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Facts
An ex-parte assessment order was passed, leading to a penalty order. The Assessee appealed the penalty order with a delay, which was dismissed by the CIT(A) for latches. The assessment order itself was later set aside by the CIT(A) and remanded for de-novo assessment.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A). It held that since the assessment order was set aside, the consequential penalty order could not survive. The penalty order was quashed.
Key Issues
Whether the penalty order can survive when the original assessment order has been set aside and remanded? Whether delay in filing the appeal before CIT(A) should be condoned in such circumstances?
Sections Cited
144, 271AAC, 143(3)
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Income Tax Appellate Tribunal, DELHI
ORDER PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Assessee against the order of Ld.
Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 21/03/2025 for the Assessment Year 2018-19.
Brief facts of the case are that, an ex-parte assessment order came to be passed on 23/04/2024 u/s 144 of the Income Tax Act, 1961 ('Act' for short). Consequent to the additions made thereon, a penalty proceedings has been initiated against the Assessee and an order of the Act. Aggrieved by the order of penalty dated 18/01/2022, the Assessee preferred an Appeal before the Ld. CIT(A) with a delay of nearly 10 months in filing the First Appeal. The Ld. CIT(A) vide order dated 21/03/2025, dismissed the Appeal of the Assessee for delay in latches.
As against the order of the Ld. CIT(A) dated 21/03/2025, the Assessee preferred the present Appeal.
The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) committed error in not condoning the delay in filing the Appeal and also submitted that, the very assessment order dated 23/04/2024 has been set aside by the Ld. CIT(A) in the quantum Appeal, therefore, the order of the penalty thereupon cannot survive. Thus, sought for allowing the Appeal.
Per contra, the Ld. Department's Representative relying on the order of the Lower Authorities sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. The Ld. CIT(A) while dismissing the Appeal has not condoned the delay in filing the Appeal. It was the case of the Assessee that the Assessee has sufficient cause to condone the delay. Apart from the same, it is a matter of record that the assessment order has been set been remanded to the file of the A.O. for framing de-novo assessment.
Considering the above facts and circumstances, we condoned the delay in filing the Appeal before the Ld. CIT(A) and observe that as the order of assessment itself has been set aside, the consequential penalty order cannot survive. It is for the A.O. to initiate fresh penalty proceedings in accordance with law if A.O. frames assessment by making addition/s during the second round of assessment. Accordingly, the order of penalty dated 18/01/2022 which has been sustained by the Ld. CIT(A) vide order impugned is hereby quashed.
In the result, Appeal of the Assessee is allowed.