M/S PUNJAB NATIONAL BANK,HAMIRPUR vs. JT.CIT(OSD), TDS CIRCLE, PANCHKULA

Separately, the matter was referred by the AO to the JCIT for initiating the penalty proceeding under section 271C of the Act for failure to deduct tax at source and thereafter, the penalty order was passed by the JCIT under section 271C r.w.s 274 dt. 02/07/2018 stating that the assessee has nothing to explain in support of its claim for non deduction of tax at source and therefore assessee was held liable for imposing of penalty under section 271C of the Act.

Both these orders were challenged before the Ld. CIT(A) and on perusal thereof, we find that the same has been passed ex-parte qua the assessee and against which, the assessee is in appeal before us.

During the course of hearing, the Ld. AR submitted that the order passed by the AO under section 201(1) r.w.s 201(1A) is barred by limitation as the same has been passed on 31/03/2018 beyond the prescribed limitation period and in support, reliance was placed on the Coordinate Bench decision in case of Reebok India Company C/O Price Water House Coopers Pvt. Ltd. Vs. The JCIT(OSD), New Dehi in ITA No. 319/Del/2021 dt. 15/11/2021. It was accordingly submitted that the order so passed by the AO deserves to be set aside at very threshold as the same is barred by limitation.

The Ld. DR is heard who has submitted that no such ground of appeal has been taken by the assessee before the lower authorities and in any case, there is no finding by the Ld. CIT(A) and therefore where the Bench so decide, he matter may be set aside to the file of the Ld. CIT(A) to decide the same.

After hearing both the parties and considering the fact that the assessee has not been provided proper opportunity and the order has been passed ex-parte by the ld CIT(A), we deem it appropriate that the assessee deserve an opportunity to represent its case before the ld CIT(A) and we also have the benefit of the findings of the ld CIT(A) and thus, the matter required to be set aside to the file of the Ld. CIT(A).

As far as the ground relating to limitation, no doubt, no such ground was specifically taken before the Ld. CIT(A). At the same time, the same being the legal ground, the same is hereby admitted and since we are setting aside the matter, this ground is also set aside to the file of the Ld. CIT(A) to decide the same after providing reasonable opportunity to the assessee.

In light of the above, the appeal in respect of levy of penalty under section 271C is also set aside to the file of the Ld. CIT(A) to decide the same afresh after providing reasonable opportunity to the assessee.

In the result, both the above appeals of the Assessee are set-aside to the file of the ld CIT(A) and the same are allowed for statistical purposes.