissioner was dismissed ex-parte due to non-compliance and failure to respond to notices.
Held
The Tribunal acknowledged the assessee's failure to comply despite multiple opportunities, stating that no leniency is deserved. However, to ensure proper adjudication of the issues due to lack of relevant submissions, the case was remanded to the Ld. Commissioner for a fresh decision on merits, providing the assessee a reasonable opportunity to present its case.
Key Issues
Whether the ex-parte order of penalty by the Ld. Commissioner was justified, considering the assessee's reasons for non-appearance and the need for a proper adjudication of the merits of the disallowance and penalty.
Sections Cited
271(1)(c), 35(2)(AB), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI GAGAN GOYAL
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 05.12.2023, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2015-16.
In the instant case, a penalty to the tune of Rs.16,41,620/- was levied u/s 271(1)(c) of the Act on account of disallowance of Rs.52,05,828/- under the head “weight deduction” u/s 35(2)(AB) and foreign travel expenses.
The Assessee, being aggrieved, challenged the levy of penalty, however, in spite of giving various opportunities by the Ld.
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Commissioner, the Assessee failed to respond to the notices and the grounds raised in the appeal except seeking the adjournments, therefore in the constrained circumstances the Ld. Commissioner decided the appeal of the Assessee by passing impugned order as ex- parte and dismissed the appeal of the Assessee by upholding the levy of penalty.
The Assessee, being aggrieved, is in appeal before us. The Assessee has submitted that due to finalising the accounts and audits, the Accounting Consultant of the Assessee sought adjournment, however, the Ld. Commissioner passed the order without appreciating the fact that the decision in quantum appeal was pending. The non- appearance before the Ld. Commissioner and seeking adjournment was bonafide and under the constrained circumstances, therefore the default cannot be attributable to the Assessee.
On the contrary, the Ld. D.R. refuted the claim of the assessee.
We have given thoughtful considerations to the peculiar facts and circumstances of the case and observed that in spite of granting various opportunities, the Assessee substantially made no compliance and therefore the Assessee does not deserve any leniency. However, considering the peculiar facts that in the absence of relevant submissions/documents, the issue involved in this case remained to be adjudicated in its right perspective and in proper manner. Hence, for the just decision of the case and for the ends of substantial justice, the case is remanded to the file of the Ld. Commissioner for decision afresh on merits, suffice to say by affording reasonable opportunity to the assessee to substantiate its claim.
We also direct the assessee to cooperate with the appellate proceedings and to file the relevant submissions/documents which would be essential and required by the Ld. Commissioner for proper
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adjudication of the case. In case of further default the assessee shall not be entitled for any leniency.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the open court on 31.07.2024.
Sd/- Sd/- (GAGAN GOYAL) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER
* Kishore, Sr. P.S.
Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench
//True Copy//
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.