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Facts
The assessee's appeal was directed against an order upholding a penalty levied under section 270A. The assessment order, passed under section 144, included an addition of Rs. 90,33,525/-. The assessee claimed to have no taxable income and filed no return, but the assessing officer treated long-term capital gain as short-term gain without allowing cost of acquisition.
Held
The Tribunal noted that the assessment order, penalty proceeding, and the CIT(A) order were all completed ex-parte. Since there was no finding on merit by the lower authorities and the assessee appeared interested in pursuing the case, the Tribunal restored the matter to the assessing officer for a fresh decision after providing the assessee a reasonable opportunity.
Key Issues
Whether the penalty levied under section 270A is valid when the entire proceedings were ex-parte and there was no finding on merit by the lower authorities.
Sections Cited
270A, 144, 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER:
This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 26.08.2025 for A.Y. 2017-18, wherein penalty levied under section 270A was upheld.
Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that assessment was completed under section 144 by making addition of Rs. 90,33,525/-. The assessing officer while passing the assessment order initiated penalty for under reporting of income. The assessment a well A penalty proceeding was also completed in ex-parte proceedings. The assessee became aware of assessment order and penalty only on 08.05.2025 when demand notice was served upon the assessee. In fact, the assessee has neither under reported the income nor any occasion to misreporting of income. During the relevant financial year, the assessee sold immovable and earned long term capital gain.
The assessee has no taxable income, thus, no return of income was filed. The assessing officer made addition by treating the long term gain as short term gain and not allowed the cost of acquisition of flat. The appeal in quantum assessment is still pending before Tribunal in ITA No. 6765/Del/2025. The proceedings were completed ex-parte, therefore, the assessee may be given one more opportunity to contest the case on merit.
On the other hand, the learned Senior Departmental Representative (ld.
Sr. DR) for the Revenue submits that assessee is habitual defaulter in not making timely compliance. The lower authorities have given more than reasonable opportunity during assessment as well as while levying penalty and the penalty order may be confirmed.
I have considered rival submissions of both the parties and perused the record carefully. I find that all the proceedings that is assessment order, penalty proceeding and ld. CIT(A) is completed in ex-parte proceedings.
I find that assessee is seems to be interested in pursuing her case on merit. As there is no finding on merit by lower authorities, therefore, I deem it appropriate to restore the matter back to the file of assessing officer to decide it afresh. Needless to direct that before passing the assessing officer shall provide reasonable opportunity assesse is also directed to be more vigilant in future and making timely compliance.
In the result, appeal of the assessee is allowed for statistical purpose.